Zimbabwe News and Internet Radio

Zimbabwe relaxes gold buying requirements

By Ndakaziva Majaka

HARARE – Zimbabwe’s sole gold buyer, Fidelity Printers and Refiners (Fidelity), has reduced its minimum acceptance threshold for gold from licensed small-scale dealers from 10 to five grammes as the country moves to increase gold production, sources have said.

Fidelity Printers and Refiners
Fidelity Printers and Refiners

According to information gathered from Fidelity, the latest measure was aimed at driving volumes and accommodate small-scale dealers.

The southern African country is angling for a return to the London Bullion Market Association (LBMA) and has issued a directive that all its gold producers sell the precious metal through Fidelity, a unit of the central bank.

“Most dealers buy gold using SG — a high scale of measurement — when they buy gold, however, since quantities from artisanal miners are usually very small, they end up using the straight weigh to accommodate these quantities.

“As Fidelity we have also adopted this method, to accommodate as much gold as we can, no matter how little it is,” a Fidelity employee said.

The source said the Reserve Bank subsidiary was also crafting other methods to buy gold from small-scale miners — regardless of quantity.

“As you may know, the country is now ready to re-join the LBMA as we have been producing more than 10 tonnes of gold annually in the past two years, but for us to maintain this we need to plug illegal exports by making Fidelity attractive,” said the source.

Appolonia Munzverengwi, Zimbabwe Miners Federation president, said the move by Fidelity was going to see a surge in gold volumes as many miners would remit to the RBZ subsidiary.

“The reduction of thresholds for gold remitted to Fidelity means small-scale miners will remit all the gold that they mine.

“In the past, they were reverting to selling to other buyers who might have circumvented the official channels,” Munzverengwi said.

The country has for the past six years been struggling to gain re-entry into the elite group of gold producers in the world after it was disqualified from LBMA in 2008 when production dropped to an all-time low of three tonnes — a figure far below the mandatory annual production of 10 tonnes required by the association.

Finance minister, Patrick Chinamasa, recently said that Zimbabwe has been working hard to increase production in the mining sector.

The LBMA is an international trade association, representing the London market for gold and silver bullion which has a global client base, including the majority of the gold-holding central banks, private sector investors, mining companies, producers, refiners and fabricators.

The country’s bullion production took a dive from almost 11 tonnes in 2006 to three tonnes in 2008.

Gold deliveries were 22 percent up in the first quarter of the year to 3 536kg from the same period in 2014 after small-scale miners saw their output more than doubling, statistics from Fidelity and Chamber of Mines show.

Small-scale miners saw their deliveries firming 111 percent to 1 161kg from 550kg in 2014. Daily News