HomeBusinessZimbabwe losing millions to gold smuggling: MMCZ

Zimbabwe losing millions to gold smuggling: MMCZ

ZIMBABWE is losing over US$50 million worth of gold every month to smuggling activities, according to the Minerals Marketing Corporation of Zimbabwe (MMCZ).


Owing to the inability of government to financially capacitate the central bank subsidiary, Fidelity Printers, to purchase gold at competitive prices, a large number of gold producers are increasingly opting for foreign markets.

MMCZ director, Tendai Munyoro said the biggest problem with gold smuggling in the country was the absence of Fidelity Printers as a regulator and as a buyer.

“Producers of gold and barons have financed the purchase of gold illegally and smuggled it to South Africa where they get a better price.

This gold is then sent over into Switzerland as an export,” he said.

Before the inception of the multicurrency regime in 2009, Fidelity Printers used to buy the precious metal from registered gold producers that included primary producers, small-scale miners and custom millers under a government support price facility.

However, the lack of funds and lack of vibrant institutions that purchase gold competitively on the domestic market have only served to fuel smuggling of gold out of the country.

“The MMCZ is working on a scheme with some partners and financiers from Shanghai and the Middle East with a view towards unveiling a multimillion dollar scheme that will see Fidelity Printers coming back on board and offering competitive prices for gold that is produced locally,” said Munyoro.“We can’t stop the smuggling of gold overnight but in the next 12 months, people will see the advantages of selling gold locally.”

Munyoro said MMCZ, Zimbabwe Revenue Authority (Zimra) and Zimbabwe National Roads Administration (Zinara) would in the next six months be unveiling ultra-modern weigh bridges, to be mounted at all points of entry and exit at the country’s borders.

This, he said, would be a step towards curbing the rampant leakage of gold at the country’s borders through illegal channels.

According to the Chamber of Mines, gold production increased by 13,4% in 2012 to 14,7 kg.

Strong performance came from large-scale gold producers that increased production by 17%.

Munyoro said the MMCZ had since realised that a huge proportion of the country’s gold comes from the small-scale mining sector but operators continued to be hampered by the lack of appropriate equipment and the failure to access loans from financial institutions.

A lot of the equipment used by small-scale miners is very rudimentary and is sometimes not available at all.

Small-scale gold miners are presently working on increasingproduction to over four tonnes per year, as the use of a multicurrency regime helped to eliminate the middlemen, ensuring small-scale-miners obtained fair value for their gold.

Munyoro said MMCZ and the Ministry of Mines and Mining Development would, in the next 60 days, roll out a mining mechanisation programme aimed at capacitating small-scale miners with the requisite and proper equipment.

He said the first phase which involves purchasing equipment such as jack hammers, compressors and generators among others would cost US$3 million.

The entire project is expected to cost US$10 million and would cover the whole country.

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