Wednesday, March 12, 2014

Zimbabwe Fidelity Owes Gold Producers US$50 Million

Fidelity owes gold producers US$50m

March 12, 2014
Tinashe Makichi Business Reporter

RESERVE Bank of Zimbabwe subsidiary Fidelity Refineries and Printers owes local gold producers about US$50 million dating back to the hyperinflation era when the company stopped operating.RBZ Acting Governor Dr Charity Dhliwayo said the debt has since been assumed by the Ministry of Finance and Economic Development which will settle all payments “soon.”

“Fidelity owes local gold producers US$50 million accrued mostly during the hyperinflation era and efforts are being made to repay the money.

“The debt has been assumed by the Government and evidence is being presented to Ministry of Finance and Economic Development,” Dr Dhliwayo said.

She said payments are going to be made soon in order to restore confidence among the gold producers.

Most big gold producers were reluctant to sell their gold despite a Government directive that Fidelity is now the sole buyer of the yellow metal.

However, companies like Caledonia Mining Corporation have already sold gold worth over US$3,8 million to Fidelity Printers although it is still owed about US$4 million dating back to 2008.

Dr Dhliwayo said Fidelity Printers has secured enough funds to purchase all the gold produced in the country.

Fidelity Printers and Refiners purchased 969kg of gold in January this year alone after the unit resumed its role as the sole buyer of gold in the country and the gold has been bought mainly from primary miners.

“Fidelity has the capacity to refine gold and offer competitive prices. They can buy all gold from primary and artisanal miners.

“At present Fidelity is buying 100 percent of gold from primary mines and we wish to extend our buying to small scale miners,” Mrs Dhliwayo said.

All gold purchases at Fidelity are funded from retained funds and bank borrowings.

The resumption of gold refining at Fidelity is expected to pave way for Zimbabwe’s re-admission to the London Bullion Marketing Association.

Early this year Finance and Economic Development Minister Patrick Chinamasa said plans were in place to make sure gold production is improved in the country through repayment of money owed to producers by Fidelity Printers.

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