Friday, May 30, 2008

RBZ hikes gold support price 628%

By: Oscar Nkala

The Reserve Bank of Zim-babwe (RBZ) has raised the gold support price from Z$700-million a gram to at least Z$5,1-billion a gram, in response to an outcry by small- and large-scale miners alike.

A senior RBZ official, speaking on condition of anonymity, and miner representative organisa- tions have confirmed that the new price, which translates into a 628% increase, was agreed on at a meeting held between gold-miners and the central bank last week.

“The move is aimed at offering a price as close to [that on] inter-national markets as possible. The new price was calculated at prevailing markets rates, which, on the day the agreement was reached, stood at US$980/oz.

“It was also agreed that the percentage of the cost which the bank pays in local currency would no longer be fixed but would be deter- mined by the day’s interbank rates,” the RBZ official says.

He says that, in raising the price, the RBZ wants to stop gold- miners from trading the commodity on the parallel market, where prices are almost three times higher than those gazetted by the State.

Zimbabwe Miners’ Federa- tion CEO Wellington Takavarasha has confirmed the agreement on new prices.

“It was an amicable agreement guided by the harsh operational reality we face in the light of hyper-inflation. We also discussed how the bank can move in to snuff out the parallel gold dealing market, which, we are sure, is still strong enough to survive and prosper.

“In the light of this, we call on all those miners dealing on the parallel market to return to official channels,” Takavarasha tells Mining Weekly. He says small-scale gold-miners are also happy with the liberalised exchange rate, adding that it will allow miners to make profits and buy up-to-date equipment to enhance production.

No comment has been forthcoming from the Chamber of Mines, which was also part of the price review negotiations. The RBZ has identified the trading of gold on the parallel market and gold smuggling as some of the major factors behind a steep decrease in gold output delivered to its refinery.


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