RBZ in dramatic U-turn on Fidelity privatisation

As part of the unbundling process, which has since been suspended, FPR was going to be split into two entities namely Fidelity Gold Refinery (FGR) and Printing and Minting Company of Zimbabwe (PMCZ).

At the time of the planned privatisation transaction, authorities had indicated that the ultimate plan was to remodel the entity in the same way as the Rand Refinery of South Africa which is owned by private shareholders.A myriad of challenges hampering gold production in Zimbabwe ranging from smuggling, informal mining operations and low producer prices were expected to be addressed by the then planned privatisation of FPR. In 2020, the central bank increased the gold retention threshold to 70% in foreign currency from sale proceeds from 55% in a policy move that was aimed at ramping up output. Under that gold trading matrix, producers of the yellow metal would receive 30% of their proceeds in the local currency at the prevailing exchange rate.

However, prior to that, the marketing framework stood at 55% in foreign currency while the remainder was paid in the local unit, sparking outrage from producers.

At the heart of their concerns, producers of the precious metal indicated that inputs and service providers were charging in the greenback. Coupled to that, mining firms also argued that upwardly reviewing the foreign currency thresholds would cushion them from the rising cost of fuel indexed in the greenback while they would also have the leg room to remunerate workers who were demanding wages in foreign currency.