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Zim seeks to rejoin London Bullion Market as production rises

24th January 2014

By: Bloomberg

  

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Zimbabwe is seeking readmis-sion to the London Bullion Market Association (LBMA) after changes in regulations allowed gold producers to increase output.

It is “realistic” that the country be included on the LBMA’s delivery list, says Ian Saunders, chairperson of gold producers at the nation’s Chamber of Mines.

Zimbabwe produced 14 t of gold in 2013, exceeding the 10 t threshold for LBMA entry.

Readmission to the London market, the biggest centre for gold trading, according to the LBMA, will increase Zimbabwe’s ability to sell to global buyers.

The country dropped out of the organisation in 2008 after production had slumped as a result of electricity and chemicals shortages and delayed payments from the central bank, which bought all the metal produced locally.

Producers are now permitted to sell their gold independently, allowing them to be paid directly in US dollars. Companies have also started importing their own power, which means mining operations face fewer disruptions.

Output remains half what it was in the late 1990s. Zimbabwe, ruled by President Robert Mugabe since 1980, produced 27.7 t of gold in 1999, according to the US Geological Survey.

Edited by Bloomberg

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