Price of gold doubles in Zim
Tue, 28 Mar 2006
Fidelity Printers and Refiners has increased the price of gold in Zimbabwe by more than 100 percent to narrow the gap with the black market valuation, the state-owned Herald reported on Tuesday.
Gold is now Z$2.5-million per gram, up from Z$1.2-million compared to the black market price of Z$2.7-million, a move that has been welcomed by industry officials who said it was "long overdue", the paper said.
"Fidelity, a subsidiary of the Reserve Bank of Zimbabwe, has suffered from a sharp decline in gold deliveries in the past year as miners opted for the more lucrative black market," it added.
Rampant smuggling
Gold deliveries last year fell by 37 percent, to 13 000 kilograms compared to 21 300 kilograms in 2004. The decline was attributed to rampant smuggling due to lax controls.
Official estimates are that Zimbabwe could have been "prejudiced of as much as US$500-million", the Herald stated.
"Of late, miners have been outspoken about the effect of low gold prices and a fixed exchange rate system, which they said made operations expensive. They also lamented the large price disparity between Government's price and that on the black market, which until Thursday, was Z$1.1-billion per kilogram. Fidelity's price is now Z$2.5-billion to the black market's $2.7-billion per kilogram," the report added.
"This is a good development and we hope it will promote more deliveries to Fidelity Printers and Refiners who are the established producers," David Murangari, the Chamber of Mines' chief executive told the Herald.
Daniel Guruve, the secretary-general of the Zimbabwe Miners' Federation said the review was long overdue.
"The price increase was long overdue and we welcome it. Miners have been facing increasing operational costs, therefore the increase in the gold price must be made timeously. We urge them to keep making these price reviews in response to the rising operations costs so that miners will be cushioned," he said. |
