Zimbabwe sells gold refinery Fidelity Printers and Refiners for US$49m

ZIMBABWE – A total of ten companies will take control of Zimbabwe’s privatized gold refinery, Fidelity Printers and Refiners (FPR), for US$49 million, the country’s Finance minister Mthuli Ncube has said, reports Newsday.

This will be the first time that the refinery will be in private hands since it was established in 1988.

The sale, first announced in December 2020, will see the new shareholders owning 60% of Fidelity Printers and Refiners, while the Reserve Bank of Zimbabwe (RBZ) retains the remaining 40%.

“The process of partial privatization of Fidelity Printers and Refiners will be through offering 60% of its shareholding in the gold refinery business to producers of gold. The central bank will remain with 40% in the gold refinery company and 100% in the printing, minting and gold financing business. Ten shareholders have so far accepted to take shareholding in Fidelity Gold Refinery at a total consideration of US$49 million,” Ncube told Parliament.

However, the minister did not name the shareholders.

Under the ownership structure announced in 2020, companies will take shareholding based on the average quantity of gold delivered to Fidelity over the previous three years.

Large-scale miners will hold 50% shareholding, while 3% will go to gold buying agents and the remaining 7% to the small-scale producers through their representative bodies.

Among the country’s largest gold producers are Kuvimba, which controls Freda Rebecca, Shamva and other mines, Caledonia Mining, which runs Blanket, and RioZim, which owns three gold mines.

“The process of partial privatization of Fidelity Printers and Refiners will be through offering 60% of its shareholding in the gold refinery business to producers of gold

Mthuli Ncube – Finance Minister, Zimbabwe

Kuvimba’s biggest mine, Freda, produced 2.7 tonnes in 2020, Blanket Mine produced 1.6 tonnes while output at RioZim was 1.21 tonnes for 2020.

The privatization of FPR came after lobbying from some players in the mining business and follows the model of Rand Refinery, South Africa’s biggest refinery, which is owned by the five largest gold miners AngloGold Ashanti, Gold Fields, Harmony, Sibanye Gold and DRDGOLD.

The privatization will create fresh controversy over the ownership of mining assets, given the leading role that Kuvimba, whose shareholding structure has been subject to public scrutiny, is likely to play due to its commanding output.

FPR started refining gold in 1988, and at its peak producers from abroad sent in their gold for refining at its Msasa refinery in Harare. However, FPR has not used most of its installed capacity to refine 50 tonnes of gold per year, and its new owners will have to invest substantially in retooling.

The company, which buys gold from miners from at least a dozen centers around the country, has struggled to pay miners on time for gold deliveries, pushing miners to call for its privatization.

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