Gold Mining Investors Call For End To RBZ Monopoly

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Gold Mining Investors Call For End To RBZ Monopoly

Gold mining investors have called for the abolition of legislation which gives the Reserve Bank of Zimbabwe (RBZ) monopoly to buy gold saying it stifles investment.

Gold miners are currently obliged to sell the precious metal to Fidelity Printers and Refiners which pays them seventy percent (70%) in United States dollars and the remainder in local currency.

B2Gold and Caledonia Mining which are considering acquiring assets in Zimbabwe argue that the legislation is making it hard to raise capital for investment projects. B2Gold CEO Clive Johnson said the Canadian company has held talks with the government about changing the rules to unlock investment. Johnson said:

The ability to handle gold sales is critical to a company like ours. It’s an issue that would have to be clarified first for one to buy some assets and build some gold mines.

These remarks were echoed by Steve Curtis, the CEO of Jersey-based Caledonia, a company that is interested in buying one of Zimbabwe’s largest gold operations. Curtis said his company would need to take charge of its gold sales. He said:

Those are the conversations the authorities have to get their heads around if you want an industry to be invested in. That legislation, if they get rid of it, the level of investment would no question be up.

The current set-up is believed to be one of the reasons why gold delivery to the central bank has been dwindling by 30% in the first 10 months of 2020 from a year earlier while alleged gold smuggling through the country’s porous borders has ballooned.

Fidelity Printers and Refiners delay by up to two weeks paying for gold delivered a situation which according to Chamber of Mines of Zimbabwe CEO Isaac Kwesu is adversely affecting producers.

Gold is one of the high forex earners for Zimbabwe and the decrease in delivered gold is worrying.

More: NewZimbabwe



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