HomeBusinessFalgold posts profit as govt/RBZ conflict rages

Falgold posts profit as govt/RBZ conflict rages

Ngoni Chanakira

ZIMBABWE’S gold production continues to decrease due to conflicting government and Reserve Bank of Zimbabwe policies, says Falcon Gold Zimbabwe Ltd (Falgold).



ace=”Verdana, Arial, Helvetica, sans-serif”>However, despite the mining company’s gold production declining by 218kg during the period under review, the firm last year made a profit of $1,42 billion.


In its latest report for the period ending December 31 Falgold said gold producers were being prejudiced by the different payment schemes available.


The Falgold group last year produced 696kg (22 378 ounces) of gold from 1,275 million tonnes treated under what it terms the most difficult circumstances.


Falgold, listed on the Zimbabwe Stock Exchange, comprises Dalny Mine, Venice Mine and Golden Quarry and Camperdown Tribute.


The mining company said both Dalny dump and underground continued to operate smoothly and production was on target.


“Golden Quarry underground and the Camperdown open pit also produced to budget under these difficult circumstances,” Falgold said.


It said this production created a profit of $1,42 billion which was the result of government moving the fixed exchange rate from $55 to $824 to the United States dollar.


“This, with the Reserve Bank increasing the foreign currency allocated to the gold mining groups from 40% of the United States dollars earned to 50%, has resulted in the improved purchase of mining supplies so necessary to maintain our production,” Falgold said.


“However, this 50% is still not sufficient to create conditions to expand mining operations and exploration for real growth. Gold producers are being prejudiced by (a) not receiving the higher dual rate, currently $60 million per kg given to small-scale workers, against ours at $10,597 million per kg and (b) by not receiving our foreign currency for gold deposits timeously, having been approximately two months in arrears. These factors will continue to retard the progress of major gold mining producers in Zimbabwe.”


Falgold said gold production in the group and in Zimbabwe was “continuing to decrease due to these policies”.


The mining firm’s gold production declined by 218kg for 2003 due to the shrinking ore and dump reserves.


“This reduction in output is caused by the Reserve Bank’s gold price and exchange rate policy, which results in an unfair reduced gold revenue,” Falgold said. “The dual gold payment system where small-scale producers receive $28 000 per gramme (currently $60 000 per gramme) against ours currently at $10 597 per gramme.”


The international gold price last year averaged US$349 per ounce, up from US$299 the previous year.

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