Exorcising the ‘curse’ of gold smuggling in Zimbabwe

Prosper Ndlovu / Sukulwenkosi Dube
ZIMBABWE is losing a lot of revenue through the smuggling of a variety of goods and minerals, mainly gold, at its “porous” borders. Cases of gold smuggling at the Beitbridge and Plumtree Border posts remain high as evidenced by the regular seizure of the yellow metal by customs officials and the police.

Home Affairs Deputy Minister Obedingwa Mguni, who is also the National House of Assembly member for Mangwe Constituency, acknowledges the need to tighten security at border posts as well as securing the border lines as part of a broader strategy to plug loopholes.

He said culprits were taking advantage of loopholes at the border posts to smuggle minerals.

Mguni noted that while all the gold smuggling cases had been recorded at the borders, there was a possibility the smuggled mineral was passing through illegal crossing points without being detected.

“The government is losing a lot of revenue through these smuggled goods. A cause for concern is that a lot of minerals are being smuggled especially gold. This means that the country is losing a lot of money as a result of the activities of smugglers.

“These minerals are crucial to us as they are part of our heritage. However, it appears that other countries are benefiting at our expense. This has to come to an end,” he said.

Mguni said there was a need for police from the minerals border control unit to be effectively equipped for them to intercept potential smugglers.

Figures from the Ministry of Mines and Mining Development reveal that the country has recovered gold and diamonds worth $2,4 million from unlicensed dealers in the 11 months from October to August this year.

Many view these reported cases with suspicion. They believe many smuggling activities go undetected at the country’s porous ports of entry.

“The situation at our borders is worrying. We’re losing a lot of revenue through smuggling. The government needs the revenue to help it sustain some of the developmental projects. Our challenge is that the criminals have become so sophisticated. They’re always coming up with strategies of beating the system all the time. The trend has become so common that the incidents are now regarded “normal” and a daily routine,” noted a small-scale miner, Njabulo Mdlongwa.

Police under the Border Control and Minerals Unit recently arrested a suspected smuggler, James Ray Tudhope from Kwekwe, at the Plumtree Border Post. Tudhope was caught while trying to smuggle 28,5kg of gold worth about $1 million. The mineral was hidden in a secret compartment in his vehicle’s loading box.

Within a space of weeks five similar cases involving smuggled gold valued at amounts ranging from $200,000 to $500,000, were reported at the same border.

Officer commanding Bulilima-Mangwe District, Chief Superintendent Gideon Zulu, said gold smuggling activities were rife at the Plumtree border.

“A total of 64 kilogrammes of gold were intercepted at the border in less than five months while being smuggled into Botswana. The law enforcement agencies are, however, making great strides in apprehending the culprits,” he said.

Chief Supt Zulu said all cases of gold smuggling had been recorded at the official crossing point.

Drivers conceal the mineral in their vehicles and travel to Botswana under the pretext of going to do some shopping.

“Other smuggling activities involving other goods are being conducted along the border line. We’re, however, struggling to patrol all areas as the border line is inaccessible by road,” said Chief Supt Zulu.

Plumtree Border Post Zimra Station Manager, Leonard Samembere, listed fuel, electrical gadgets as well as other protected goods as some of the major items smuggled into the country.

He said most of the smugglers lived close to the border line which makes it difficult for culprits to be apprehended.

No official report has, however, been released to date on how much the country has lost each year through smuggling.

It is suspected that the country could have lost millions of dollars to gold smuggling syndicates.

South Africa and Botswana are the main destinations of the smuggled metal.

While the police deserve credit for their vigilance in bringing some of the criminals to book, the smuggling scourge appears to be getting worse. It is becoming bigger, much more coordinated and sophisticated.

Gold is one of the critical mineral resources found in Zimbabwe with the sub-sector employing thousands of workers.

Official statistics indicate that close to 500,000 people mainly in Matabeleland North and South and Midlands derive their livelihood from small-scale and artisanal gold mining.

Several local and foreign listed companies are also operating in the gold industry.

“It’s ironic that the country continues to lose critical proceeds from this precious resource when it’s in dire need of funds to boost economic growth. People continue to buy and sell gold on the illegal market with no benefit to the government,” noted a Ministry of Mines and Mining Development official.

The record $1 million gold haul case has unsettled Parliament and prompted legislators to ask Finance Minister, Patrick Chinamasa, to clarify measures being put in place to plug the holes at the borders. The government wants dealers to sell their gold locally to Fidelity Printers and Refiners, a subsidiary of the Reserve Bank of Zimbabwe (RBZ).

However, some dealers have been resisting the government directive.

“What we’ve done is that we’ve raised the gold prices. Our prices are now the same as those offered at the London Bullion Market. There’s no incentive for people to sell gold illegally.

“Secondly, we’ve cut down the royalty when we buy gold especially gold that we buy from artisanal miners. It was five percent and we’ve reduced it to three percent and now it’s one percent,” said the minister.

Fidelity is buying gold at a price of about $34.50 per gramme.

Chinamasa said the increase in arrests involving smuggling is a result of a joint effort of a new committee comprising of Reserve Bank of Zimbabwe workers, Ministry of Mines and Mining Development and the police.

He said the committee has increased its surveillance on those taking gold outside the country, miners and exporters of the mineral.

“Investigations are going on, that’s why you see that there are a lot of people who’re being caught at our borders trying to smuggle gold outside the country,” said Chinamasa.

In addition to installing machinery to detect any illegal mineral outflows, the use of whistle blowers has proved to be equally handy, the minister said.

The Zimbabwe Miners Federation (ZMF) blamed several individuals who have metal detectors for fuelling gold smuggling. The individuals extract a lot of gold without permits. Such individuals, it says, are scared to take their produce to Fidelity Printers and Refineries for fear of prosecution.

“The country’s laws prohibit individuals without mining licences to deal in gold,” Chinamasa said.

In his mid-term monetary policy review statement, Central Bank governor, John Mangudya, stressed the need to decriminalise gold possession in favour of engagement on norms and practices of responsible gold trading.

ZMF immediate past president, Trynos Nkomo, says the long-term answer lies in robust domestic mineral value addition and beneficiation.

He believes the people involved in gold smuggling are “big” individuals who carry large quantities of the metal and not small-scale miners.

“Dealing with this issue requires the full participation of the government in gold production. The government should incentivise mining operations and miners and dealers will extend their loyalty to it as a partner. There’s a need to boost processing of all minerals locally as well.

“This is because several groups of metals like platinum contain gold but since they’re processed outside the country we lose in that way. Fidelity pricing isn’t bad, however, the government needs to work more closely with the miners,” said Nkomo.

Kwekwe Central legislator, Masango Matambanadzo, says instead of a centralised gold buying system, the government should empower locals to buy the mineral in their constituencies.

“The illegal market has enough to give to these secret buyers and miners take the money. This is sabotage from the enemies of the State. We’ve given people licences but nobody has been given a cent to buy gold. We advise the government to finance these licensed holders so that they can buy gold and take it to Fidelity Printers to curb the smuggling,” he said. Fidelity Printers is the only authorised exporter of gold in Zimbabwe.

In the last few years the government decriminalised artisanal mining operations as part of its empowerment thrust aimed at increasing output.

In the first six months of 2015, artisanal miners delivered three tonnes of gold compared to 900 kgs in the same period last year.

This year Zimbabwe targets to deliver up to 16 tonnes of gold to Fidelity.