Govt gets tough on mining sector

GOVERNMENT says the Reserve Bank of Zimbabwe (RBZ) should strengthen its departments, in particular the Financial Intelligence Unit, so as to fight externalisation of foreign currency, mainly by mining companies.

Deputy Minister of Mines and Mining Development Engineer Fred Moyo told The Sunday Mail Business last week that the Chamber of Mines of Zimbabwe — the apex miners’ representative body — should also engage mining firms and direct them to operate in accordance with the country’s laws.

This comes as two top gold mining firms are under the spotlight for allegedly salting away a combined US$46 million.

Zimbabwe’s biggest gold producing company by assets and output, Metallon Gold, is facing charges of externalising US$31 million through dividends paid to shareholders, without profits to back them.

Metallon is also accused of making fictitious external loan payments, resulting in the country being prejudiced of the much-needed foreign currency.

The case is currently in the courts.

Similarly, former bosses at the Bindura-based Freda Rebecca Gold Mine, a unit of the Asa Resource Group (formerly Mwana Africa), are accused of siphoning up to US$15 million through a series of underhand dealings by its Chinese owners.

Police have since launched a manhunt for former chief executive officer Mr Yat Hoi Ning and former Asa Resource Group’s finance director Mr Yim Chiu Kwan on allegations of defrauding Freda Rebecca of more than US$2,7 million.

Last week, Deputy Minister of Mines and Mining Development Engineer Fred Moyo told The Sunday Mail Business that mining houses should be responsible citizens, who respect the laws of the country.

“We want to get companies to be responsible. We can’t do everything on our own (policing and regulating their operations).

“You see, when companies under-declare their profits and externalise foreign currency, Government loses out on taxes while employees also get low salaries.

‘‘This means we need to address this situation and be responsible, all of us.

“This is a much bigger issue, the mining companies must follow the ethics and do their business in an appropriate manner while the RBZ should also ensure that its units dealing with foreign currency are on guard to deal with such issues. The Chamber of Mines must also engage miners and order them to operate ethically,” said Eng Moyo.

No comment could be obtained from the RBZ as Governor, Dr John Mangudya, was not picking up his mobile phone last week.

Chamber of Mines of Zimbabwe chief executive officer Mr Isaac Kwesu told The Sunday Mail Business that he was unaware of the externalisation allegations levelled against mining companies.

“I don’t have any information pertaining to that. I can’t comment on issues that I don’t know. But as a Chamber we encourage our members to try as much as they can to comply with the laws of the land.

“(But) this is a policing issue and I think the Reserve Bank (of Zimbabwe) and the regulator, the Ministry of Mines, can respond to your questions; that is all I can say,” said Mr Kwesu.

Several other mining companies, especially diamond miners, have been previously implicated in unrestrained externalisation of foreign currency.

Other mining firms are alleged to be conspiring with local mining bosses to undervalue minerals for their benefit, in the process depriving the country of revenue.

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