via Fidelity Printers and Refiners, ZB tie-up bears fruit Sunday, 01 December 2013 Sunday Mail
A tie-up between the gold-buying arm of the Reserve Bank of Zimbabwe, Fidelity Printers and Refiners, and ZB Bank, enabling the refiner to establish gold-buying centres in selected bank branches, has led to a 15 percent increase in bullion deliveries since April when the partnership was forged.
Under the arrangement, gold suppliers bring their yellow metal for assessment following which they are issued with a voucher stating the amount of bullion they would have sold and its net value.
The voucher can be redeemed at the bank for hard cash, while an option to deposit the money into an account — existing or new — is available.
ZB Bank branches that are currently housing Fidelity Printers and Refineries gold- purchasing centres are in Kadoma, Kwekwe, Zvishavane, Gwanda, Masvingo, Gweru and Mutare, which are some of the major gold- producing areas in Zimbabwe.
It is believed that the partnership, which is renewable on an annual basis, has managed to increase sales of the yellow metal through formal channels.
Estimates suggest that 30 percent of total gold deliveries to Fidelity is now through this system.
Zimbabwe has been losing potential revenue over the years through smuggling to neighbouring countries such as South Africa, Zambia and Mozambique.
The Minerals Marketing Corporation of Zimbabwe recently indicated that the country was losing over US$50 million worth of gold every month through smuggling, as Fidelity Printers and Refiners failed to offer a competitive price to gold producers.
Fidelity Printers and Refiners chief executive Mr Alen Marimbe said in a recent interview the gold-buying centres that have been established in selected ZB Bank branches around the country have resulted in an increase in gold deliveries through approved channels.
“At present, I can say more than 30 percent of the gold that we are buying is coming through the various gold-buying centres that we have established in selected ZB Bank branches.
The figure has been growing with each passing month from the time we signed the agreement. I believe the move has created convenience and added security for the gold suppliers,” he said.
Before the liberalisation of the gold-buying regime in 2009, Fidelity Printers and Refiners used to be the country’s sole buyer.
Producers now have an option of selling to entities other than Fidelity.
“As long as there is scope for it (the co-operation with ZB Bank), we will continue. We want to provide miners with secure places to sell their gold. In previous instances, they feared to visit gold centres as it made it obvious to thieves or potential thieves that they would have come to perform transactions.
But with this development they just walk in and out like any other normal banker, thereby, reducing the risk,” explained Mr Marimbe.
He added that the arrangement was not only tied to ZB Bank but could be extended to other financial institutions that have operations in strategic gold mining areas.
ZB Bank acting managing director Mr Shadowsight Chiganze said the bank, through Fidelity Printers and Refiners, had created a business environment that was going to help not only the gold miners, but the country at large by increasing contact between the gold producers and buyers.
“They (Fidelity) were renting premises in many towns around the country in places where ZB Bank is represented.
“This created an opportunity for us to offer them excess office space within our buildings as it would assist them reduce their rental expense. The bank saw an opportunity of selling bank products, especially to miners that were previously unbanked. This will reduce the risk associated with carrying and dealing in cash for miners. Instead, they would access their funds from bank accounts through bank transfers and even pay their suppliers by Real Time Gross Settlement Systems.
“Additional revenue has also been raised by the bank through utilisation of empty space,” said Mr Chiganze.
It is estimated that Fidelity Printers and Refiners needs at least US$50 million to recapitalise and play a leading role in local gold purchases.
There have been calls for the entity to bring on board new private investors.
However, the Reserve Bank of Zimbabwe, which owns a 100 percent stake of firm, has since made it clear that it will maintain a controlling stake in the firm.
Gold production is currently on a rebound, with country having produced about 12 tonnes in 2012. And despite volatile international prices for the yellow metal, averaging US$1 600 per ounce, stakeholders are confident of a persistent rise in gold output to 15 tonnes by year end.
Fidelity Printers was disqualified from the London Bullion Market Association after local gold miners fell short of producing the mandatory 10 tonnes of bullion in 2008.