Call for increased gold production to boost new currency Minister Winston Chitando

Farirai Machivenyika, Harare Bureau

Mines and Mining Development Minister Winston Chitando yesterday challenged the gold sector to harness efforts towards increased production of the yellow metal, as it has a direct effect on the credibility of the new currency, the ZiG.

Minister Chitando said this during a send-off workshop for the 13 teams that will go round the country on the first gold mobilisation exercise for the year.

Last month, Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mushayavanhu, launched the ZiG, which is backed by gold, other precious minerals and foreign currency reserves. 

“As you may be aware, recently our currency was anchored on gold hence the need to ensure that all gold trade be done through the formal channels and eventually find its way to Fidelity Gold Refinery, our sole gold exporter.

“Increased gold production will boost the new currency by increasing confidence and credibility. The ZiG is a gold-backed currency, meaning its value is tied to the value of Zimbabwe’s gold reserves. 

“Increased gold production directly increases those reserves, thus strengthening the perception of the currency’s stability, leading to greater confidence in the ZiG by both domestic and international actors,” Minister Chitando said.

He added that gold mobilisation has proven to be a successful initiative, spearheading growth in the mining sector and contributing significantly to the economy.

Over the years, it has remained a cornerstone Government project for propelling the mining sector and the Zimbabwean economy forward.

“The gold sector in Zimbabwe has proved to be strategic to the mining industry and the national economy at large. For the year 2023, gold deliveries to Fidelity Gold Refinery stood at 30,1 tonnes. The 2024 gold deliveries to FGR set target stands at 40 tonnes. 

Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu

“The key to realising this target is the plugging of side markets, which are a pariah to our efforts in the mining sector and to the development that we hope to see achieved,” he said.

From January to April this year, the gold deliveries to FGR sit at 8,4 tonnes, a 1,9 percent decline from the 8,57 tonnes delivered during the same period last year.

However, for the first four months large-scale miners delivered 4,3 tonnes against 3,4 tonnes for the same period in 2023, representing a 26 percent increase. 

“This is a result of expansion projects and use of technology (bioleaching) to extract gold by the large-scale miners.

“For small-scale miners, the gold deliveries to FGR have decreased from 5,2 tonnes in 2023 to four tonnes in 2024, a 23 percent decrease. The small-scale miners have contributed 48 percent of the gold delivered to FGR for the year 2024, as compared to 60 percent contribution for the previous year, 2023,” he said.

The minister said the mobilisation exercise was two-fold, firstly to encourage artisanal and small-scale miners to formalise their operations and channel their gold through official channels and ensure adherence to regulations throughout the gold mining value chain by combating illegal mining practices, preventing smuggling and promoting responsible environmental practices.

 

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