- April 15, 2021
- Posted in LOCAL
A gold buying war has erupted in the industry pitting the newly formed indigenous grouping and a long existing cartel that has been accused of manipulating prices of the yellow metal, Business Times can report.
Well-placed sources in the sector said this week the cartel consists of “foreign and local white gold mafia” that has for years been fuelling smuggling of gold.
The cartel is said to be led by a famous tobacco dealer (name withheld).
Indigenous gold buyers have formed an association, National Gold Buyers Association to counter the cartel.
The association is led by gold dealer, Scott Sakupwanya.
The fallout between the two constituencies stems from the pricing of the yellow metal.
The cartel has been enjoying the monopoly of having gold export licences and it was easy for them to distort and manipulate gold buying prices on the market.
“There has been some outcry on the continued distortions on the market and this association was formed to address market manipulation leading to price distortions as well as curbing smuggling that had become rampant in the market,” Zimbabwe Miners Federation chief executive Wellington Takavarasha told Business Times.
Sakupwanya said the organisation was created to control the sale of gold and this was only achievable through setting up a registered and recognised Association.
“We created this organisation so that there is a uniform price on the market unlike in the past,” Sakupwanya said.
At the international market, a kilogramme of gold is selling at US$56,000 per kilogramme.
But, the cartel has been paying around US$42,000.
The indigenous grouping is paying about US$50 000 per kg.
The country’s sole buyer of the yellow metal, Fidelity Printers and Refiners (FPR) is paying about US$47 000 a kg, after deducting royalties and the cost of importing the cash. According to FPR, Zimbabwe is losing about 30 tonnes of gold annually through side marketing and illicit flows.
Zimbabwe is losing between US$1.2bn and US$1.7bn yearly due to unfriendly policies which benefit dealers despite the country having mechanisms to curb gold and financial leakages.