Zimbabwe Central Bank expresses wary of gold smuggling

Dr John Panonetsa Mangudya

RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya has expressed concern over rampant smuggling of gold, warning Zimbabwe could as a result miss its official 25 tonnes production target for the year by as much as 32%.

Mangudya told delegates at the Chamber of Mines, Mining Sector Survey 2020 launch on Wednesday that for the first nine months of the year, gold production was at 12,8 tonnes, earning the country US$710 million. This is against US$795 million from 18 tonnes output during the first nine months of 2019.

Chamber of Mines projects 2020 gold output to reach 25 tonnes and 33 tonnes next year.

“We need to make sure that there is compliance. There are some sectors where compliance is low,” Mangudya said.

He said he was looking at these numbers in the Mining Survey report and deducing this year the gold that has come through the formal channel is lower than last year. Mangudya said this time last year 18 tonnes had been received compared to this year’s 12,8 tonnes by the end of September.

“Despite the price increase of 26% year-onyear, gold is at 12,8 tonnes with an average price of US$5 000 per kg; this gives us US$710 million versus US$795 million which we received in the first nine months of 2019.”

He said although gold had gone down, other mining products such as platinum had pushed the sector up.

He said the 25 tonnes output was achievable this year, but not all the gold was going through the formal channels.

“I am just saying the 12,8 tonnes by the end of September 2020 might leave us at 17 to 18 tonnes by the end of year due to non-compliance.”

The 17 to 18 tonnes would be 32% less than the projected figure.

Mangudya said the US$12 billion mining economy by 2023 was achievable if the five pillar issues namely, policy consistency, capital raising, exploration, compliance and availability of utilities were ironed out.

Poor deliveries to Fidelity Printers and Refiners were previously blamed on late payment and low retention levels forcing the central bank to review forex retention threshold to 70% from 55% for primary producers.

The apex bank has given small-scale gold producers 100% foreign currency retention to plug leakages and force them to sell to the formal markets.

Market watchers also blamed poor gold deliveries on inadequate inputs as imports were slowed by Covid-19 restrictions.

Most mining inputs are imported.

During the first nine months of the year cumulative foreign currency receipts were US$4,8 billion up from US$4,2 billion in the same period last year.

Source – the independent