The Sunday Mail
Africa Moyo Business Reporter
GOVERNMENT, through the Office of the President and Cabinet (OPC), has come up with a technical working group for the mining sector, which is expected to fast-track decriminalisation of gold possession over the next 100 days. Artisanal miners have been falling victim to Section 1(1) of the Gold Trade Act which criminalises possession of gold without a licence.
Though a gold buying licence initially attracted a US$5 000 charge, it is now being issued for free. But for the prospective licensee to qualify, miners have to be able to provide an estimate of the potential gold output at their mine(s), including demonstrating ability to deliver at least 1kg per month.
Now the OPC — which is reforming the doing business environment — has set up a technical working group headed by University of Zimbabwe lecturer Professor Ashok Chakravarti as the country coach. As part of its key mandate, the TWG will consider all laws, regulations, Statutory Instruments, licences, permits, and fees and other regulations negatively affecting miners.
Prof Chakravarti told The Sunday Mail Business that most of the reforms would be undertaken over a 100-day period through the rapid results approach (RRA).
The RRA adopted by Government is a methodology that breaks down long-term goals and projects into smaller components that can be implemented in short periods. “Our country is producing an average of 20 tonnes of gold per year and small-scale producers are contributing about half of that, but they are affected by legislation from the colonial period,” said Prof Chakravarti.
“According to that law, small-scale miners are supposed to be criminals. Is that good? We know about that and we are going to change it so that they can sell their gold to Fidelity Printers freely and not to the black market. “Addressing that requires a change in the legislation, and we will look at the law and address it in 100 days; it’s called the rapid results approach and we address issues in 100 days and not two years.”
By last week, the TWG was already taking submissions from the mining sector. Currently, local miners have to negotiate a regulatory maze of over 16 different laws, which are often blamed for red tape and the high cost of doing business.
The Mines and Minerals Amendment Bill was expected to usher in the much-needed reforms — but it has been in the works for nine years now. Government’s new initiative to revamp mining is likely to find an ally in the Reserve Bank of Zimbabwe, which is pushing for increased gold output to shore up its reserves and boost export revenues.
Zimbabwe Miners Federation CEO Mr Wellington Takavarasha said last week decriminalising gold possession would guarantee increased deliveries to Fidelity Printers and Refiners — the RBZ’s gold-buying unit. “The move will help in increasing the quantities of gold delivered to Fidelity Printers,” said Mr Takavarasha, adding: “There are many artisanal miners with gold and if they are not going to be arrested, they will channel it to the formal market.”
But critics warn that decriminalisation of gold, rather than formalisation of artisanal mining the sector, could lead to lawlessness and leakages. The Eastern and Southern Africa Anti-Money Laundering Group, which visited Harare last year to assess the country risk with regards to money laundering and terrorism financing, cautioned on the high risk posed by easy gold movement.
Last year, gold exports grossed US$914 million from US$737 million in 2015. Of the 23 tonnes produced in 2016, small-scale miners accounted for 9,7 tonnes. A Gold Development Fund has been set up to support miners to formalise operations and channel output to the formal market.
Fidelity Printers and Refiners has relaxed its approach and accepts as little as 1g of gold down from the previous minimum of 5g to encourage more people to sell the metal formally; and a Gold Development Fund is supporting miners to formalise operations.
Gold output peaked at 27,1 tonnes in 1999 but slumped to 3,6 tonnes in 2008. After Government instituted several policy measures, gold production has been recovering and the output target for 2017 is a record 28 tonnes.
