The Reserve Bank of Zimbabwe (RBZ) has applauded the gold mining sector for its strong performance this year as the country gears to breach 30 tonnes output by year-end, a record achievement since attainment of Independence.
The sector has contributed significantly to the economy and had clocked the 20 tonnes gold output by July this year.
Last year, gold output closed the year at 24 tonnes. The highest gold output the country had ever achieved so far was 27,1 tonnes in 1999.
Speaking during a Fidelity Printers and Refiners’ organised regional gold mining conference in Gwanda last week, RBZ principal analyst, Mr Dishoni Limbikani said the gold sector has recently become a critical economic player and a source of the scarce foreign currency.
“The production and growth of the economy is anchored on production and the gold sector provides us with this key contribution. We have already indicated that 40 percent of the foreign currency in the mining sector is coming from gold and that’s a key contribution,” said Mr Limbikani.
He said earnings from the gold sector have helped sustain economic activity in the country, thereby allowing forex allocation to support critical imports such as fuel, drugs and equipment for hospitals, power imports as well as key raw materials for the manufacturing sector.
Active infrastructure development in Gwanda town and surrounding areas, for instance, was also a direct result of increased gold production.
The robust growth in gold output has been attributed to the liberalisation of the sector plus increased Government support, particularly to small scale miners under the gold fund initiative, which has been increased from $20 million at its inception in 2016 to $150 million this year.
Small scale miners contributed up to 60 percent of total production.
Mr Limbikani hailed the small scale miners, whom he described as champions of production in the gold sector.
“The small scale sector is important because we have seen in last two to three years their contribution going up to a level of above 60 percent. What it means is that not only are we empowering our local people but they are contributing to the economy in a big way and as the RBZ we recognise that,” he said.
It was on this basis that the RBZ introduced the $150 million gold fund initiative to assist miners, both small and large, to scale up production by giving them loans to procure critical mining equipment.
“Government, through Fidelity Printers, the sole gold buying unit in the country, has also increased its outreach to miners and decentralised buying centres in addition to relaxing gold selling terms and easy payment of miners for their produce. The measures also include a 10 percent export incentive scheme over and above their cash payment at banks.
“We have already done over 20 tonnes by end of July and we think by end of the year we will have done 30 tonnes, which will be a record output since 1980,” said Mr Limbikani.
“The importance of this sector thus lies in its national contribution in supporting other sectors of the economy and ensuring liquidity in the economy.”
He, however, expressed concern over continued mineral leakages and illicit gold deals. In that regard, Mr Limbikani said RBZ was part of a task force involving security details and experts working to stem the leaks. The measures also include gold mobilisation meetings in mining districts and the push to formalise operations.
The task force has since increased its presence across the country for purposes of monitoring and surveillance to reduce smuggling.
During the deliberations, Fidelity took the opportunity to explain its operations, including the available incentives for miners who formally deliver their gold through formal channels. The meeting also saw miners from the province expressing their concerns over perceived bottlenecks in accessing the loans and selling their gold.
Some demanded 100 percent payment in United States dollars instead of the gazetted 70 percent. Others suggested increased security when paying miners as well as more decentralisation of buying centres.