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Gold rush leaves trail of destruction

An environmental catastrophe is rapidly engulfing the mining town of Penhalonga in Mutasa district, Manicaland province.Random open cast mining by scores of syndicates, destruction of fields belonging to local peasant farmers, pollution of Mutare River and invasion of Penhalonga estates by artisanal miners brought in by syndicates linked to ruling elites have accelerated environmental degradation.

BY CENTRE FOR NATURAL RESOURCE GOVERNANCE

The environmental regulatory authority, the Environmental Management Agency (EMA) has not taken action, raising suspicion of the involvement of very powerful or politically well-connected individuals in the unfolding environmental crisis in the once pristine town of Penhalonga.

This article outlines the current situation at Redwing mine in Penhalonga and highlights the risks posed by the activities.

The problem in Penhalonga started with the placement of Redwing Mine under judicial management by Metallon Gold in 2018, citing viability challenges owing to foreign currency shortages.

The forex shortages were blamed on the Reserve Bank of Zimbabwe’s (RBZ) regulations which stipulated that gold mining companies sell their gold to Fidelity Printers and Refiners at a price determined by the central bank.

The RBZ allowed companies to retain a portion of their export earnings while the rest was paid in local currency using real-time gross settlement (RTGS) system.

Metallon Gold claimed it was sending gold to RBZ, but their lodgements were not being honoured.

Metallon Gold subsidiaries were affected, firstly it was Acturus Mine then Shamva Mine and lastly Redwing Mine.

Only How Mine remained operating. In 2019, Metallon Gold chairman Mzi Khumalo announced that they had started legal proceedings against the RBZ, claiming that the company had lost US$132 million worth of profits due to the central bank’s alleged “corruption and a sense of impunity”.

Redwing Mine had gone for more than three years without paying salaries to its 750 employees, resulting in the workers suing the company.

Following the placement of the company under judicial management in 2018, most workers turned to artisanal mining for survival.

At first some of the workers were working underground but this stopped due to flooding which was triggered by the switching off of electricity supply by Zimbabwe Electricity Supply Authority, citing non-payment of bills by the company.

Redwing Mine workers then joined artisanal miners at popular mining sites along Mutare River and around Penhalonga.

However, things turned worse when a company known to artisanal miners as Prime Royal Mining (PRM) arrived in Penhalonga in December in 2019.

PRM is now the major player at Redwing Mine in Penhalonga.

The Centre for Natural Resource Governance (CNRG) has established that PRM entered into a one-year contract with Redwing Mine in December 2019.
Under the agreement, Redwing Mine and Prime Royal Mining get 30% each while artisanal miners get 40%.

It was also established that PRM was to set up a milling plant and artisanal miners are obligated to send their ore to that mill.
The milling company became the sole gold buyer from the artisanal miners.

The artisanal miners include some former Redwing mine workers and some syndicates that came from Shurugwi, Gweru, Kwekwe, and Kadoma.

Redwing Mine also negotiated to have its unpaid workers work as artisanal miners as a way to mitigate their financial situation.

When PRM started operations at Redwing Mine, the ground manager reportedly left at the beginning of 2020 under a cloud of accusations.

The replacement is a man, who reportedly claims to be linked to the security team of a member of the presidium.

As PRM’s agreement with Redwing Mine nears expiry date, CNRG understands the milling company has been making frantic efforts to negotiate for a three-year contract which will grant them authority to deploy artisanal miners until 2023.

However, there are reports that the negotiations are being scampered by the interests being shown by a certain businessman with interests in the mining, energy and fuel industry who wants to take over Redwing Mine. 

Hundreds of tonnes of gold ore are processed by PRM at Redwing Mine premises.

According to a source within Redwing Mine, monthly gold production levels are estimated to be between four to five kilogrammes.

However, it emerged that security is lax along the production line at this mine and as a result, some people smuggle their ore outside the plant.

According to sources, those who smuggle the gold ore will first bribe the security guards.

Smuggling has given rise to disparities in terms of earnings for artisanal miners because while some get 40% share, those who are smuggling are retaining 100% value.

Some artisanal miners alleged that the smuggling of gold ore is happening with the full knowledge of PRM personnel.

Most of the artisanal miners who are part of the smuggling syndicate are closely linked to the management of the company.

CNRG also established that PRM buys gold from artisanal miners at straight weight prices of US$40 per gram instead of fine weight price of US$57 per gram.
It also emerged during the research that PRM does not have a clear managerial structure on the ground and as a result, it has been difficult for artisanal miners to know who exactly is in charge.

There are indications of involvement of senior politicians and members of the security sector from Manicaland in the Penhalonga gold rush.
CNRG established that in December 2019, some of the Joint Operation Command (Joc) officials from Manicaland held meetings at Redwing Mine to deliberate on the future of the company.

Some of the senior police officers in the province have since been allocated gold rich spots to extract the mineral without following proper regulatory procedures as required by law.

Politicians and other politically linked elites use power and political connections to access gold claims and parcel them to syndicates which they manage.
The closure of Redwing Mine offered an opportunity to political elites, the politically connected and securocrats who, with the aid of the organised syndicates, are exploiting the mine’s claims dotted around Penhalonga and Tsvingwe for profit without due care for the environment.

The Mutasa RDC cannot effect council by-laws to stop the illicit mining allegedly due to fear of retribution from those behind the mining activities.

In the same vein, EMA has failed to put an end or punish those undertaking illegal mining as the law requires, and so has the Zimbabwe Republic Police (ZRP) because the people involved are “untouchable”.

Observations in Penhalonga have shown that members of the ZRP are providing security for the gold mining actors by making sure that ore that is coming from the pits goes straight to the mill.

State security is providing services to a shadowy private company that is rumoured to belong to some members in the Joc.

The involvement of politicians has undermined the rule of law, stability and livelihoods of affected communities.

Corruption, sometimes coupled with intimidation and violence has become common.

CNRG investigations have revealed that the haphazard mining in Penhalonga has now taken the form of organised crime as the syndicates are interlinked and use corruption and violence to secure mining rights and resource rents.

l This is an abridged version of a report by the Centre for Natural Resource Governance titled: Penhalonga gold rush leaves a trail of destruction

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