Gold, platinum anchor access to key credit lines

Finance and Economic Development Minister, Professor Mthuli Ncube, has said gold and platinum reserves have come in handy is assisting the country to access credit lines from both local and international lenders, which is critical in supporting ongoing development projects.

To buttress this momentum, the minister said a deliberate programme would be implemented to boost gold reserves to supplement United States dollar reserves.

Responding to questions from Senators in Parliament last week on efforts being made to shore up the local currency using various mineral resources instead of exporting them, Prof Ncube said gold and platinum are used to secure credit lines.

“We have some structures where we are able to access credit lines from abroad and certain banks using our gold,” he said.

“The gold is supporting access to those credit lines that we can borrow and support projects.

“So those are the two minerals that we have used to support our credit lines,” said Prof Ncube.

“We use these minerals to support the access to the loans in the first place.

However, overtime, we will build gold reserves because we are noticing that to build these gold or platinum reserves, which are in fact ‘hard currency or USD assets’ you have to buy them with USD in the first place.”

Prof Ncube said in due course gold will be accumulated to supplement the country’s USD reserves.
“This is a unique situation out of the fact that we are using the USD as a transacting currency.

If we only had the Zimbabwe dollar and then the hard currency was reserved currency,
then for some of the USDs, we could exchange that for gold and immediately we would
have gold reserves,” he said.
“So, the difference is in the choice of the currency, that is what is causing us to be in this situation but we are using our minerals for another purpose, which is to acquire resources from abroad from certain banks.”

In the first quarter, gold deliveries to Fidelity Printers and Refiners totalled 10 176,83kgs, a significant increase from 5 400,84kgs compared to the same period last year. The bulk of the gold came from small-scale miners who delivered 6 571,22kgs compared to 2 257,16kgs the same period last year.-The Chronicle