Story by Stanley James, Business Editor
ZIMBABWE is building up gold reserves to support the local currency and trade amid revelations that the Reserve Bank now holds over 360kgs of the commodity from mining royalties.
The move comes after the Reserve Bank of Zimbabwe earlier this year directed gold miners to pay half of the royalties in the form of physical gold with the other half being paid in cash to the Zimbabwe Revenue Authority.
Responding to written inquiries from the ZBC News, RBZ Governor Dr John Mangudya revealed that after the introduction of the royalty payment arrangement, gold reserves are now at over 360 kilogrammes.
University of Zimbabwe Lecturer, Dr Nyasha Kaseke says payment of half royalties for gold in kind reflects the government’s commitment to build more reserves towards backing the local currency and meeting external loan payment obligations.
“Such an arrangement is not new, but many other developed countries also practice such a similar trend, the notable advantage is in backing the local currency to remain stable as well as enabling the Government to sustain global payments,” said Dr Kaseke.
Deputy Minister of Mines and Mining Development, Honourable Polite Kambamura explained the importance of increasing gold mining operations in building gold reserves.
“Several measures are also being put in place to ensure that there is increased gold production, for instance, a gold revolving loan facility at concessionary rates is in motion, while the decentralisation of gold buying facilities will further boost royalties,” said Honourable Kambamura.
Apart from gold, platinum, diamond, and lithium, miners are also being compelled by law to pay half of the royalties in the related mineral physical form.
A global mining journal defines royalties as a tax on volumes of minerals produced and are due to the owner of the mineral rights.
