Decline in Zimbabwe small scale mining results in 31% lower annual gold sales

ZIMBABWE reported a 31% decline in gold sales in 2020 owing to lower deliveries from small-scale miners, said Reuters.

Citing official data, Reuters said sales to Zimbabwe’s sole buyer and exporter of bullion, Fidelity Printers and Refiners (FPR) fell to 19 tons.

FPR pays US dollars in cash to small-scale gold miners, but a shortage of hard cash caused delays in payments most of last year. This forced many of the miners to sell their gold to illegal buyers, said Reuters.

Deliveries of gold, the top foreign currency earner, have been on the decline since reaching a record 33.2 tons 2018, mainly due to delays by FPR in paying miners, the newswire said.

The central bank last month announced plans to unbundle FPR into two separate companies and sell a majority stake in the new gold refinery business to miners, in a bid to boost output.

FPR data showed that total gold deliveries fell to 19.05 tons from 27.66 tons in 2019. Small-scale producers sold only 9.35 tonnes last year compared with 17.48 tons in 2019.

The government says gold worth at least $1.2bn is illegally exported from the country annually.

Last month, Zimbabwe banned the use of mercury in mining, which could further curtail output in the short term from the small-scale sector, which is the major user of the toxic metal when extracting gold.