(3 minutes read)
· The Bank of Zambia (BOZ) purchased about 283 kilograms of gold since December 2020 at a cost of about US$16 million. Of that, 196 kilograms were from FQMs Kansanshi Copper Mining entailing a cost of K242 million
· Close to 87 kilograms were purchased from ZCCM IH owned Zambia Gold Company at a cost of K104 million
· The Bank intends to purchase around 25,200 ounces of London Good Delivery gold from Kansanshi Copper Mining Plc per year
· It will source 21,000 ounces of dore gold with a minimum of 88% purity from Zambia Gold Company annually
The Bank of Zambia (BOZ) purchased about 283 kilograms of gold since December 2020 at a cost of about US$16 million. Of that, 196 kilograms were from FQMs Kansanshi Copper Mining entailing a cost of K242 million. Close to 87 kilograms were purchased from ZCCM IH owned Zambia Gold Company at a cost of K104 million.
The Bank intends to purchase around 25,200 ounces of London Good Delivery gold from Kansanshi Copper Mining Plc per year. It will source 21,000 ounces of dore gold with a minimum of 88% purity from Zambia Gold Company annually. Towards this, the bak has signed gold purchase agreements with Kansanshi Copper Mining and Zambia Gold Company in December 2020. The advantage to the bank is that the gold is purchased in local currency, though the price is not fixed up as it is determined by the London Bullion Market Association – LBMA. Kansanshi Mining in 2020 produced gold valued over US$200 million.
Zambia is trying to build up gold reserves worth billions of US dollars, which can be leveraged to arrest the perpetual Kwacha (domestic currency) depreciation which contributed to economic challenges in the country. Depreciation of the domestic currency is said to be the major reason for prevailing inflation in the country. Lower value of Kwacha also leads to increase in debt service of the country. Higher gold reserves can help the country to use it as a defense against depreciating Kwacha and to insulate the country from other economic instabilities like high inflation, deteriorating foreign exchange reserves etc.
