By Alois Vinga
THE Reserve Bank of Zimbabwe (RBZ) Wednesday announced a resolution to unbundle the state-run gold buyer Fidelity Printers and Refiners (FPR) and offer a 60% stake of the entity to private players in a bid to increase producers’ compliance levels in gold trade.
In an update, RBZ announced that at its meeting of December 9 2020, the board of directors resolved to unbundle FPR into two business entities that are gold refining and printing and minting following valuations of the subsidiaries undertaken by independent valuers.
A resolution was also reached to dispose of Tuli Coal Mine in Beitbridge in order to fulfill the bank’s long held desire to sell its entire equity in the struggling asset, which is capable of predominantly producing thermal coal
“The unbundling of FPR is designed to partially privatise the gold refining business by allowing private players to acquire stake therein and in the process secure and endear the private sector’s interests in the production and marketing of gold in Zimbabwe,” said RBZ governor John Mangudya.
The central bank expects that the gold producers’ compliance levels in the trading of gold will significantly increase after the bank disposes its stake.
“Accordingly, the bank shall retain 40 % shareholding in FPR and dispose of 60% shareholding to both the large and small-scale gold producers,” said Mangudya.
Under the proposed arrangement to be applied on a three-year average delivery of gold to FPR, the bank will offer 50% shareholding in FPR to the large scale gold producers, 3% to major FPR gold buying gold buying agents and the balance of 7% to the small-scale producers through their representatives’ bodies.
However, the bank announced it shall continue to have 100 % equity in the printing and minting business for national security reasons.