RBZ shelves plans to sell gold buying unit

THE Reserve Bank of Zimbabwe ( RBZ) has indefinitely suspended plans to dispose of its controlling stake in the country’s sole gold buyer, Fidelity Printers and Refinery to new shareholders, a senior official confirmed.

The intended to bring in new local

RBZ shareholders into the gold buying and marketing business upon completion of a planned unbundling of Fidelity Printers and Refiners ( FPR).

It was believed roping in some of the key players in the production of gold into the marketing of the mineral would reduce side marketing, believed to be costing Zimbabwe significant export revenue that some unconfirmed figures say go beyond

US$ 100 million monthly.

However, the apex bank has since shelved the plans citing the need to give more time for a proper due diligence process.

The bank said it would, for now, remain the sole shareholder in the unbundled units to be created; Fidelity Gold Refinery and Printing and Minting Company of Zimbabwe ( PMCZ).

The announcement this week puts to rest speculation over who, among the top gold producers, would emerge the major shareholder in the gold buying and processing entity.

is a 100 percent owned subsidiary of

FPR the incorporated in 1978. At inception RBZ in 1966 FPR’s business was largely printing of secure banknotes, operated as a department of the apex bank.

Finance and Economic Development Minister Mthuli Ncube in his 2021 mid-term budget review statement last year, said the unbundling of was underway.

FPR

He said the 60 percent stake in the unbundled gold refinery entity would be offered to gold producers, further pointing out that 10 potential investors had accepted the controlling 60 percent stake in the business, which is valued at

US$ 49 million.

The unbundling of the firm was designed to partially privatise the gold refining business by allowing private players in the gold mining and production sector to acquire a shareholding.

It was felt allowing producers to acquire

a stake in Fidelity would secure and endear the gold miners’interests in the production, marketing and trading of gold in Zimbabwe.

However, concern was raised by law legislators and other stakeholders who felt the unbundling of the firm was moving at snail’s pace after the January 2022-timeline was missed.

But in a dramatic turn of events, Gover

RBZ nor Dr John Mangudya, said on Monday the apex bank had suspended plans to unbundle and bring on board new shareholders into the business.

“The prefers to be the sole shareholder

RBZ in the two unbundled entities Fidelity Gold Buying and Zimbabwe Printing Company. The decision was necessitated by the bank to exhaustively and meticulously finish due diligence on the new shareholders.

“As you are aware, Fidelity Printers is a service institution serving the gold producers – small, large and artisanal by processing their gold just as good as the Minerals Marketing Corporation of Zimbabwe processes minerals for the export market on behalf of the miners or Grain Marketing Board buying maize,”said Dr Mangudya.

The shelved plan was that, once split, the

would cede a 60 percent stake in the

RBZ gold buying and refining business to miners, a model similar to that of the Rand Refinery in South Africa.

Zimbabwe’s largest gold producers include Blanket Mine, Freda Rebecca and RioTinto among some of its large mine houses.

Accordingly, the bank would retain 40 percent shareholding in and dispose of 60

FPR percent shareholding to both the large-scale and small-scale gold producers.”

Based on the average quantity of gold delivered to over the past three years,

FPR large scale miners were expected to hold a combined 50 percent shareholding in the unbundled gold buyer.

A 3 percent stake was earmarked for gold buying agents and the remaining 7 percent shareholding would go to the small scale producers through their representative bodies.

Fidelity’s refinery was established in 1987 with an annual gold refining capacity of 50 tonnes and can process to a purity level of up to 99,999. Commercial operations commenced in April 1988.

Since Fidelity is no longer accredited to the London Bullion Market Association, its gold is sent to the Rand Refinery in South Africa for hallmarking, to allow it to trade on the international market.

The had said the partial privatisation

RBZ would endear the private sector’s interests in the production and marketing of gold in Zimbabwe.

It was felt that by being part of the decision-making process on gold trading, gold producers’ compliance levels in the trading of gold would significantly increase.

Recently, Dr Mangudya said the process to choose investors was delayed to allow due diligence.

“It has taken a long time for us to complete the due diligence on all the possible investors.

“Yes indeed, Fidelity is a good investment. The value of the US$ 49 million was determined by reputable external auditors who carried out the valuation of FPR,” Dr Mangudya said recently.