Fidelity Printers and Refiners (FPR) general manager, Fradreck Kunaka, says he is still in charge at the country’s sole buyer, refiner and exporter of gold until the board “completes the process of the proposed unbundling of the company”.
Last month, the executive told Business Times he was leaving the company at the end of his contract saying “my curtain at Fidelity is coming down at the end of the month (March) after a good relationship with the company”.
Kunaka said the proposed unbundling of FPR, which is a unit of the Reserve Bank of Zimbabwe, was one of the reasons he was leaving the company.
He was ,however,singing a different tune last week.
“Developments at Fidelity will be communicated through the board at [the] appropriate time but as it stands, I’m still at the helm of the organisation,” Kunaka told Business Times.
Efforts to get a comment from the FPR board or Reserve Bank of Zimbabwe were fruitless at the time of going to print.
Well-placed sources at FPR said the delayed processes of unbundling of the company into two units-gold refining and printing and minting- gave Kunaka a new lease of life.
Under the planned unbundling of FPR, The RBZ will wholly own the printing and minting business but will retain 40% shareholding in the refining entity.
A 50% stake in the refining entity will be offered to the large-scale gold producers, while 3% and 7% will be offered to the major FPR gold buying agents and the small-scale producers through their representative bodies, respectively.
Well-placed sources at the central bank said the RBZ and Fidelity were consulting potential shareholders on Kunaka’s successor.
Kunaka has been at FPR for 20 years, six of which as general manager.
There was serious pressure, however, from other quarters for him to step aside following the decision by the government to unbundle FPR.
Some of the new shareholders were said to be wanting to bring in a new boss who they think can further their agenda.
The central bank is planning to partially liberalise the sector which has seen Fidelity being the country’s only buyer, refiner and exporter of gold for more than 40 years.
The monopoly, however, has been criticised by some who were seeking to invest in Zimbabwe’s gold sector.
RBZ is expecting that the gold producers’ compliance levels in the trading of gold will significantly increase due to the fact that gold dealers will be part of the decision-making process in gold trading.
The privatisation of FPR comes after lobbying from some players in the mining business.
However, Kunaka believes partial privatisation of Fidelity would not yield much results as there will be one entity with various players instead of various companies competing to buy gold.
FPR has been failing to pay miners for their gold delivered, resulting in them smuggling the yellow metal to alternative markets.
Zimbabwe has also been losing at least US$100m worth of gold every month due to smuggling, according to Home Affairs Minister, Kazembe Kazembe.
There have also been unfriendly policies, which have resulted in unsatisfactory deliveries to FPR.
Last year, about 19.1 tonnes of gold was delivered to FPR from a target of 28 tonnes due to smuggling.
Zimbabwe could have missed out on gains it could have harvested from record high gold prices of over US$63,000 per kilogramme for the bigger part of 2020.
As a result, some potential shareholders believe that Kunaka would not fit into new shareholders’ plans as some companies suffered during his stint at the helm of Fidelity Printers & Refiners. – Business Times