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    Gold shines in April as it racks in US$176,9 million

    By ETimes

    Zimbabwe has set a target of US$2 billion in earnings from gold this year due to higher gold prices and production from local companies.
     
    According to Zimbabwe Statistical Agency (ZIMSTATS), during the month of April 2022, the country exported 2 963 kilogrammes of semi manufactured gold valued at US$176,9 million, compared to 2 200 kilogrammes valued at US$135,5 million in March 2022
     
    Economist Dr Prosper Chitambara said, “The high prices are an incentive to produce and we will see increased production this year. They also discourage smuggling as a safer selling procedure is preferred by all.”
     
    He added that the country will also benefit from the improved prices as it means that there is more foreign currency which will cushion the country from global inflation and will also provide stability on the foreign exchange auction.
     
    On a quarterly basis, Fidelity Printers and Refiners (FPR), the country’s sole buyer and exporter of gold reported that export receipts increased 123 percent to US$463.1m in the first quarter of this year.
     
    The export proceeds of US$463.1m in the first quarter were better than the US$207.23m realised in the prior comparative period owing to firming commodity prices on the international market.
     
    In the three months to March, FPR received 7.70 tonnes of gold from miners from 4.02 tonnes delivered in the same period last year. Deliveries increased by 3.68 tonnes year on year representing a 91.54 percent increase.
     
    The primary producers delivered 2.75 tonnes of gold compared to 2.39 tonnes the same period last year. The variance in first quarter primary producer’s delivery was 15.06 percent.
     
    Small scale producers delivered 205.56 percent more gold in the first quarter in comparison with the same period last year. The small scale miners produced 4.95 tonnes of gold in the year to march, 3.33 tonnes more than the 1.65 tonnes produced in the same period last year.
     
    Traditionally, January and February are characterised by low deliveries as most operations are affected by the rains. However, the increased deliveries can be attributed to favourable policies introduced by regulatory officials last year that have reduced the rate of smuggling and encouraged deliveries.
     
    Last year the country’s small and large gold producers delivered a total of 29.63 tonnes of gold to FPR, a 55,5 percent increase from the 19.05 tonnes delivered in 2020.
     
    This came as large gold producers delivered 11.16 tonnes to FPR in 2021, while small-scale producers contributed 18.47 tonnes.
     
    Yearly gold deliveries bounced back year after year after a downward spiral since 2019, with gold deliveries hitting 33.4 tonnes in 2018, they fell to 27.66 tonnes the following year. Gold delivered in 2020 fell further to 19.05 tonnes a five-year low, before coming in at 29.6 tonnes last year.
     
    FPR has set a target of 40 tonnes this year if it maintains the current incentives and timeous payments for gold deliveries. However, the country is still off the pace needed to reach the 40 tonne production year, as deliveries are currently averaging 2.57 tonnes per month against the desired 3.33 tonnes per month needed to reach the target.
     
    Isaac Kwesu the President of the Chamber of Mines said, “The 40 tonne target is very achievable if the current policies are maintained and not tempered with because they have sought increased incentive to produce.”
     
    However, the Chamber of Mines has been engaging the government on some policies they feel still need to be addressed in order to increase production even further.
     
    “We have written to the government that the retention ratio should be increased to 80-85 percent in order to see the mines expand and be sustainable,” Kwesu added.
     
    The association is also fighting for constant power supply in order to lower cost of production as well as not to disrupt production. Multiplicity of taxes is also an issue the Chamber of Mines feels needs to be addressed by consolidating the taxes in order to achieve the ultimate goal of 100 tonnes per year.
     
    Gold prices have surged nearly 18 percent thus far in calendar year 2022 to around US$2,050 per ounce on the backdrop of the ongoing Russia – Ukraine conflict and there is more headroom over the next few months, believe analysts at globally renowned bank Goldman Sachs, who expect the prices to rise another 25 percent to US$2,500 an ounce by the year-end.
    Gold shines in April as it racks in US$176,9 million
      
    Zimbabwe has set a target of US$2 billion in earnings from gold this year due to higher gold prices and production from local companies.
     
