‘MaShurugwi will hit mining output if left unchecked’

By The NewsDay | Apr. 5, 2021 | 5 Min read

Artisanal and small-scale miners are said to contribute more than 60% of gold deliveries to Fidelity Printers and Refiners. However, many of them remain informal

BY THOMAS CHIDAMBA

Artisanal and small-scale miners are said to contribute more than 60% of gold deliveries to Fidelity Printers and Refiners. However, many of them remain informal. It is said that more than 1,5 million artisanal miners are not registered. Last year, the small-scale mining sector was troubled by a rowdy group of machete-wielding criminals known as MaShurugwi, who robbed several miners of their gold. Most analysts in the mining sector said machete violence in the artisanal mining sector would affect government’s US$12 billion mining vision by 2023. In this interview, NewsDay (ND) reporter Thomas Chidamba speaks to Zimbabwe Miners Federation (ZMF) chief executive Wellington Takavarasha (WT) about issues affecting the mining sector.

ND: What are the main challenges that small-scale miners are facing in Zimbabwe?

WT: There are a number of issues that are faced by small-scale miners which include lack of finance and lack of human capital. When talking of human capital, we are talking about lack of expertise in terms of qualified workers like geologists, metallurgists, mine engineers and surveyors so that mining is not done speculatively, but is done in terms of imperial evidence to find out if the mine has resources. People normally believe in superstition kuti takarota apa pane goridhe (we dreamt that there is gold here) and yet mining needs geological surveys. Other challenges include that small-scale miners have not been getting much financial support from government. But other sectors like agriculture, unlike mining have got a lot of government incentives. So, we want government to incentivize small-scale miners. Despite small-scale miners contributing more than 60% (of gold to Fidelity Printers and Refiners) we still have not seen government doing enough to incentivise their operations.

ND: As a federation, what measurers have you put in place to mitigate such challenges?

WT: As ZMF, we have been lobbying for funding and also financing of small-scale miners which is palatable to their operations where they do not need collateral. We want their mining activities to be taken as collateral. The federation is making efforts to ensure that people are given money and more importantly, to ensure that government benefits from small-scale mining activities. For this to happen there is need to formalise small-scale miners’ operations.

ND: At one time small-scale miners were said to be contributing more than 60% of deliveries to Fidelity Printers and Refiners but it has since dropped. What could be the reason?

WT: This is due to challenges to do with Fidelity Printers and Refiners’ shortage of cash to pay miners. The fact that small-scale miners are not getting paid cash promptly three days after delivery of gold might have also contributed to the drop in deliveries. Now the situation has improved.

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A comparison of prices offered by Fidelity, which is the sole gold buyer and is government owned, and those in the parallel market, one would find that the parallel market does not have any charges but Fidelity charges royalties and costs related to the smelting of gold.

So, eventually the discount rate at Fidelity becomes -5% or -6% and the black market is normally -4%. As a result, it is estimated that the gold that is going to the parallel market is almost a tonne per month which counts to 12 tonnes per year.

ND: Should artisanal mining be criminalised?

WT: In order to decriminalise artisanal mining, there is need for the Gold Trade Act to be specific on artisanal mining activities. The Gold Trade Act (section 3) talks about being found in possession of gold. If you are found in possession of gold without proper papers you would be arrested. So, we are looking at a situation where the government would say if you are taking gold to Fidelity, there is no need for you to be arrested, but this needs to be covered by an issue of formalisation.

ND: Do you think it is possible to regularise artisanal mining considering that they are not registered and do not operate from a fixed abode, they go where there is a gold rush?

WT: Yes, it is very possible, actually across Africa in countries like Tanzania, Uganda and Ghana they have started coming up with regularisations. If you look at Tanzania, they actually have a primary license which is specific for Tanzanian nationals. Formalising (of artisanal small-scale miners) does not mean giving someone a license, but it is a process where you try to follow artisanal miners wherever they are, be it in Rwenya or Mt Darwin and bring them into the mainstream economy so that the government benefits. The people that are not registered in the country are about 1,5 million and those registered are about 40 000 only, which constitutes 84% of miners that are not registered and only 16% that are registered. The 84% needs to be put into the mainstream economy and government to benefit.

ND: Artisanal miners have been accused of illegally mining in sacred areas, for instance in heritage sites in Chimanimani and Shavarunzvi in Mazowe as well as in graveyards in Bulawayo. Has the federation engaged membership to respect such areas?

WT: What is required is for one to apply to the Mines and Mining Development ministry to get a special grant. Anyone who has not got a special grant is mining illegally. When you get a special grant, you do all the needful. If a place is reserved and is associated with ancestral beliefs, then somebody has to follow those beliefs so that the miners are aware of those. There is no mining that should take place in sacred areas. Mining in graveyards is another terrible situation which cannot be tolerated. Even local traditional leaders may not allow that. Mining in a graveyard is something that is not easy.

ND: Are the MaShurugwi artisanal miners or they are just criminals tarnishing the small-scale gold mining sector? As a federation how are you dealing with the issue of MaShurugwi?

WT: MaShurugwi is just a term that was unfortunately used by people to define thugs and robbers that come to a mine and loot gold that they never sweated for. When we talk of MaShurugwi, they are unwanted criminals. Of course, we had to make sure, together with government arms, that those people have been weeded out and are removed and arrested. So the issue is that miners are afraid of those people, but they should make sure they are arrested.

ND: Recently, government granted 26 Exclusive Prospecting Orders (EPOs) after decades of lobbying. Do you think only the 26 will help bring value to the targeted $12 billion mining economy by 2023?

WT: The gazetting of the 26 Exclusive EPOs means that those EPOs as title holders can now be able to allow small-scale miners that would have made applications for a particular area because when the EPOs were done, that place was now reserved and no one could work. We have lobbied to the EPO holders through the mining affairs board so that small-scale miners that apply should get space for particular areas that they want to work on.