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GOVERNOR'S ADDRESS ON THE OCCASION OF THE OFFICIAL OPENING OF THE ZIMBABWE MINT BULAWAYO, 31 AUGUST 2001

On behalf of the Board of the Reserve Bank of Zimbabwe, Fidelity Printers and Refiners and, on my own behalf, a warm welcome to you and, to this - the formal opening of The Zimbabwe Mint.

The Reserve Bank of Zimbabwe has, for many years been an active participant in business, not only in activities related to its immediate mandate, but also in activities relating to the industrial formation of our country.

Yesterday evening, Mr. Roger Holmes, The Deputy Master and, Controller of Royal Mint, of the United Kingdom, initiated much debate and discussion about the origins and, the historical role of money and coinage, in the development of modern society. He also, I might add, shared his view about the future of money and coinage.

What we failed to ask him was "If money is a source of evil", as many people say it is, how come everybody wants more and more of it?" And having had some, how come people never get satisfaction from it? I must confess that neither he nor our very own Eric Bloch could shed light on this riddle. It seems to me, however, that the adage "A penny saved is a penny earned" does still hold true, even in very advanced communities, of the future. Wealth, its generation, and its preservation is, a curse, I am afraid. The more we acquire it, the more we want it and the lower its intrinsic value the more it works for us, - amazing!

From the very early days of our independence, Zimbabwe took a conscious decision to create a conducive macro-economic environment, necessary for the development and advancement of industry, and the creation of wealth. The Bank's participation in industrial activity is in recognition of the need for it to reduce costs, wherever possible, while at the same time fulfilling its mandate.

The production of high quality bank notes, at reasonable cost presented the Bank with its first opportunity to engage in industrial activity. The Bank took a decision then, to transform its printing operations into a wholly owned subsidiary, Fidelity Printers (Private) Limited and, to move its printing operations to the present site in Msasa, some eight kilometers from the centre of Harare. Construction of the building commenced in April 1980 and, was completed at the end of 1981. Because of the work done at Msasa, Zimbabwe is now well known for its very high quality notes.

As always, Your Excellency was supportive and encouraging. You formally opened the new banknote printing works in early 1982.

Our products, besides our very high quality banknotes - such as passports, examination papers, travelers cheques, Commercial Bank cheques, passbooks and a wide range of other security documents - are also now produced, to customer specifications. These products, are produced to international standards for both the domestic and regional markets. The foreign exchange saving, arising from these activities, is impressive.

Over the last decade, significant milestones have included:-

The establishment of a sophisticated design capacity - an activity which had been sourced from abroad and;
The introduction of intaglio plate making - again an activity whichwas previously carried outside Zimbabwe.

In 1987, the Bank established a Refinery on the same site as the Printing works and, changed the name of the company to Fidelity Printers & Refiners. Commercial operations commenced in April 1988 and, accreditation on the London Bullion Market was obtained in October 1989.

Again, your Excellency was there to officially open the new refinery.

Until then, Zimbabwe's gold could only be refined, to internationally accepted standards, outside the country. The foreign exchange savings and, permanent technological transfer, arising from this development, are there for everyone to see.

Rough bullion bars, varying in composition, are received form miners - scattered throughout the country - for refining. The Refinery also processes small deposits from alluvial gold panners and, from other regional gold producers.

Annual production has arisen steadily over the years, to 28 tonnes of gold and, six tones silver, in 1999. The installed capacity of the Zimbabwe gold refinery is about 50 tonnes, of the fine gold, based on a single shift operation. There is, therefore, capacity for refining bullion for other countries besides those we currently serve. This, of course, is an area of great interest to us. We believe we can offer this service at internationally competitive rates.

Gold from other countries is refined for either return to the customer or for sale, on the international market on behalf of the customer. The Refinery produces 400 ozs bars, to international standard and, fine gold for use by the domestic Jewellery Industry. Silver is produced through chemical and electrolytic processes, to meet the very high purity levels required by the Domestic jewellery and plating industries. Refined gold is marketed internationally by the Bank, in good delivery fine bars.

The establishment of this refinery has, therefore, guaranteed the continued viability of Zimbabwe's jewellery industry because silver is now locally available in a very pure form. A nucleus of technical personnel has been developed and, is in place at the Refinery and has embarked on further research development in order to continue further beneficiation and, utilization of Zimbabwe's precious metals.

Development work has also continued over the years, through the acquisition of new technology, to produce new products and value add to our precious metals pool and, now we have established this coin minting facility. This is another example of the Bank's participation in industry, to enable it to discharge its obligation more efficiently by supplying coin at sustainable cost. The Commissioning of this Zimbabwe Mint is therefore, an example of the many other positive developments taking place in our country, which have, unfortunately, tended to be buried under a barrage of negative publicity.

Milestones in security printing, precious metals refining and minting of circulating coins and the production of high quality jewellery at Aurex, for the international market - have been achieved because of foresight executed through strategic partnerships - and know how.

Together with our cooperating partners - at Giesecke and Devrient and, the Bavarian Mint - represented here today by Dr. Schelbusch, we have brought to Zimbabwe state of the art process technology and equipment for note printing - and for coin production. We have gone ahead and built on this and, now have the technical capacity in our people to move ahead and develop our country in a resolute, but meaningful, beneficial and sustainable way.

Downstream industries and suppliers have benefitted in two ways; by supplying inputs to us and by sourcing inputs for their own respective activities from us - and through multipliers, the country has benefited immensely. Indeed, one way of measuring whether development is taking root in a country, is by assessing improvement in social welfare of those benefiting from these efforts. These benefits are there for everyone to see.

Going forward, a major strategic thrust is to ensure that Zimbabwe has the requisite capacity to produce the necessary alloys required by this Mint. Beneficiation of local raw materials will, therefore, continue to be supported in order to create both export capacity and substitution, wherever possible. In fact, this is the next item on our Agenda.

His Excellency, has once again been able to find time to officially open and grace another event in our many activities. Thank you. Your support has given the Bank encouragement to dare and progressively improve the country's industrial capacity in areas of its competence and, to transfer lasting technologies, where such activity has related to its mandate. Be assured that we will continue to do this in a manner that improves the general welfare of our population.

We do this because this is what economic development is all about - to improve the well being, of our people through cumulative creation of wealth in new and, enduring ways, - and to build upon our collective inherited capacities and resources, so that each one of our citizens, year-by-year, progressively becomes economically and socially better off.

THANK YOU VERY MUCH FOR YOUR ATTENTION.

DR. L. TSUMBA

GOVERNOR

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