Zim gold deliveries tumble nearly a third to 19 tonnes in 2020

HARARE - Gold sales to Zimbabwe’s sole buyer and exporter of bullion Fidelity Printers and Refiners

(FPR) fell 31 percent to 19 tonnes last year after lower deliveries from small-scale miners, official data showed on Monday.

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. That forced many of the miners to sell their gold to illegal buyers, industry officials say.

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

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 tonnes from 27.66 tonnes in 2019.

Small-scale producers sold only 9.35 tonnes last year compared with 17.48 tonnes in 2019. The government says gold worth at least $1.2 billion 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.

Meanwhile, Gold fell to extend the biggest drop in two months amid gains in the dollar and Treasury yields, with investors also weighing President-elect Joe Biden’s pledge to detail plans for huge US economic aid.

Bullion endured a switchback week as January got under way, with early gains getting overturned as the surge in Treasury yields damped the appeal of the non- interest bearing asset.

That’s come as the dollar recovered from its lowest level in almost three years. On Monday, prices sank, then pared losses.

Gold posted the biggest annual rise in a decade last year as the pandemic ripped through the global economy, and central banks and governments boosted stimulus. With vaccines getting rolled out, traders are weighing up the haven’s prospects over 2021, assessing drivers including the outlook for further massive support, shifts in inflation expectations, and appetite for risk.