Fidelity Printers Refiners (FPR) has announced this week that it will break gold buying monopoly and open the trade to other players, BusinessMail has learnt.
This development follows the Reserve Bank of Zimbabwe’s move to privatise its gold buying business.
FPR is the country’s sole legal buyer and marketer of the yellow metal, but producers were on record bemoaning the monopoly and blaming it for providing fertile ground for inefficiencies that have in turn benefited the black market to the detriment of the economy at large.
Last month, an international research organisation the International Crisis Group revealed that more than $1.5 billion worth of gold is smuggled out of Zimbabwe every year, depriving the cash-strapped economy of crucial foreign-exchange revenue.
In a statement, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said the central bank’s board of directors agreed to a restructuring exercise that will see the bank disposing Tuli Coal to the Government and unbundling of Fidelity Printers and Refiners into two business entities.
“Fidelity Printers and Refiners will be split in two, with 60% of its gold-refining business sold to private investors. The central bank would retain a 40% stake, plus full ownership of the separate printing and minting business,” Mangudya said.
The unbundling will see partial privatisation of the gold refining business allowing private players to be part of the decision-making process concerning the precious mineral.
Speaking to the BusinessMail on the development, one of the key players in the mining sector Engineer Cleverston Sithole, said it was a welcome development.
According to Sithole the central bank’s move is noble because it now allows FPR to conduct its business in a profitable way and be able to benchmark their gold prices competitively in line with prevailing market conditions.
“It creates a system where there is minimal government intervention allowing FPR to conduct its business operations in a free market with faster decision making processes in line with dynamic gold prices. It also allows FPR to attract investors and wealthy shareholders if it decides to list on the stock market,”he said.
The central bank also disposed its coal mining unit, Tuli Coal Private Limited to full equity to the government.
This new structure will see RBZ retaining 40% of its shares in Fidelity Printers and Refiners while disposing of 60% to large-scale and small-scale gold producers.
Recently, the Zimbabwe Anti-Corruption Commision(ZACC) in conjunction with Criminal Investigations Department (CID) Flora and Fauna Unit were investigating alleged abuse of gold by senior officials at FPR.
Zimbabwe’s export incentives have seen gold deliveries to Fidelity Printers and Refiners r…