Supply of gold to the Bank of Zambia (BoZ) under the local gold purchase programme by the Zambia Gold Company Limited, a ZCCM IH subsidiary, has been declining month on month since December 2020 affecting the rate of accumulation of reserves.
A check on the month on month confirmed supplies revealed that BoZ initially purchased 47.96 Kgs of dore gold for the December 2020, then purchased a reduced amount of 21.83 Kgs in February 2021, and then a further reduced volume of 17.05Kgs in March from the Zambia gold company limited – ZGCL, showing a month on month decline on volumes purchased.
After taking over the Mine at Kasenseli as well as announcing that they would be purchasing gold from artisanal miners, ZGCL was expected to be a major supplier of gold in Zambia. Currently, FQM’s Kansanshi Mine seems to be a more reliable and stable source of gold for national reserve building.
When contacted by the Zambian Business Times-ZBT to clarify why the company supplies have been on a decline, ZGCL public relations manager Matthews Liyani confirmed that the company’s production had reduced but that this was due to the past rainy season.
Ligali told ZBT that Zambia gold company operations are new and done through open pit mining. “Our production had reduced during the rainy season because we are doing open pit mining,” he said.
He said the company has now put in place measures to ensure production does not reduce in the rainy season going forward. Some of the measures put in place includes stock piling the raw materials to be processed during the rainy season.
He said the company has also purchased two new processing units with the capacity to process 50 to 70 tonnes of raw materials or ore per hour. He revealed that the current processing plant has the capacity to process only 3 tonnes per hour.
“We have recently purchased new processing equipment, which is currently being installed. The current capacity is at 3 tonnes per hour. The two new processing unit we procured have the capacity to process 50-70 tonnes of raw materials per hour each.
“The new processing plant has bigger capacity than the current one, meaning that there will be significant improvement in terms of production. The new plant will be commissioned by next month (August 2021),” Liyani said.
He said in order to increase production, ZGCL working with ZCCM-IH has commenced preliminary mineral exploration activities in Rufunsa, with full exploration starting next month.
“ZGCL owns another small-scale exploration license (25796-HQ-SEL) in Rufunsa. In order to increase production, the company, working hand in hand with the ZCCM-IH, has commenced preliminary mineral exploration activities in Rufunsa, with full exploration starting next month,” Liyani added.
The company’s year-to-date production (YTD) for 2021 is currently at 38,320.78 grams of gold while the gold production from the time mining activities commenced to date is at 115,474.02 grams. The company also buys gold from artisanal miners across the country as a way of supporting them and has so far bought 29,523.31 grams.
Analysts say the Bank of Zambia – BOZ needs to upscaled it’s gold reserves ambitions so that the country can accumulate enough gold reserves to use in stabilizing the local currency, the Kwacha.
Perpetual depreciation of the Kwacha remains to be one of the biggest macro economic challenges Zambia faces. Holding of US dollar reserves supplemented by a big chest of gold reserves is expected to provide a buffer to defend the Kwacha which is the store of value for the vast majority of local citizens.
