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Govt proposes environmental levy to support rehabilitation of rivers degraded by illegal mining activities

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The government has approved plans to impose stiffer penalties for environmental offenders as well as avail funds through the proposed environmental levy to support the rehabilitation of rivers that have been degraded by illegal mining activities.

Vongai Mbara

Speaking in a post-Cabinet media briefing on Tuesday, Information Minister Monica Mutsvangwa said the government would engage third party companies through the Environmental Management Agency (EMA) to rehabilitate the country’s environmentally degraded rivers.

These include Mazowe in Mashonaland East province, Munyati and Angwa in Mashonaland West, Manzimudhaka in Midlands province, and Save in Manicaland as well as Insiza and Umzingwane in Matabeleland South province.

Concerns over environmental degradation resulting from artisanal mining activities have been raised on multiple occasions by the Zimbabwe Environmental Law Association (ZELA).

“To remedy the situation, the government will, in the long-term, establish an environmental levy on all activities that degrade the environment,” Mutsvangwa said.

“In the short to medium-term, the government will engage third party companies through EMA to rehabilitate damaged mined-out areas on our rivers in the northern, southern and eastern regions.

She added, “As a way to promote participation of the third-party companies, EMA will initially meet the rehabilitation costs, with the Treasury providing the necessary budgetary support.

“Where rehabilitation is to be undertaken on areas that have the potential for mineral recovery, the contracted third-party company will be prohibited from processing the alluvial sand within three kilometres of the river,” Minister Mutsvangwa said.

Women Miners Hit Hardest By Covid

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Several women miners in the Shurugwi area of the Midlands province say they have suffered large and disproportionate consequences because of Covid-19 lockdowns and have been slower in recovering from the effects of the pandemic.

Vongai Mbara

According to the women, they have incurred losses after they failed to service loans that they took from banks before the pandemic to finance their mining operations.

Speaking in an interview, Shurugwi Women in Mining treasurer, Alice Mdutshwa said women are affected by the lockdowns as they fail to utilize their leased mining claims.

“Most of the women have been finding it very difficult to work during COVID-19 lockdowns. During the lockdown, women miners failed to mine on their claims which were leased to them by Falcon Gold through the Shurugwi Development Trust (SDT). This presented a lot of challenges to the miners because they were expected to pay for their rentals yet they were not doing any production,” said Mdutshwa.

Mdutshwa, who is also the former chief executive officer of SDT, said some of the miners were also struggling to service their loans which they took from banks.

“The plight of some of these miners is being worsened by the fact that some borrowed money from the Women Bank and they are now failing to service their loans. If the loans are not written off, the miners risk losing their properties,” said Mdutshwa.

She also revealed that the COVID-19 pandemic affected the subscriptions of the association as some members can no longer afford the US$10 monthly subscriptions.

“Since COVID-19 started we have lost a significant number of our membership. A lot of our members would now rather prefer to buy food and pay rentals than to pay subscriptions.

Caroline Mahanangandi, Director of a Mberengwa based mining company, Silver River Mining (PVT) LTD said COVID -19 curfews posed numerous challenges to women miners.

“During the lockdowns, it was very difficult for women miners to access mining accessories. Travelling from Mberengwa to Harare or Bulawayo where most mining equipment is found was not easy. Although mining was declared an essential service during the lockdown, most female miners did not have exemption letters. In future the authorities should consider mining certificates as proof,” said Mahanangandi

The Silver River Mining (PVT) LTD Director said most women miners in her area incurred huge losses due to non -productivity.

“It will take quite some time for some of us to recover from the effects of COVID-19.  During the lockdown we were forced to pay non-productive workers and at the same time look after our families,” she said.

Mahanangandi said at one point, she, her maids and manager tested positive to COVID -19.

“Fortunately, all of us recovered from the disease because we all followed the COVID-19 prevention protocols,” she said.

The miner however bemoaned what she described as lack of information about the pandemic in the area.

While Mahanangandi and her workers were lucky to survive COVID-19, some women miners lost their workers to the deadly pandemic.

