- Total gold deliveries up to 10.18 tonnes from 5.4 tonnes
- Deliveries by small scale miners increased by 196%
- Total deliveries short of the 60-tonne target
Harare- Total gold deliveries in the first four months of 2022 increased to 10.18 tonnes from 5.4 tonnes representing an increase of 90% in the total deliveries. Gold deliveries to Fidelity Printers and Refiners(FPR) saw small scale deliveries rise by 196% to 6.56 tonnes in the first four months of 2022 compared to the first four months of the previous year,2021.
This growth in deliveries is in line with The Ministry of Mines and Mining Development’s target of gold deliveries growth shortly. The Ministry wants to boost gold deliveries to Fidelity Printers and Refineries (FPR) and achieve the US$12 billion targets by 2023 in line with vision 2030.
The Ministry of Mines and Mining Development wants to ensure that the Government’s set target of 60 tonnes of gold deliveries to FPR is met compared to 32 tonnes last year. Compared to the targeted deliveries, it means essentially that the target is 17% complete with the remaining 83% having to be achieved in the remaining 8 months which is highly unlikely.
To be able to achieve the 60tonne target, it means that the remaining 83% of the unachieved target has to be delivered and this is 49.8 tonnes in the remaining 8 months or simply 6.225 tonnes of gold delivered to Fidelity Printers per month. Considering that the first 4 months of 2022 saw total deliveries of 10.18 tonnes or roughly 2.545 tonnes per month it is highly unlikely that the monthly target to achieve the government’s target is possible.
While incentives have been put in place by the Reserve Bank through FPR for an improvement in the cash flow, as well as trying to match the FPR prices with the international market price, challenges that could deter reaching the government target exist.
Major drawbacks for the mining sector were from several factors such as unstable power supply, heavy rains in some cases, which culminated in the flooding of shafts, working capital challenges and subdued demand for some minerals.
Smuggling is also a major concern because the prices offered by FPR for gold are at $56.10 per gram compared to international prices of $60.04 leading many to opt to smuggle to derive the best utility from accessing the best prices.
According to many analysts, gold prices will soar over the $2000 mark /ounce meaning that by improving the conditions that mining is facing with regard to gold, the targets set by the government become more achievable and growth in the gold deliveries will result.
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