Gold coins to boost small miners’ output

Mining industry stakeholders, including the Zimbabwe Miners Federation (ZMF) and Better Brands Jewellery (BBJ), have said the imminent launch of mosi-oa-tunya gold coins is expected to “boost production, beneficiation and the empowerment of millions by offering an inflation hedge”.

The development comes as Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya, said the one troy ounce gold coins would be sold in local currency as well and the two institutions play a pivotal role in Harare’s yellow metal mobilisation plans since smallscale miners dominate deliveries to Fidelity Gold Refinery (FGR).

“The RBZ has created one extra use of gold in Zimbabwe and moved to a higher level of the value chain,” ZMF president Henrietta Rushwaya said last week, adding another big benefit of the coins was that “they will act as a medium of exchange for national transactions and safe haven”.

“Gold has many other uses, which are not covered in the enabling Act, but at the stage of the coins the commodity has been applied to produce a distinct product with varied uses and characteristics,” she said.

On his part, BBJ chief executive Pedzai “Scott” Sakupwanya said: “We are pleased by this development as it fits into President Mnangagwa’s beneficiation mantra and our own vision of adding value to Zimbabwe’s mineral resources.”

“As a company, we believe this is an opportunity for many to invest in solid, inflationhedging assets and the timing of the initiative could not have been better, as the country can take advantage of the rising metal prices and launch a product that can earn us millions and stabilise household incomes,” he said.

Mr Sakupwanya added that the coins project was “key in achieving the US$12 billion mining industry target” as the sector was seen nudging 75 percent of that milestone by year end.

On Tuesday, Dr Mangudya said the gold coins would be introduced on July 25, 2022 and used to shore up the faltering Zimbabwean dollar, as it was a “store of value (and) alternative investment option” to the much sought-after American unit.

Plans are also underway to ensure that the investment security is easily convertible at Fidelity Gold Refinery, Aurex and local banks — and a buy back option “to instill confidence” by the central bank itself was in place.

All major currencies can also be used to buy the coins, which will have a 22-carat purity.

“The coin will have liquid asset status . . . it will be capable of being easily converted to cash and will be tradable locally and internationally,” Dr Mangudya said.

The RBZ chief said the coins can be used “as collateral for loans and to meet statutory requirements by institutional investors as they have prescribed asset status”.

Last month, President Mnangagwa told a Chamber of Mines annual meeting in Victoria Falls that the gold sub-sector had risen 86 percent year-on-year and artisanal miners under ZMF, and affiliates like BBJ remained key — at 60 percent of national production — to Zimbabwe’s ambitions of producing 100 tonnes a year by 2023.

The statement also comes as Mines and Mining Development Minister Winston Chitando, has said both large and small-scale miners had experienced “positive growth”, as the country is pinning its hopes on earning US$4 billion from bullion exports by next year.

In addition to sound government policies such as the on-going incentives, Rushwaya and Sakupwanya’s organisations believe the coins project will boost FGR’s deliveries.-The Herald