‘No hurry to rejoin London Bullion Market Association’
ZIMBABWE cannot be hurried to seek re-admission to the London Bullion Market Association (LBMA) from which it was suspended in 2008 as the country is presently trading its gold to various international markets on favourable terms.
The country was suspended from the LBMA in 2008 after production of the yellow metal nosedived to 4 072 tonnes per annum against the minimum annual requirement of 10 tonnes to guarantee membership.
However, since 2015 Zimbabwe’s annual gold output has been above 10 tonnes ordinarily implying that the country qualifies for readmission to the bullion market.
Being the world’s biggest over-the-counter gold and silver wholesale market where investment financial institutions, dealers, brokers and exchange trade funds among others interact and trade with each other, the LBMA is influential at the global marketing of the yellow metal.
Against this background, the bullion market association that was established in 1987, determines the pricing for gold and silver metal bars across the world.
In recent years, there have been discussions around Zimbabwe’s re-accreditation to the LBMA.
A source told this publication that Zimbabwe’s suspension from the bullion market association was not a cause for concern as the country was trading its gold through various international markets.
“Following our suspension from the LBMA in 2008 when the gold produced in the country could not meet the minimum annual requirements of 10 tonnes, we are selling our gold to various international markets. And that Zimbabwe has not been relisted to that market is not something to worry about,” said the source.
Last year, Zimbabwe produced 30,1 tonnes of gold with stakeholders still to achieve the 40-tonne target that the players set themselves in 2019 was weighed down largely by erratic power supply.
Gold is Zimbabwe’s major foreign currency earner and the mineral has over the years anchored the country’s mining industry creating hundreds of thousands of jobs directly to small and large-scale sectors.
According to the Zimbabwe National Statistics Agency (ZimStat), in 2023 the country surpassed its export targets for the year after realising more than US$7,6 billion in receipts for goods and services it exported.
The country had set a target of US$7,2 billion, but the figures availed by Zimstat indicate that Zimbabwe’s exports increased by 15 percent and the growth was dominated by tobacco, gold, platinum, lithium, flowers, tourism, horticulture, services and agro-processing sectors.
Mines and Mining Development Parliamentary Portfolio Committee chairperson, Remigious Matangira, could not be reached for comment as his mobile phone was not being answered by the time of going to print.
However, his predecessor, Edmund Mkaratigwa said: “It’s not necessarily about returning to the LBMA but about getting value that is consistent with the stipulated price on the LBMA and you know in
marketing, there are economies of scale and discounts attached to the economies of scale.
“So, I would encourage ramping up of production and plugging of leakages to ensure that whichever markets that we access are able to give us a price which is as close as possible to the LBMA.”
Mkaratigwa said while there is no hurry to join the LBMA, it is noble for the country to gravitate towards benchmarking itself with global institutions.
Zimbabwe has options to trade its gold to major bullion markets that include Dubai, India, Singapore, Japan, China and Switzerland.-ebusinessweekly
