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BoZ starts gold accumulation in quest to bolster reserves

THE Bank of Zambia (BoZ) has commenced accumulation of gold as part of the official international reserves assets following the purchase of 47 kilogrammes of Dore gold from Zambia Gold Company Limited.

In a statement, Tuesday, the BoZ announced that following its formal commencement of gold purchases, it was now expecting Kansanshi Mining Company Plc, the First Quantum Minerals (FQM) subsidiary, to also start supplying the central bank with gold bullion during this quarter to bolster its reserves.

“…The Bank is also expecting Kansanshi Mine to supply gold bullion within the first quarter of 2021. The local purchase of gold follows the signing, on December 11, 2020, of the Gold Purchase Agreement with Zambia Gold Company Limited and Kansanshi Mine. Gold purchases is a strategic decision made by the Bank to broaden the composition and diversification of international reserves portfolio. The addition of gold as a reserve asset will augment the country’s international reserves. Reserves are an essential part of the Bank’s toolkit in providing protection against adverse economic shocks, and in achieving the monetary policy objectives of price and financial system stability,” stated BoZ.

“Purchasing gold locally using local currency provides a sustainable avenue of international reserves accumulation, provides a long-term store of value, and further enhances investor confidence. It also provides the necessary liquidity for the Bank’s foreign market operations. This is consistent with the broad objectives of government’s Economic Recovery Programme (ERP), which was launched on December 7, 2020.”

Zambia’s burgeoning gold market is gathering momentum, especially after the establishment of the state-of-the art US $250,000 Consolidated Gold Company laboratory in Lusaka last year, designed to ascertain the quantity and quality of gold mineral held by local traders.

ZCCM-IH, who have a projected national target of 40,000Kgs of gold, pegged its starting offer price for gold from the local market at a competitive price of K550 per gramme.

Kansanshi’s 2020 gold output is projected at nearly 3,700Kgs, the highest out of all of FQM’s other gold-producing mine sites globally, making Zambia an outstanding gold investment destination and potentially lucrative market.

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