“I know some of the miners who have lost workers to COVID-19. Some workers have also not returned to work after the lockdowns. Some of the miners also lost their mining equipment to thieves and vandalism during the lockdown,” said Maria Masimba, Manicaland Women in Mining chairperson.

The chairperson said the pandemic has also stalled resolutions of various mining disputes in the province

She appealed to the government to assist the women miners in re-establishing themselves following almost two years of inaction.

Eureka looks to produce 200kg of gold monthly

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President Emmerson Dambudzo Mnangagwa last week officially opened Eureka Gold Mine, the mine is expected to become one of the leading gold producers in two years’ time.

Anerudo Mapuranga

The owners, Dallaglio Investments, plan to produce an initial 140 kilogrammes of gold per month gradually increasing to 200 kilogrammes monthly positioning the mine to be a significant contributor to the US$12 billion mining industry by 2023.

According to Mashonaland Central Minister of State in the president’s office Hon Monica Mavhunga, Eureka mine has proven to be a key player in the growth and development of the province as well as being important to the transformation of the economy of Zimbabwe to become an upper-middle-income economy by 2030.

“The impact on the resuscitation of Eureka gold mine has inflicted smiles on many and the social-economic life of the people of Guruve is set to improve. Exceedingly delighted that the mine has employed over 500 people with over 64 per cent of them being locally based. The company has also embarked on serious transformative programs for the local community under its corporal social responsibility,” Mavhunga said.

Eureka Mine, which employed over 400 workers at its peak, producing about 1,5 tonnes of gold per annum, had been idle for the past 20 years, an investment of nearly US$50 million by Dallaglio Investments, which purchased the mine from Delta Gold in 2018 and went on to re-design the mine and install new plant and equipment is considered significant to the achievement of the Mines and Mining Development national gold target where 100 tonnes annual production has been projected by 2023.

Eureka Gold Mine will initially operate as an open-pit mine and the ore body has been explored to a 650-metre depth producing 1.3 grams per tonne with the hope that as they mine deep, the grade will increase.

Invest more in exploration, research, miners told

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PLAYERS in the mining sector should invest more in exploration operations and research to ascertain the actual mineral reserves before extraction to avoid unnecessary degradation and losses, an industry executive has said.

Speaking during a recent Antech Laboratories open day in Kwekwe, Midlands provincial mines director, Mr Tariro Ndlovu, said unlocking higher mining value should ride on comprehensive exploration and research outcomes.

Antech Laboratories is a Kwekwe based company, which offers mining and exploration services, industry geochemical analysis, mine site assaying and metallurgical testing support mining and exploration companies to measure and develop their resources.

The inaugural open day brought together miners and stakeholders in the mining sector to discuss challenges facing the mining industry and how to overcome them.

“The decisions about exploration and grading should be based on the data generated by these analytical laboratories, not guesswork. Zimbabwe’s mining sector is highly diversified with close to 40 minerals, which are very key in economic development, particularly attaining Vision 2030,” said Mr Ndlovu.

“Zimbabwe’s transition into an upper-middle-income economy status requires reliable and reproducible test results in the mining sector since the country’s economy relies heavily on mining and mineral exploitation.

“Metallurgical assaying laboratories like Antech play a critical role in the mining and mineral processing sector in that it conducts mineral assays in support of exploration, research and control in the processing plant.”

The mine’s director also said exploration was key in the monitoring of the environment as the mining companies carry out their mining activities. The mining sector continues to be the bedrock of the country’s economy in terms of export earnings.

As such, Mr Ndlovu said the Government was committed to the full support of the sector to ensure improved output and quality operational standards.

He said the theme for the event: “Optimising mining operations and exploration through rapid reliable analytical services” was timely and in line with the objectives of the Government’s Vision 2030.

Laboratory manager Mr Edson Luwobo highlighted the need to strengthen synergies between mining and exploration industry and assaying labs.

The Chronicle

Mines Ministry to engage investors on closed mines

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The Ministry of Mines and Mining Development has said it requires $8 million to enhance efforts towards the resuscitation of closed mines through engagement with investors and relevant stakeholders.

