- The Bank is disposing of its total stake in Tuli Coal to Government
- FPR to be divided into two separate entities focused on gold refining and printing and minting
- The former to be partially privatizes
- 60% shareholding up for grabs for private miners and gold buying agents
The Reserve Bank of Zimbabwe (RBZ) has undertaken a decision to completely divest from its coal mining subsidiary Tuli Coal (Pvt) Limited and to break Fidelity Printers and Refiners (Private) Limited into two separate entities.
In a press statement released on Tuesday the 15th of December 2020, Reserve Bank Governor, John Mangudya said that the Central Bank’s entire interest in Tuli Coal will be sold to the Government of Zimbabwe while Fidelity printers will now be unbundled into two business one focused on gold refining and the other on printing and minting.
“The reserve bank of Zimbabwe (the Bank) would like to inform members of the public that at its meeting on 9 December 2020, the Bank’s board resolved to dispose of Tuli Coal (Private) limited to Government and to unbundle Fidelity Printers and Refiners into two business entities (i) gold refining and (ii) printing and minting,” the governor said.
Dr Mangudya revealed that the Bank had been meaning to dispose of Tuli Coal for a long time and they believe the move to sell it to Government will yield some economic benefits.
“The disposal of Tuli Coal will fulfill the Banlk’s long-held desire to sell its entire equity in the asset, which is capable of predominantly producing thermal coal, for the benefit of the economy.”
Meanwhile, the unbundling of FPR is said to be a move meant to partially privatize the gold refining business and the Bank says it is going to dispose 60% of shareholding to private players into both large-scale and small-scale mining with 50% up for grabs for large scale miners, 7% for small scale miners and the remaining 3% reserved for major FPR gold buying agents.
“The unbundling of FBR is designed to partially privatize the gold refining business by allowing private players to acquire a stake therein in the process secure and endear the private sector’s interests in the production and marketing of gold,” the governor explained.
To date, FPR was the country’s sole gold buyer with a monopoly over all official gold trading activities and pricing which saw them undervaluing gold as compared to international prices which resulted in a slump in deliveries as miners opted for side marketing.
Due to this poor domestic pricing, 12,8 tonnes of gold were delivered to FPR between January and September 2020 compared to the 18 tonnes racked in over the same period in 2019, foreshadowing that the 25 tonne target set for gold deliveries this year will be widely missed.
The move to privatize the refiner is therefore somewhat a remedy for side marketing as private players will opt to sell to the refiner knowing they have a piece of the pie.
Equity Axis News.