The Sunday Mail
GOVERNMENT has set up a task-force to establish the quantity of minerals lost through smuggling, with independent estimates suggesting that Treasury might be losing millions of dollars monthly.
Market watchers say the amount is too high for an economy battling acute cash shortages.
The leakages are mainly through under-declaration of exports and transfer pricing by mining houses and smuggling through the country’s porous borders.
Big miners and their small artisanal counterparts are both to blame.
Last year, mining companies remitted about US$50 million to Treasury from the US$2 billion they earned from mineral shipments, far lower than the US$300 million that was initially forecast as accruing to the taxman.
Mines and Mining Development Deputy Minister Engineer Fred Moyo told The Sunday Mail Business that there was rampant mineral smuggling, but exact quantities of losses could only be determined after the Government-funded scientific study.
“The effort now is really to try and correct the leakages.
“My team is on the ground working on the exercise to establish the extent of the leakages.
“So let me get the report first from our team and present it to the minister and then we start talking from there,” said Eng Moyo.
It is believed that the amount of gold smuggled out could be more than the metal that is presently being sold to Fidelity Printers and Refiners (FPR), the sole official buyer of bullion.
Zimbabwe has 1 600 registered small-scale gold miners employing an estimated 500 000 people.
But most of the miners are suspected to be selling their bullion illegally.
Zimbabwe Artisanal Miners and Small Scale Council (ZAMSC) board member Mr Paul Mangwana told Parliament earlier this year that low prices offered by Fidelity were driving gold smuggling.
“It does not make sense for us to sell to Fidelity.
“We are losing tonnes and tonnes of our gold, which is going to South Africa, where dealers buy at five percent above the prevailing world prices.
“Local miners take the risk to go and sell there.
“As a result, we are building South Africa instead of building Zimbabwe,” said Mr Mangwana.
As part of a broad liberalisation programme, Government in 2009 opened the trade of the yellow metal — a decision subsequently reversed in order to try and bring artisanal miners into the mainstream economy.
Statistics show that gold production fell from about 17 tonnes in 2004 to just over 14 tonnes last year due to operational challenges such as flooding of mines and high production costs.
FPR recently told The Sunday Mail Business that it could buy more than a tonne of gold worth about US$40 million monthly.
The refining arm of the central bank has made strategic arrangements with financial institutions to get bridging finance in the event that it receives gold deliveries that are more than forecast.
Last year gold producers wobbled after the announcement that Fidelity would be the sole gold buyer as fears spread that the company would not be able to pay for deliveries promptly.