Mines Minister Winston Chitando, speaking at the 2022 pre-budget seminar, said more effort is also being done through the Zimbabwe Mining Development Corporation (ZMDC) whereby they are engaging various investors to reopen closed mines.

“The public urged the government to set aside resources for opening up closed mines across the country in order to raise more revenue and create employment.

“A total of $8,172,604 is required to support promotional activities, engagement with investors and relevant stakeholders towards the reopening of closed mines,” he said.

Minister Chitando said the government has come up with various incentives, both fiscal and non-fiscal incentives, to attract investment as the country strives to attain the target of a USD12 billion industry by the year 2023.

The US$12 billion industry ultimately feeds into the Government’s vision of Zimbabwe becoming an Upper Middle-Income Economy by 2030.

“It is important to benchmark our incentives regionally and globally and the Ministry does that periodically,” he said.

He noted that in terms of the Mines and Minerals Act [Chapter 21:05], any mining company that invests more than US$100 million may apply for a Special Mining Lease which allows the company to negotiate various tax concessions with the Government.

Minister Chitando also said that the Ministry will capacitate Mining Promotion Corporation (MPC) by approximately $5 million to help it spearhead the exploration needs for the year 2022 by the private sector and that of the Zimbabwe Geological Survey.

He said in line with Devolution and Decentralization, the Ministry of Mines and Mining Development is planning to establish offices in a number of communities including Hwange, Kadoma, Zvishavane and Lupane.

Minister Chitando said the ministry is seeking to transform the Lupane office into a fullyfledged Provincial Office as currently the Bulawayo Metropolitan hosts most of the staff and operations of the province.

“Funding will therefore be required for acquisition of land, construction of appropriate offices, fully furnishing the offices and provision of requisite tools of trade. In this regard the Ministry requires $150 million to achieve this target,” he said.

According to Minister Chitando, currently there are two Lithium Producers in Zimbabwe. He said

Prospect Resources commissioned their lithium processing pilot plant in June 2021.

He said the pilot plant is producing petalite ore with four percent lithium and 0,05 percent iron oxide.

“The low iron quantity makes the product highly marketable. Phase 1 of the Arcadia Lithium Project will establish a plant that produces Low Iron Spodumene used in the Chemical Industry and Ultra Low Iron Petalite used in the Industrial Market.

“Phase 2 will establish a Lithium Hydroxide Plant and this plant will beneficiate low iron spodumene into Lithium Hydroxide, Lithium Carbonate and Lithium Sulphide.”

 

 

Business Weekly

Lafarge plant incident to impact fourth quarter 2021 performance

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LAFARGE Zimbabwe says an on-site incident involving roof collapse of one of its cement mills, will have an impact on the group’s business performance in the remaining quarter of 2021.

The incident that happened on 11 October 2021, recorded no fatalities or injuries, but there has been a general low visibility of the company’s cement on the market.

“The necessary measures to restore the structures and restart the mills have commenced and are well under way,” Faithful Sithole, the company’s secretary said in a statement.

She added that stakeholders will be informed of any further developments in due course.

Lafarge in March this year commenced its last project, the new Vertical Cement Mill under the US$25 million expansion plan that commenced in 2019.

Under the expansion plan, the company installed the new US$2,2 million automated Dry Mortars (DMO) plant, which saw production capacity increasing from 7000 tonnes per annum to 100000 tonnes per annum.

The installation work for the new Vertical Cement Mill, commenced in March 2021 and is expected to be commissioned in March 2022.

Under the US$25 million expansion plan, Lafarge is aiming to more than double market share and annual production capacity.

According to the company’s trading update to May 2021, the business achieved volume growth leveraging on the growing market demand in the Individual Home Builder segment as well as the ongoing major infrastructure development projects led by the government.

Cement volumes for the period increased by 23,7 percent compared to prior year in spite of the Covid-19 national lockdown instituted in the first quarter.

