Gold miners seek export status

Gold miners seek export status
Gold producers’ operations have been affected by difficulties in paying for imported equipment and chemicals.

Gold producers’ operations have been affected by difficulties in paying for imported equipment and chemicals.

ZIMBABWE’s large scale gold mining companies want government to allow them to directly export the precious metal, saying they are struggling to access foreign currency despite generating it.
Currently, the gold miners sell the precious metal locally to the government owned Fidelity Printers and Refiners (FPR), which then exports the mineral.
Gold producers’ operations have been affected by difficulties in paying for imported equipment and chemicals.
“Gold producers should be accorded exporter status, with their nostros funded to cover for the importation of critical requirements for production,” Pardon Chitsuro, an economist with Chamber of Mines of Zimbabwe (CoMZ), said.
“They sell their gold locally to FPR, which then exports the mineral. When they want foreign currency to import critical requirements, gold miners have to apply to the Reserve Bank of Zimbabwe for foreign currency.
“This means they have to wait in the queue until they are allocated foreign currency. So they (gold miners) want to be treated like any other minerals such as platinum or chrome just to mention a few. It’s not a weird request from gold miners.”
Chitsuro added: “According to the RBZ Exchange Control Regulations, the central bank retains 80 percent of mineral proceeds of other minerals, while 20 percent remains in nostro accounts, which makes it easy for them when they want to import inputs. This is not the case with gold miners.”
Last year, players in the gold industry failed to embark on new mine development projects due to lack of funding.
Capacity utilisation in the sector declined to about 74 percent in 2017 from 79 percent the previous year, mainly due to foreign payment delays coupled with high cost structures and aging equipment.
The request by gold miners comes at a time when large scale miners have lost their status as the cornerstone of the sector.
Last year, small scale and artisanal miners upstaged the large scale mining houses for the first time in almost 10 years. According to figures obtained from FPR, gold output stood at 24,8 tonnes during the year to December 2017 with the bulk of the yellow metal having been delivered by small miners.
Large scale mining companies produced and delivered 11,6 tonnes of gold between January and December 2017, while small-scale producers delivered 13,2 tonnes of gold during the period.
Government has given the small miners a helping hand. It availed a $40 million gold development facility through the central bank, after it recognised the potential that the small-scale miners have to increase output.
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