FIDELITY Gold Refinery has projected a 58% increase in gold deliveries for 2025 to 38 tonnes on increased output and prompt payment for deliveries in a major boost in efforts to increase foreign currency earnings.
The yellow metal, one of the country’s single largest forex earners, is currently demonstrating remarkable resilience and growth, indicating a positive outlook for 2025, according to FGR general manager Peter Magaramombe.
Magaramombe told delegates during the just-ended Mine Entra 2024 in Bulawayo that gold deliveries for the nine months to September 30, 2024 amounted to 24 tonnes representing a 7,2% increase compared to the same period last year.
Gold and cash reserves are backing the new currency, Zimbabwe Gold (ZiG), which has been stuttering despite firming gold prices on the international market.
ZiG has depreciated by over 40% on the formal market and 50% on the thriving parallel market since its debut in April.
“The gold sector has demonstrated remarkable resilience and growth, despite global economic uncertainties. This performance is a testament to the sector’s potential and the efforts of our stakeholders,” Magaramombe said.
“Fidelity Gold Refinery received a total of 24 tonnes of gold, representing an increase in gold deliveries of 7,2% if compared to the same period last year.
“This growth is attributed to increased mining activities and prompt payments of our miners. All our buying centres have cash all the time. It’s a cash-and-carry business.”
- Gold deliveries to hit 40t
- Govt uses agric models to support mining sector
- Gold production down 11%
- Zim produces US$1,1b gold
Keep Reading
On June 30, 2024, the price of gold stood at US$2 324,98 per ounce but had risen to US$2 502,77 on September 1 this year with prices going up again to US$2 658,08 per ounce on September 24, 2024.
As of yesterday, the gold price stood at US$2 655,61 per ounce.
Magaramombe said they engaged miners to sell gold to FGR, adding that there are incentives in that buyers and artisanal small-scale miner that deliver 20kg or more in a calendar month qualify for a 5% gold incentive.
“We project 35 tonnes of gold to be delivered to Fidelity as of December 31, 2024. This projection is conservative, considering the sector’s current momentum and potential several factors underpin our optimism, including the continued implementation of supportive policies, favourable prices and enhanced regulatory frameworks,” he said.
“The year 2025 is promising a positive outlook. The positive trend is driven by factors inherited from the current year 2024 (geopolitical shocks) as well as interest rate cuts by the Federal Reserve and continued gold purchases by emerging market central banks.”
Magaramombe said Fidelity operates 17 gold buying centres strategically located across all gold mining provinces in Zimbabwe.
However, economic and political analyst Rejoice Ngwenya said commodity prices are generally volatile be it gold, platinum, diamond or oil.
“I have no issue with the brightness and resilience of gold in the future. The problem is that our gold is not managed like a crucial resource endowment. It's used for money laundering as shown by the Gold Mafia documentary,” Ngwenya said.
Gold Mafia, a four-part Al Jazeera documentary, exposed a billion-dollar gold laundering operation involving senior officials.
“It does not matter what direction gold prices assume on the global bourse, the benefits will never trickle down to ordinary Zimbabweans.”
He said there was a structural deficiency in the gold supply value chain.
“Zero beneficiation. The ZiG is backed by political propaganda, hypocrisy and lies. It is a fluke that is about to be exposed.
“If gold is ‘looking north’, why is its surrogate the ZiG looking south? Gold should be contesting against the US dollar, not some holographic illusion monikered ZiG,” Ngwenya said.
Economist Prosper Chitambara said while the outlook for gold was glittering, there was a need to build reserves.
"We need to continue to build our reserves; our reserves are currently not adequate to provide a strong backing to Zimbabwe Gold both our gold reserves and US dollar,” Chitambara said.
He said the country has about US$450 million reserves compared to countries like Zambia and Botswana that have around US$4 billion and US$5 billion, respectively.
Chitambara said Zimbabwe should strive to at least build US$3 billion at a very minimum level.
