Zimbabwe loses billions to SA gold buyers

ZIMBABWE is losing billions of dollars worth of gold to South African buyers who are offering local small scale miners high prices for the yellow metal, Parliament heard on Monday.

Officials from the Zimbabwe Miners Federation (ZMF) and the Zimbabwe Artisanal Small Scale Miners Council (ZASMC) told the Parliamentary Portfolio Committee on Mines and Energy that no amount of harassment and arrests by the police would make them sell their gold through official channels.

Gold production by small scale miners has slumped from a peak of 17 tonnes in 2004 to about 959 kilogrammes in 2013 although the number of miners continues to grow. The figures suggest the bulk of the yellow metal is finding its way into the black market where prices are lucrative.

There are over 30 000 registered small scale miners and an estimated 1,5 million artisanal miners (commonly referred to as Makorokoza) in the country.

ZAMSC board member responsible for legal affairs Mr Paul Mangwana told the committee that the government was not doing anything to assist the miners but came at the end of the production cycle demanding to buy the bullion at low prices.

"The reality we must address is to ask Fidelity Printers for competitive prices and all the gold will go to Fidelity," Mangwana said.

"No amount of arrests or policing will cure this issue."

Fidelity Printers is a subsidiary of the Reserve Bank of Zimbabwe which is the only institution allowed to buy and process gold in the country.

Mr Mangwana said miners faced too much red tape, punitive fees from a number of government Ministries and departments due to the uncoordinated approach in which the sector was governed.

"There are 22 Acts of Parliament affecting a single miner. You actually need a lawyer to comply," he said, adding that most miners did not understand the laws which resulted in them fighting unending battles with law enforcers.

Ministries and departments charging miners various fees include those of Water Development and Mines and Mining Development, the Environmental Management Agency, the Parks and Wildlife Management Authority of Zimbabwe and Rural District Councils.

ZASMC member Mr Johnson Mudzingwa said given the hurdles which miners faced to raise funding to register, buy equipment and eventually commence operations without government support, it was unfair for the government to direct them to sell the bullion to Fidelity at uncompetitive prices.

"It does not make sense for us to sell to Fidelity.

"We are losing tonnes and tonnes going to South Africa where dealers buy at five percent above the prevailing world prices.

"Local miners take the risks to go and sell there as a result we are building South African instead of building Zimbabwe," he said.

ZMF president Mr Trynos Nkomo said it was critical that Fidelity Printers opened many gold buying centres closer to where the mineral was mined as travel costs promoted the black market.

Mr Nkomo said it was high time the government demystified gold as the secretiveness around its production encouraged leakages.

"When gold leaks, it does not leak in grammes, it is externalised in huge quantities," he said.

The miners said the government should partner them in gold production through offering loans or coming up with other schemes which encourage productivity. - New Ziana