Zimbabwe’s central bank has announced plans to allow large-scale gold mining companies to directly export a portion of their bullion.
Reserve Bank of Zimbabwe’s director of exchange control Farai Masendu revealed the plans and said that the move follows the bank’s gradual motive to ease its control of gold trading in the country. Miners who increased gold production above their average monthly output would be allowed to directly export that portion.
“The central bank-owned Fidelity Printers and Refiners (FPR) is the sole buyer, refiner and exporter of gold in the southern African nation but has at times struggled to pay producers. This would enable the gold miners to secure funding in form of gold loans, to enhance their gold production,” said Masendu.
Illegal export practice
The central also bank plans to unbundle FPR into two separate companies and sell a majority stake in the new gold refinery business to miners. Zimbabwe’s mining sector has a significant role in the development of the country as it brings foreign currency, contributes to government revenue and provides for infrastructure development.
However, the government noted that gold worth US $1.2 billion is illegally exported from Zimbabwe annually. Majority of the working population can be found in the informal sector. And in mineral-rich areas of the country, people are continuously risking their lives digging underground in search of gold, hoping to make enough money to take them out of poverty. Small-scale miners, which extract most of the precious metal in Zimbabwe, blame low prices and late payments by FPR for the leakages.