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Fidelity struggles to pay miners

26 May, 2020 - 00:05 0 Views
Fidelity struggles to pay miners

The Herald

Golden Sibanda and Ishemunyoro Chingwere

Fidelity Printers and Refiners has reportedly been failing to pay small scale gold miners on time as Covid-19 restrictions have limited flights into the country, thereby affecting smooth importation of hard currency cash needed to pay the clients.

Covid-19, a viral disease first detected in Wuhan, China, has killed hundreds of thousands and infected millions across the world, forcing Governments globally to enforce lockdowns to contain its spread, which have grounded airline operations and shuttered most economic sectors.

It was not immediately clear how much was owed to the small gold miners, but industry sources said the miners were owed significant amounts from at least two weeks of unpaid deliveries.

Gold miners get paid 50 percent of their sales proceeds in foreign currency, while the balance is paid in local currency, allowing the central bank to retain some hard currency needed for critical national obligations like fuel imports.

Small scale gold miners, some of whom are artisanal miners and do not have nostro or ordinary bank accounts, get paid in cash to entice them not to smuggle out the bullion at the expense of the country.

Although they are small and use rudimentary and less sophisticated mining techniques and equipment, the miners account for 60 percent of Zimbabwe’s gold output.

Zimbabwe’s gold output dipped to 1 464,3 kilogrammes in April compared to 2 126,35 kg a year earlier.

During the period under review, small-scale miners produced 728,9 kilogrammes, while large-scale miners produced 735,4 kgs

Zimbabwe targets 35 tonnes of production this year against 27 tonnes last year, when earnings dropped to US$946 million.

Gold is Zimbabwe’s single largest foreign currency earner, accounting for nearly 30 percent of total annual foreign currency earnings (US$1,3 billion in 2018) and together with platinum generate over 60 mineral exports.

Zimbabwe Miners Federation ZMF chief executive Wellington Takavarasha, said in a letter to members that following a meeting with FPR, they were told limited inbound flights had affected importation of cash to pay miners.

“Pursuant to our meeting with FPF today (Friday last week), kindly be advised that FPR relies mostly on Foreign Exchange brought in by air transport.

“Due to the Covid-19 pandemic, there has been a limited number of flights into the country and this has adversely affected their operations,” Mr Takavarasha said.

Mr Takavarasha pleaded with miners to bear with FPR adding the Reserve Bank of Zimbabwe unit was making frantic efforts to make sure all payments for gold deliveries were paid.

While no comment could be obtained from FPR or RBZ Governor, Dr John Mangudya, who was not picking up his phone yesterday, Gold Producers Association Chairman Thomas Gono, also confirmed delays in payments but would not share further details.

Under the USD$12 billion 2023 milestone, which government is pushing, the yellow metal is expected to generate more revenue than all other minerals. It is expected to account for at least USD$4 billion in annual exports.

The Government is pinning hopes on mining and farming to provide quick start to economic turnaround after years of decline.

The two sectors have also become the largest employers, with many people plying their trades at small scale basis.

The state has provided support to the sectors among them small loans and equipment to boost production.

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