RBZ increases gold retention threshold

Oliver Kazunga, Senior Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) has increased the gold retention threshold to 70 percent in foreign currency for sale proceeds from the previous 55 percent in a move aimed at boosting production in the sector.

Under the new gold trading framework, it means gold producers will now receive 30 percent of their gold sale proceeds to Fidelity Printers and Refiners (FPR) in local currency.

FPR is the country’s sole gold buyer and operates under the purview of the Central Bank. In a statement, FPR general manager Mr Fradreck Kunaka said the new gold trading framework was with effect from yesterday.

“Gold producers shall be paid under a 70/30 payment arrangement scheme in terms of which 70 percent of the gold sale proceeds shall be paid into the producer’s Nostro account and the balance of 30 percent shall be paid in local currency at the ruling exchange rate into the producer’s ZW$ account,” he said.

Under the new framework, small-scale gold buying agents and artisanal producers shall be paid in cash at a flat price of US$45 per gramme of fine gold.

On the other hand, large gold buying agents must have a mining operation producing a minimum of 50 kilogrammes fine gold per month to qualify for FPR’s agency permit.

“Small-scale gold buying agents will have to enter into an agency agreement with FPR, which contract shall clearly spell out the terms and conditions under which the agents shall operate,” said Mr Kunaka.

He said FPR and the National Gold Monitoring Teams were enhancing surveillance to ensure that all gold is sold through the unit in line with the country’s regulations.

In a circular to media houses yesterday, the Zimbabwe Miners Federation (ZMF) chief executive officer Mr Wellington Takavarasha expressed excitement over the new retention framework. “Please accept our sincere gratitude to RBZ through FPR having increased the gold retention threshold from 55 percent/45 percent to 70 percent/ 30 percent (US$ and RTGS respectively),” he said.

In light of this, the ZMF boss said his organisation would make a press statement to the miners and stakeholders tomorrow, 27 May 2020 on these changes. Gold is one of the major foreign currency earners and the Government has prioritised initiatives aimed at boosting productivity.

Last year the country produced 33,2 tonnes of the yellow metal having set a target of 40 tonnes. The projected target was unattainable due to a number of factors that include intermittent power supplies.

The Government has maintained the 40 tonnes target for this year.

The mining industry has been exempt from the national lockdown as it is viewed as one of the critical economic sectors.

The sector like the rest of industry operating, has to adhere to the guidelines prescribed by the World Health Organisation (WHO) to mitigate the spread of the disease. — @okazunga.