Gold miners demand 80% payments in US$

by Stephen Chadenga

SMALL and medium-scale gold miners are now demanding that at least 80% of their gold sales to the central bank be paid for in the more stable United States dollar to enable them to sustain their operations.

Confederation of Zimbabwe Miners (CZM) president, Advance Rangani Chauke said such an arrangement would improve the operations of miners since the bulk of their consumables are imported.

“We would prefer a situation whereby we are paid 80% in US dollars and 20% Zimdollar cash for our gold,” Chauke told NewsDay Business yesterday.

“Such an arrangement would help us keep afloat as we have to purchase most of our consumables from outside the country. The mining sector contributes a lot in terms of generating foreign currency and we feel government should also cushion us from the costs we incur.”

Recently, the Reserve Bank of Zimbabwe lowered the forex retention threshold for small-scale miners from 70% to 55%.

The central bank argued that the move was largely informed by the fact that traditional sources of US dollar cash had shut their doors on Zimbabwe.

Miners, however, argue that the current retention threshold would cripple miners’ operations.

Gold production subsequently nosedived last year and failed to meet the projected 40 tonnes as players preferred to sell gold at attractive prices offered on the black market.

Zimbabwe, which is endowed with vast natural resources seeks to create a US$12 billion mining industry by 2023.

Under the US$12 billion mining roadmap, gold is expected to contribute US$4 billion, platinum US$3 billion, while chrome, iron, steel diamonds and coal will contribute US$1 billion.

Lithium is expected to contribute US$500 million, while other minerals will contribute US$1,5 billion.