Africa’s second largest copper producer, Zambia has stepped up its bullion oversight in a quest to shore up the nations falling strategic reserves. Grappling with falling foreign exchange reserves to a decade low of $1.4 billion, exposing the copper producing economy to stress shocks, the need to use gold as a buffer has increased to help improve the nations weak import cover as the yellow metal is globally acceptable store of value as safe haven due to its immunity to market volatilities.
In a statement by Mining Investment Vehicle ZCCM-IH Chief Executive Officer Mabvuto Chipata, it was established that a mineral trading permit was obtained that licensed the holding company to manage gold buying in strategic centers. Zambia currently has 21 gold hotspots districts. ZCCM-IH is in the process of incorporating a special purpose vehicle that will be tasked with oversight over bullion management in the hotspots.
Mines Permanent Secretary Barnaby Mulenga said the state would be stepping up security measures in these identified spots to curb smuggling which has been on the increase.
The government will focus on Rufunsa, Mwinilunga, Luano, Senga and Mumbwa as key hotspots to aid shore strategic reserves which will be sold to the central bank in Kwacha.
The Red Metal Analyst
