Zimbabwe's central bank is ceding a controlling stake in the country's sole gold buyer and refiner, Fidelity Printers & Refiners, in an effort to boost compliance levels in the trading of gold.
Authorities say at least US$100 million worth of gold is smuggled out of the country every month amid disgruntlement from producers with regards to pricing and payment modalities for gold delivered to Fidelity.
Delays in the payment of gold deliveries have in the past led to temporary mine closures by some of the country's biggest gold producers, such as RioZim.
Fidelity, which is also responsible for printing and minting Zimbabwe's local currency, will however have to be split into two before the gold buying and refining side of the business is sold.
Once split, the Reserve Bank of Zimbabwe will cede a 60% stake of the gold buying and refining business to miners, a model similar to the Rand Refinery - South Africa’s biggest refinery - which is owned by some of the country's biggest gold miners.
The Bank said the unbundling of Fidelity was designed to partially privatise the gold refining business by allowing private players to acquire a stake, in the process securing the private sector's interests in the production and marketing of gold in Zimbabwe.
"By being part of the decision-making process on gold trading, it is expected that the gold producers’ compliance levels in the trading of gold will significantly increase," it said in a statement earlier in the week.
"Accordingly, the Bank shall retain 40% shareholding in FPR and dispose of 60% shareholding to both the large-scale and small-scale gold producers."
Based on the average quantity of gold delivered to FPR over the past three years, large-scale miners will hold a 50% shareholding in FPR, while 3% will go to gold buying agents and the remaining 7% to the small-scale producers through their representative bodies.