Zambia’s gold reserve build-up has dragged following the Government’s indecision to reopen the Kasenseli gold mine and some Challenges to purchasing gold from the Kansanshi mines.
Zambia’s cumulative refined gold reserves in monetary form as of July 2023, stood at United States Dollars USD $114 million when it is expected to be above $200 by this time.
The Central Bank, the Bank of Zambia – BoZ which holds Zambia’s Gold reserves, disclosed to the Zambian Business Times – ZBT – that the bank has this year bought only about US$25 million up to July 2023.
Deputy Governor for Operations Dr. Francis Chipimo noted that regarding gold, there is a need to diversify sources of reserves. “The bank has been buying gold and has this year bought about US$25 million up to July and are around US$114 million in terms of the cost.
He said the gold prices have improved since then so the market value is a little higher. “This also I think has been recognized across governments, so I know that on the government side, they are looking at, how can we better organize critical minerals which are there, and how can we set up a system in which we can bring in the small scale producers in an organized way,” said Chipimo.
He re-emphasized that hat for the central bank to hold gold, it must be a bullion standard, and must demonstrate that it was mined in the right way.
He said this is important purely on the liquidity side because the gold bought now is stored in London and can be traded, and is a strong asset in the country’s reserve.
“So how we mine it, the way that we can show that it has been mined properly will be important, but the government is certainly working on that, we are part of those efforts that have been going on, and hopefully we will be able to structure a way in which can purchase gold.” He remarked.
The Central Bank Deputy Governor was speaking when responding to a question by the Zambian Business Times on what the Central Bank is doing to revive the alternative gold reserve following the recent gold scandal at the KKIA Airport.
The Bank of Zambia BoZ act, BoZ is permitted to hold Gold as part of the country’s international services. In this regard, the Bank purchases Gold to help to build the level of international reserves.
Bank of Zambia Governor Dr. Denny Kalyalya had earlier been challenged to use the current opportunity of locally existing gold to stockpile gold reserves to a size-able value of over $1 billion to have an alternative lever to fall back on in the event of a steep drop in global commodity prices with Zambia still dependent on copper exports accounting for over 70% of total exports.
The Central Bank purchases gold from First Quantum Minerals – FQM’s Kansanshi Mine where the highest amount of gold is expected to be purchased as Kasenseli gold mine remains closed.