Gold smuggling syndicates exposed

A new report has illustrated the depth of the gold smuggling scourge in Zimbabwe, estimating that over 70% of the country's output has found its way into backstage international markets.

Titled, 'Illicit Gold Markets in East and Southern Africa', the Global Initiative Against Transnational Organised Crime's report said the 10% to 30% of authorised buyers still selling bullion to the state-run Fidelity Printers and Refiners (FPR) were only doing so to keep their licences.

Global Initiative estimated that about 50% of Zimbabwe's estimated 1,5 million artisanal and small-scale gold miners (ASGM) have been spiriting away the yellow metal.

The scale of the losses becomes apparent after considering that these miners produce about half of the gold traded in Zimbabwe annually, after a bloodbath in big gold mines since the turn of the century.

"Smuggling is rife," Global Initiative said in the report.

"Gold buyers revealed in interviews that they were selling between 10 and 30% of their gold to the FPR only to maintain their gold licences, with the rest being sold on the illicit market.

"Major foreign buyers, often from South Africa, partner with Zimbabwean dealers to buy large quantities of gold on the illicit market.

"While Bulawayo's reach is limited to gold mined in areas close to the town, Harare attracts gold from across the country.

"Bulawayo buyers are generally less well-resourced and lack the US dollar buying power of their Harare competitors."

The report added: "Miners or buyers may also take gold directly to South Africa, especially from Matabeleland province in the south.

"Nearly 40% of gold mined in Matabeleland is believed to be smuggled directly to South Africa."

Global Initiative made startling revelations that the official crossing point, Beitbridge border post, handles more contraband than all illegal crossing points into South Africa, where markets in Johannesburg are the biggest recipients.

The United Arab Emirates, China, India and Russia have been reported to be among the biggest destinations of Zimbabwe's gold.

In 2015, the Reserve Bank (RBZ) of Zimbabwe also said Beitbridge had turned into the hotspot for smuggled gold.

"The ease with which it can be moved over the border makes it difficult to catch smugglers," the central bank said.

"It is reported that a smuggler will only be caught if the police have received a tipoff but they can easily pay a bribe to allow them to continue across the border."

Global Initiative gave graphic details of a complex smuggling networks involving Sadc countries where Zimbabwean gold is shipped through before ending up in Johannesburg,
among political elites and powerful dealers at the centre of the vice.

"There are also small gold flows between Zimbabwe and Mozambique in border regions, but the direction of the flows is unclear," the report says.

"The involvement of foreign buyers has increased official gold deliveries, but is also believed to be fuelling illicit trade.

"If 17,5 tonnes, the official small-scale gold production figure in 2019, only accounted for this small share of actual ASGM production, it means that billions of dollars worth of gold is being lost to the illicit market annually."