adminZIMBABWE is losing an estimated $180 million worth of gold annually through smuggling into neighbouring countries, Fidelity Printers and Refiners (FPR), has said.
The country realises about $60 million monthly from gold sales. Some stakeholders in the gold mining sector have, however, suggested that the country could be losing over 60 percent of its total gold output.
In an interview on Friday last week, Fidelity Printers and Refineries acting chief executive officer Mr Fradreck Kunaka said trafficking of gold was mainly due to “perceived unfavourable” prices offered locally, among other factors.
Mr Kunaka said an estimated 200 kgs of gold were being smuggled out of the country, against a monthly average of 600kgs gold deliveries by small scale miners. Small scale miners, who produce the largest proportion of the country’s gold are said to be the biggest culprits in smuggling of gold.
“Assuming that the peak gold contribution from small scale and artisanal miners of 10 tonnes achieved in 2004 is being achieved to date, it means the smuggled gold ranges between 200 to 300 kgs per month given that currently the sector delivers around 600 kgs per month.
“Smuggling remains a fact due to varied motivators for such practices which range from perceived unfavourable gold prices, evasion of tax payments and ease of movement of value for investments in other jurisdiction and repatriation of dividends though illegal,” he said.
Mr Kunaka identified gold elution plants as the major sources of smuggled gold and said tight monitoring of the plants would help reduce leakages. He also called on the revision of taxes and statutory fees as a way of making mining a sustainable venture and curb smuggling of gold.
“The efforts are bearing fruits given the surge in deliveries from an average 250 kgs per month in 2014 and before to the monthly average of 575 kgs for the period January to September 2015. Fidelity Printers also advocates on behalf of miners for reviews of various taxes and statutory fees to ensure sustainability of mining operations,” he said.
Several suspected gold dealers have been arrested this year after attempting to smuggle significant amounts of gold into neighbouring Botswana through the Plumtree border post. According to sources, the precious mineral will be destined for South Africa but smugglers prefer trafficking via Botswana due to the perceived laxity of security at the Plumtree border post.
About 57,1 kgs of gold with an estimated market value of $2million was recovered from suspected smugglers at Plumtree border post in a space of a month. The arrested smugglers have since appeared in court.
“Producers of gold and barons have financed the purchase of gold illegally which is then smuggled to South Africa where the prices are better.
Buyers in South Africa actually offer a five percent incentive on top of the lucrative prices that they offer.
“This gold is then shipped to Switzerland as an export,” said the source.
Deputy Minister of Mines and Mining Development Engineer Fred Moyo noted with concern the increase in gold smuggling cases and said more needed to be done to plug the leakages of the mineral through the country’s border posts.
“The increased smuggling activity must obviously worry us. We will continue to engage all stakeholders to see how best we can contain those leakages. Our people must also be responsible and know how the country will be affected if its minerals are smuggled out,” he said.
Engineer Moyo also attributed the increase in smuggling of gold to the weakening of the South African Rand, which he said made the prices across the Limpopo appear more attractive than what is being offered locally. Zimbabwe Environmental Law Association economic governance officer Mr Mukasiri Sibanda said mineral leakages could only be plugged by addressing the root cause of the problem.
Mr Sibanda identified the multiplicity nature of the country’s laws and agencies as affecting the administrative capacity of small scale miners.
“One has to deal with Zimra, EMA, and several other Government agencies for them to do business. Such a multiplicity of agencies does not make it easy for small scale miners to do business. We should streamline our laws in a manner that allows ease of doing business, not only for foreign investors but even for locals. As long as there is no ease of doing business smuggling will continue,” he said.
Zimbabwe Miners Federation national technical advisor Mr Marufu Sithole said Government should decriminalise artisanal gold mining as a way of reducing smuggling of the mineral.
“The decriminalisation of artisanal gold miners must be put in place in order to ring fence the smugglers. We must protect the artisanal miners so that they expose the smugglers, if not protected the gold smugglers will continue having a playfield,” he said.
Gold output in the country is expected to rise this year to 18.4 tonnes, the highest level in 11 years. Chamber of Mines Zimbabwe has attributed the forecasted rise to increased production by small-scale miners.
The country’s gold production is expected to increase to 18.4 tonnes this year from 15.3 tonnes last year. This year’s output would be the highest since 2004 when Zimbabwe produced 21.3 tonnes. Gold is the second largest mineral export earner after platinum in Zimbabwe.
Online Reporter