Zacc wades into gold smuggling

26 Jan, 2020 - 00:01 0 Views
Zacc wades into gold smuggling

The Sunday Mail

Ishemunyoro Chingwere
Business Reporter

THE Zimbabwe Anti-Corruption Commission (Zacc) has been handed an explosive gold smuggling report that details well-knit gold smuggling by a coterie of gold buying barons, which is costing Zimbabwe billions of United States dollars, The Sunday Mail Business has learnt.

The report was prepared by the Gold Mobilisation National Taskforce, which is a collaborative effort comprising officials from the country’s security apparatus and the Ministry of Mines and Mining Development.

The taskforce’s primary mandate is to curb gold leakages and ensure that all produce is channelled to the formal market.

Zimbabwe is losing tonnes of the yellow metal annually to the parallel market as gold buying barons have taken advantage of inefficiencies of the State buyer — Fidelity Printers and Refineries (FPR) — to lure gold producers.

It is understood that gold is being smuggled through neighbouring countries, particularly South Africa, which is then used as a gateway to overseas markets.

According to the report, small-scale miners, who are coincidentally the country’s largest gold producers having overtaken their primary producer counterparts, are the biggest suppliers of the yellow metal to the illegal buyers.

Zacc chairperson Justice Loice Matanda-Moyo confirmed that the anti-corruption body had received the report for its attention.

“Yes, we have received the report and we are currently going through it,” said Justice Matanda-Moyo.

The Sunday Mail Business has also had sight of the report which details how Zimbabwe is losing an estimated 70 tonnes of gold to the parallel market every year as licensed buyers channel most of their output to the informal market.

The report also implicates those that are tasked with curbing the smuggling. lt says the officials are actually at the centre of aiding the gold smuggling activities.

Some well-heeled locals working in cahoots with foreign nationals mainly from Asia and Middle East are at the centre of this mining heist.

Some of the buyers are reportedly buying the gold under the pretext of value addition. However, they then smuggle it outside the country without adding any value. In some cases, they do add value but proceeds from these sales never find their way back into the country.

Last year, FPR took delivery of just over 27 tonnes of gold.

The figure is a far cry from the 100 tonnes annual target set by Government, which could see gold export receipts surpassing the US$4 billion mark for the country to attain a US$12 billion mining sector target by 2023.

The report details how the smugglers are luring gold producers by paying 100 percent in foreign currency.

FPR is paying 55 percent in foreign currency, while the balance is paid in local currency using the interbank exchange rate.

In November last year, Reserve Bank Governor Dr John Mangudya defended this position saying Government could not pay 100 percent in foreign currency as it has other important obligations to meet.

“The retention issue (55/45) will certainly be put under review, but a 100 percent will not be possible. The minerals are not owned by the miners, but by the Government.

“We understand the miners’ concerns but what I can say now is that we are willing to review the retention issue to a higher percentage, but not to say that we will pay 100 percent in foreign currency. The country needs some of the money for essential imports like hospital drugs, fuel and several other things,” Dr Mangudya said then at a miners’ conference.

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