    According to Zimbabwe Statistical Agency (ZIMSTATS), during the month of April 2022, the country exported 2 963 kilogrammes of semi manufactured gold valued at US$176,9 million, compared to 2 200 kilogrammes valued at US$135,5 million in March 2022
     
    Economist Dr Prosper Chitambara said, “The high prices are an incentive to produce and we will see increased production this year. They also discourage smuggling as a safer selling procedure is preferred by all.”
     
    He added that the country will also benefit from the improved prices as it means that there is more foreign currency which will cushion the country from global inflation and will also provide stability on the foreign exchange auction.
     
    On a quarterly basis, Fidelity Printers and Refiners (FPR), the country’s sole buyer and exporter of gold reported that export receipts increased 123 percent to US$463.1m in the first quarter of this year.
     
    The export proceeds of US$463.1m in the first quarter were better than the US$207.23m realised in the prior comparative period owing to firming commodity prices on the international market.
     
    In the three months to March, FPR received 7.70 tonnes of gold from miners from 4.02 tonnes delivered in the same period last year. Deliveries increased by 3.68 tonnes year on year representing a 91.54 percent increase.
     
    The primary producers delivered 2.75 tonnes of gold compared to 2.39 tonnes the same period last year. The variance in first quarter primary producer’s delivery was 15.06 percent.
     
    Small scale producers delivered 205.56 percent more gold in the first quarter in comparison with the same period last year. The small scale miners produced 4.95 tonnes of gold in the year to march, 3.33 tonnes more than the 1.65 tonnes produced in the same period last year.
     
    Traditionally, January and February are characterised by low deliveries as most operations are affected by the rains. However, the increased deliveries can be attributed to favourable policies introduced by regulatory officials last year that have reduced the rate of smuggling and encouraged deliveries.
     
    Last year the country’s small and large gold producers delivered a total of 29.63 tonnes of gold to FPR, a 55,5 percent increase from the 19.05 tonnes delivered in 2020.
     
    This came as large gold producers delivered 11.16 tonnes to FPR in 2021, while small-scale producers contributed 18.47 tonnes.
     
    Yearly gold deliveries bounced back year after year after a downward spiral since 2019, with gold deliveries hitting 33.4 tonnes in 2018, they fell to 27.66 tonnes the following year. Gold delivered in 2020 fell further to 19.05 tonnes a five-year low, before coming in at 29.6 tonnes last year.
     
    FPR has set a target of 40 tonnes this year if it maintains the current incentives and timeous payments for gold deliveries. However, the country is still off the pace needed to reach the 40 tonne production year, as deliveries are currently averaging 2.57 tonnes per month against the desired 3.33 tonnes per month needed to reach the target.
     
    Isaac Kwesu the President of the Chamber of Mines said, “The 40 tonne target is very achievable if the current policies are maintained and not tempered with because they have sought increased incentive to produce.”
     
    However, the Chamber of Mines has been engaging the government on some policies they feel still need to be addressed in order to increase production even further.
     
    “We have written to the government that the retention ratio should be increased to 80-85 percent in order to see the mines expand and be sustainable,” Kwesu added.
     
    The association is also fighting for constant power supply in order to lower cost of production as well as not to disrupt production. Multiplicity of taxes is also an issue the Chamber of Mines feels needs to be addressed by consolidating the taxes in order to achieve the ultimate goal of 100 tonnes per year.
     
    Gold prices have surged nearly 18 percent thus far in calendar year 2022 to around US$2,050 per ounce on the backdrop of the ongoing Russia – Ukraine conflict and there is more headroom over the next few months, believe analysts at globally renowned bank Goldman Sachs, who expect the prices to rise another 25 percent to US$2,500 an ounce by the year-end – Harare

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