‘Fidelity monopoly must go’

03 Jun, 2019 - 00:06 0 Views
‘Fidelity monopoly must go’ Henrietta Rushwaya

The Herald

Golden Sibanda recently in Victoria Falls
Small-scale gold producers have implored Government to end the monopoly of Fidelity Printers and Refiners, as Zimbabwe’s sole authorised gold buyer to improve bullion deliveries from the sector amid fears of rampant leakages.

This comes as deliveries to Fidelity Printers and Refiners dropped 10 percent in the first quarter of 2019 to 6,5 tonnes from 7,7 tonnes in the same period last year due to suspected gold leakages and smuggling.

A slowdown in performance of the gold mining sector, especially small-scale miners who accounted for 60 percent of the 35 tonnes haul achieved last year, is a cause for concern for Zimbabwe, which relies on bullion for foreign exchange.

Tobacco and other minerals also play a key role in generating foreign currency for the country.

Government has set a target of 40 tonnes of gold production this year, which would break the new record recorded last year.

Prior to that, the gold production record stood at 27 tonnes, achieved in 1999.

The small and artisanal gold miners said the monopoly enjoyed by Fidelity Printers and Refiners allowed it to dictate everything, including foreign currency surrender thresholds for bullion deliveries to the Reserve Bank of Zimbabwe unit.

Zimbabwe Artisanal and Small-Scale Miners Association president Henrietta Rushwaya told a Chamber of Mines conference in Victoria Falls on Thursday that small-scale gold miners were not happy with the 55 percent forex retention threshold they were getting from Fidelity Printers.

Government increased the gold retention threshold from 35 to 55 percent last year and miners have since February been lobbying further for a review of the threshold to between 75 and 90 percent.

The conference, held from  May 29 to June 1, 2019, ran under the theme “Realising Vision 2030 Through Resource Led Growth” and was officially opened by President Mnangagwa on Friday.

“The miners are still not happy with the Reserve Bank of Zimbabwe retention threshold, especially the 55 percent (forex) and 45 percent RTGS at the interbank rate of the day.

“And consequently, this has resulted in less deliveries at Fidelity Printers and Refiners and our recommendations as a sector are that the monopoly by Fidelity Printers needs to be reviewed and gold trading liberalised,” said Miss Rushwaya to a round of applause from the delegates.

Miss Rushwaya said if trade in gold was liberalised, the concept of willing-buyer-willing-seller would set in and deliveries through formal channels would improve, including to Fidelity Printers, provided the entity pays competitive prices.

She said due to small-scale gold producers’ reservations over Fidelity Printers and Refiners’ payment arrangement, most of the gold was lost to illegal middlemen who had no link with Fidelity Printers.

“At the end of the day the 100 tonnes we are craving for can be achieved before 2023 because 70 percent of gold could be getting leaked through illicit means due to poor payment by Fidelity Printers and Refiners,” she said.

Ms Rushwaya said the small-scale mining sub-sector, predominantly gold miners, employs over 500 000 people.

Government has set a target of 100 tonnes of gold by 2023, to drive the contribution of the sector towards realisation of Government’s vision of a middle-income status by 2030.

The chairman of the association of gold producers, Mr Thomas Gono, said at the conference that most gold mines that had closed before 2009, reopened immediately when Government liberalised the trade in gold between 2008 and 2009.

This comes as Government is working on a new mines and minerals governance regime, the Mines and Minerals Amendment Bill, which is expected to be passed by Parliament by end of June this year.

Mines and Mining Development Minister Winston Chitando challenged mining firms to come up with a strategy document for the sub-sector to drive its performance in the short, medium and long term.

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