Fidelity Gold Refinery general manager Peter Magaramombe has revealed that his company has put in place a fund they are using to buy gold from both artisanal and large-scale miners, while avoiding borrowing expensive funds from the local institutions.
Local financial institutions have, over the years, come under fire for making it nearly impossible for companies and organisations to borrow. Most of the institutions are also reluctant to give long-term loans due to speculative issues.
These situations create a lot of challenges for organisations that will be seeking to recapitalise or retool.
Addressing the Parliamentary Public Accounts Committee during their fact-finding visit, Magaramombe indicated that Fidelity is committed to supporting the gold mining sector.
‘’…then maybe let me talk about some of the challenges that we’re facing as an institution. One, we are talking about the gold price volatility, the unpredictable movement of gold prices on the international market.
‘’Then another challenge is to do with the high cost of borrowing from our local financial institutions. Some of the funds that we are borrowing, they’re quite expensive.
‘’Most of the funds that we use to buy our gold, some of them we borrow them. So what we’ve done is that we’ve put in place a fund, a fund that we own as Fidelity Refinery that we use to buy the gold.
‘’So in terms of the fund, if you compare borrowing and using our own fund you find that in terms of our fund that we have it constitutes about 65% of the funds we use to buy gold,’’ he said.
Meanwhile, Magaramombe has revealed that his organisation is devising various strategies that will benefit all the stakeholders in the gold sector.
‘’We are committed as Fidelity Gold Refinery to support the gold sector through various strategies, such as access to low cost funding, and the formalisation of artisanal miners.
‘’We believe that by working together, we can create a thriving and sustainable mining industry that benefits all stakeholders,’’ he said..
