Gold lost through informal channels: Minister


ZIMBABWE is producing close to 100 tonnes of gold, but the bulk of that is being lost to the black market as small-scale miners, who are the main producers in the country, shun official channels, a government official has said.

Mines deputy minister Polite Kambamura told leaders of the Zimbabwe Miners Federation at a meeting in Harare yesterday that a lot of gold was being lost through informal channels.

Last year, deliveries to the sole buyer of gold, Fidelity Printers and Refinery (FPR), amounted to 33,4 tonnes.

“The bad news is that for February, after the Reserve Bank of Zimbabwe (RBZ) announced the monetary policy, we have received only 20kg, which means there is a problem there.
What we want is to mobilise and redirect gold to small-scale miners. We feel with the current challenges, we are losing gold to other markets. I am very convinced that we are already at 100 tonnes, but we are losing more gold to under-declaration and smuggling. We are losing gold to the other market due to some grievances,” Kambamura said.

The miners who attended the event said the central bank did not consult before pegging the United States dollar retention threshold at 55%.

According to the miners, the central bank was responsible for low bullion deliveries as it had failed to come up with robust ways to handle the buying of gold.

“Why does the government not open up to other players to buy gold from miners because FPR is the sole refiner and buyer of gold in the field? We understand that there are some agents who FPR are paying 90% in USD and then us, as small-scale miners, are getting a raw deal. How can a middleman get 90% in USD and yet us major producers of gold, are given a raw deal of 55% in USD and the rest in RTGS dollars”.

“So we strongly feel (that) in order to curb the loopholes, there are some elements in FPR that we feel have over stayed their mandates. The same people are sitting on boards at RBZ, FPR and Aurex. They are responsible for the buying of gold in FPR and allocation of funds, and at the end of the period, they can manipulate the whole system. We strongly feel that these people are working with gold barons, hence they are coming up with such policies that are negatively impacting the small-scale miners. If the composition of these boards does not include the primary producers, I don’t think we are heading anywhere,” said one miner.

Sasha Gomez, a gold buyer who attended the meeting, said the RBZ should pay at least 90% of the gold delivered in USD to cut out foreign buyers who pay in hard currency.

Another miner Tobias Kadenhe weighed in saying the current forex retention threshold by the central bank did not factor in costs incurred during the mining process.

“The RBZ did not come to us to consult before putting that threshold. Did you calculate the cost of producing a gramme of gold when you came up with the 55% retention threshold? We want clarity on that,” he said.

Chris Hukama from Hurungwe Kariba Association said gold deliveries would remain low until authorities recognised the small-scale miners as the primary producers of gold.

“The governor said he has consulted all stakeholders, but the small-scale miners were not consulted. We have become as small-scale miners the primary producers of gold, meaning that we need recognition. A miner submits his requirement and FPR tells you who to sell to. Our economy is in a volatile situation; you can’t plan for three years in advance and yet the gold initiative fund takes years to supply the equipment we have applied for and this will eat into our planning and finances. And hence what the minister has said that up to now they only got 20kg. It is as a result of the negative attitude by RBZ towards the small-scale miners. We can’t run away from that fact. Until and unless you recognise our importance into this industry, you will get the amount of gold that you want. You must treat us fairly,” Hukama said.

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