Platinum upstages gold

RBZ Governor John Mangudya

Platinum has maintained its foothold as the cornerstone of the mining sector as it was the largest foreign currency generator in 2020 on the back of stability in the sub-sector, Business Times can report.

According to official data obtained from the Reserve Bank of Zimbabwe (RBZ) exports receipts for platinum hit US$1.8bn while gold raked in US$994.7m.

In fact, gold has slid to third position in terms of foreign currency generation owing to rampant smuggling in the sub-sector.

Diaspora remittances took the second spot after reaching US$1bn.

“Platinum export receipts reached US$1.77bn in 2020 while gold export receipts fell to the second in the mining sector and third overall as far as forex generation is concerned,” RBZ governor, John Mangudya said.

Gold Miners Association of Zimbabwe chief executive Irvine Chinyenze said gold did not perform well due to a myriad of challenges.

“It’s not surprising that gold has lost its pole position as the highest foreign currency generator due to delay in payments, uncompetitive prices and rainy season towards the end of the year.

“However, the  first two challenges have created a conducive environment for smuggling  or looking for alternative markets  as gold miners need capital to continue producing and ensure the production cycle is  not disrupted,” Chinyenze told Business Times this week.

Gold deliveries went down 31% to reach 19.05 tonnes from 27.66 tonnes in 2020 due to subdued performance from the small scale miners.

Mangudya pointed out that side marketing of the yellow metal was also a major reason for the fall in deliveries.

The RBZ governor said the law enforcement agents would beef up security to curb smuggling as efforts to increase gold deliveries to Fidelity Printers and Refiners (FPR) gather momentum.

According to Mangudya, total foreign currency receipts for the period between January and December 2020 amounted to US$6.3bn compared to US$5.5bn received in prior year, representing a 14.9% increase in foreign currency supply.

Cumulative export shipments, including Tourism and Cross Border Road Freight went up 0.3% to US$4.7bn as at December 31 2020, compared to US$4.6bn declared during the same period in 2019. – Business Times