HomeNewsHow the Zim govt is robbing gold miners

How the Zim govt is robbing gold miners

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AN intricate web of Zimbabwean State firms and agencies are being used as government conduits to buy gold from artisanal miners at a song thereby impoverishing thousands of people who have turned to bullion panning to make a living.

by SHAME MAKOSHORI

This comes out in a 17-page new report by the South Africa-based Southern Africa Resource Watch (SARW), which says in many cases, the country’s 500 000 strong artisanal miners have been ‘robbed’ and manipulated by the elite.

The crisis is, after realising how they have been prejudiced over many years, the artisanal miners have responded by salting away substantial quantities of gold into the black market, at the expense of the economy.

Gold exports earn hard currency for the state vehicles being used to prejudice illegal miners, but these small producers are paid, in part, through the local currency, which has no value outside of Zimbabwe.

In this way, artisanal miners have been neutralised and made into a source of supply of the bullion.

The report says to whom this gold is being exported remains wholly unknown.

This is a question that has remained unanswered by many reports that have been done on Zimbabwe’s illicit gold trade.

In Zimbabwe, as in other nations, gold is a national resource.

The report reveals that whether gold speaks to trade-related debt, profiteering from opaque sales, the deprivation to miners, or the socio-ecological externalities involved, the country is experiencing daylight robbery.

SARW’s report came only a week after the International Crisis Group (ICG) said more than US$1,5 billion of gold is smuggled out of Zimbabwe every year, depriving the cash-strapped economy of crucial foreign-exchange revenues.

ICG says the gold was being shipped from to Dubai.

In the process of the traction gold, machete wielding gangs have been killing artisanal mines, making the sector one of the most dangerous.

But for artisanal miners, their crisis is double edged.

After going through the dangers in the forests, they also face the extortionist state agencies that exploit, says the report.

Smuggling is flourishing under a Zimbabwean law that forces miners to sell their precious metal to a unit of the central bank, which pays for gold 70% in United States dollars, says SARW.

The SARW report unravels further grey areas about Zimbabwe’s murky gold trade, which many reports claim is dominated by political heavy weights and their cronies.

“Under pressure to source forex, we find the emergence of a state scheme to milk the country’s 500 000 small-scale and artisanal miners,” the report says.

“These independent, ‘unofficial’ and unprotected miners constitute a very significant source of production even as the share of gold mining by South African and big western multi-nationals diminished because of the general difficulties of operating amid disintegrating infrastructure and serious energy and forex constraints,” says the report.

Gold has emerged as one of the biggest sources of income for the 500 000 artisanal miners.

But SARW says the sad thing is that it has also been used as a conduit for money laundering into jurisdictions that lack transparency.

It says this occurs because once exported to the first destination – usually Switzerland or Dubai where the world’s refineries are based – more than 70% of all global production lacks nationality.

“Coincidently, both these destinations are legal and financial secrecy jurisdictions of choice, says the report, with the result that many watchdogs in Zimbabwe lack full information to determine answers for questions the state has not or will not provide,” it says.

“It took the mounting economic crisis to force the government’s hand into recognising ASM (artisanal and small scale miners), but this recognition was a double-edged sword because (Fidelity Printers and Refiners (a unit of the Reserve Bank of Zimbabwe (FPR), the state monopoly created to absorb all gold production, was heavily weighted against them in three major respects: by placing buying centres in every Zimbabwean province and offering cash-for-gold, FPR replicated techniques of the ‘informal’ (illicit) market to integrate gold already being extracted by miners operating outside the formal system, by paying a far lesser amount for the same volume of gold than offered by informal buyers, by compounding such loss through the Reserve Bank’s retention strategy to partially pay sellers using local currency and delaying payment in foreign currency,” says SARW.

“By 2018 the United Arab Emirates accounted for more than US$600 million per annum of Zimbabwean gold exports – over 50 per cent of the country’s total export. This represented a geographic shift from previous arrangements with Johannesburg as an import and refining partner, although South Africa still receives about 40% of all formally recorded gold by volume.

In that year, large producers delivered about half the value that small miners delivered,” says SARW.

The report says Dubai’s role as a secrecy jurisdiction points to a critical empire of exploitation that has historically underpinned the brutal and illicit flow of bodies, wealth and justice from the global south.

It says while it may appear that corruption, chaos and malgovernance are key mechanisms at play in Zimbabwe alone, this may not be clear truth.

“Though FPR’s legal monopoly, as an arm of the Zimbabwean Central Bank, purported to be an ‘internal pipeline’ solution to systemic problems that the state did not seek to address, we see how a very important sector of the Zimbabwean economy, now dominated by local peasant/worker miners (who display great ingenuity and knowledge of mining at low cost and have proven their productive ability), is exploited by a ruling class that internalised and reproduced the exploitation of those chains they claim to have broken. FPR’s internal pipeline is not meant to continue beyond the next few years when ‘privatisation’ through foreign governments with a tendency towards repression, offshore entities and local ‘door openers’ force a shift towards a new private sector,” says the report.

 This story was first published in the Weekly Digest, an AMH publication

 

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