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Gold deliveries to FPR at 21.4t as small scale sector contribution increases

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Gold deliveries to FPR at 21.4t as small scale sector contribution increases

HARARE – Gold deliveries to Fidelity Printers and Refiners closed 2016 at 21.43 tonnes, an increase of nearly 16% from 18.5t in 2015, mainly spurred by a growth in the contribution of small scale miners.

Stats from FPR show that the gap between primary producers and small scale producers continues to narrow at 11.75t and 9.68t respectively. However, in the fourth quarter, deliveries from the small scale sector surpassed primary producers at 3.16t vs. 2.95t.  Historically, in 2005 small scale miners produced slightly under 50% of the total 21t produced.

The resurgence in the sector is mainly attributable to various initiatives from the Reserve Bank of Zimbabwe and the Ministry of Mines to curb smuggling of gold in the small scale mining sector. Reports estimate that about 50% of gold produced in Zimbabwe is smuggled.

The country has about 25 000 registered small scale miners while it is estimated that 500 000 are involved in artisanal mining.

The Central Bank set up a $20million gold development initiative facility for small scale gold miners to help reduce leakages and ultimately increase gold production. The loan facility was supported by a downward review of milling fees, licence fees for explosives, EMA fees as well as Rural District Council fees with the aim of reducing the cost of doing business in the mining sector which now plays a key role in driving economic growth in the country.

However, challenges in the small sector remain and these include, lack of basic infrastructure which in turn leads to high utilization of rudimentary mining equipment, lack of geological information of the ore bodies and lack of management skills and financial literacy.

On the figures, November registered the highest deliveries at 2.16t while January had the lowest at 1.49t. The average price for the year was at $40 135/kg. The highest monthly average price per ounce obtained in the year was $1 341.09 which was achieved in August.

The statistics however do not include deliveries from the PGM mines which on average produce about 3 to 3.5t of gold annually. If these are included, Zimbabwe met its 2016 target of 24t.

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