Small scale miners turn to the black market
...after RBZ reduces foreign currency allocation from 70 percent to 55 percent
Small scale gold miners have only deposited 20 kilograms of gold to Fidelity Printers and Refiners since the announcement of the monetary policy.
This comes after the Reserve Bank of Zimbabwe reduced the foreign currency allocation for small scale gold producers from 70 percent to 55 percent.
The country`s sole gold buyer had been receiving an average of 60 kg of gold per day.
In January, RBZ received about 1.5 tonnes of the yellow metal, with 1 tonne coming from the small scale sector and the rest from primary producers.
Speaking at a sustainable mining workshop in Bulawayo, Tuesday, officials from the Zimbabwe Miners Federation (ZMF) said the drop in gold receipts at the country`s sole gold buyer was a sign small scale miners were not happy with the policy.
“A week after the monitory policy was announced only 20kg of gold has been deposited to Fidelity. The average target expected for the month of February is one tonne (1 000kg),” said ZMF spokesperson Dosman Mangisi.
“The miners are not pleased with the Monitory Policy. When selling gold, they are being given 55% of their money in USD and 45% in Real Time Gross Supplement dollars.”
In the Monetary Policy Statement presented by RBZ Governor John Mangudya on Wednesday last week, retention thresholds for small-scale gold miners were reduced to 55 percent from 70 percent.
Mangisi said the monitory policy had led to small scale miners selling their gold in the black market, where they are paid in foreign currency.
He revealed that in a meeting they had with the RBZ on Tuesday, officials from the central bank confessed to having forex challenges which are affecting not just the mining sector, but every other productive sector.
“RBZ said they are having challenges with accessing foreign currency, therefore, making it difficult for the economy to function.”
Small scale miners present at the workshop revealed that the new RBZ policy had affected their operations since they buy machinery and consumables in foreign currency.
“Our machinery is sold in United States dollars and the chemicals we use such as cyanide and mercury are bought using foreign currency. Even our employees want to be paid in foreign currency,” lamented Nomuhle Ncube from the Bubi Small Scale Miners Association.
The mining sector has become one of the key foreign currency earners for the country with small scale miners playing a pivotal role in gold production.