“In the same period Dry Mortar products volumes grew by 105 percent compared to the same period last year.

“The Binastore retail franchise recorded a remarkable 555 percent growth in volumes compared to the same period in prior year. This growth in the retail franchise business, was further strengthened by the growth in purchases made on the Binastore e-commerce site facilitating business continuity during lockdown periods,” said the company.

The company noted that as a result of strategic changes in product portfolio mix the average selling price was favourable against budget.

For the year ended 31 December 2020, the group posted a much-improved financial performance for the year in spite of the Covid-19 induced operational challenges.

Revenue for the year grew by 68,5 percent to $6,9 billion compared to $4,1 billion in prior year, attributed to significant volume growth in the Dry Mortars business and a market shift towards high strength cement which influenced a significant change in the cement product mix.

 

 

Business Weekly

Hwange Villagers Petition Chinese Company To Halt Coal Hunt

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Villagers in Dinde village, Hwange district have petitioned Beifa Investments, a Chinese-owned mining company, exploring for coal in the Dinde area to halt any mining activities which they claim are violating the culture and heritage of the Nambya people.

Vongai Mbara

Beifa Investments torched a storm recently when it started exploring for coal in Ward 13, Dinde without consulting villagers.

The villagers fear over 600 families will be displaced if the project continues and have accused local leaders including the traditional leader, Chief Nekatambe and Hwange Rural District Council officials of nicodemously allowing the mining company to continue carrying out the exploration work despite their protests. They also fear their relatives’ grave graves and sacred shrines will be violated.

A rural women’s roundtable meeting organised by the Matabeleland Institute For Human Rights (MIHR) also addressed the issue.

Thembelihle Dlamini, a villager in Dinde and a committee member of the Women’s Coalition of Zimbabwe said there was panic in Dinde Village as eviction was imminent.

“The company did not even consult us that they have intentions of coming to operate at our place. The company is now digging our graves. They should have asked for permission from us, probably we would have performed rituals on these cemeteries,” Dlamini said.

She said the Dinde village is living in fear of eviction.

“We have built schools, clinics and as women, we have our businesses that we have established there.

“As I am talking now, about 600 families or even more are affected. Recently, precious stones were discovered in about four villages in Hwange.

“All those communities will be evicted,” Dlamini said as she appealed to the government to save the community from eviction.

“We also have our river called Nyanduwe and there is gas that is emitted from their working place. It might affect our water and this would make us sick. We are faced with danger as we are prone to contract diseases in the area.”

The Chinese miners are reportedly claiming that they have a special grant from the government, however, they have not produced it despite several demands for them by the Zimbabwe Lawyers for Human Rights.

The villagers’ petition being circulated to gather more people’s signatures reads: “Beifa Investments and Hwange Rural District Council did not carry out proper consultative meetings with the communities and hence this has brought about conflict with the communities involved and Hwange district at large.”

Dinde is home to thousands of Nambyas and Tongas with a majority of Tonga who first settled in the then-named Whange district up to Victoria Falls.

They were resettled in Dinde after their relocation from Sinamatela area in the 1920s to pave way for the Hwange National Park.

An environmental consultant, Oliver Mutasa said there was little the community can do to stop the exploration process.

“Unless if it’s an ecological area like a national park, but unfortunately for an area like Dinde, once a special grant is given, mining activities cannot be stopped,” he said.

“However, if there should be displacement, there should be compensation. Sometimes people lose out on compensation because instead of contributing to the EIA they oppose the whole process. What people need to do is contribute on what they want the miner to do as part of corporate social responsibility.”

MIHR coordinator Khumbulani Maphosa said the government must formulate a human rights-based framework to prevent development-induced evictions.

He said human rights constitutional bodies should be involved first whenever there is an eviction

“Then they do the impact assessment. We trust these commissions better than these consultants hired by the companies because they are paid by the company. These commissions we trust because they are for us,” Maphosa said.

Unki continues to shine

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Anglo American Platinum Limited (Amplats) owned Unki’s mining performance continues to impress, Amplats production report for the third quarter report has shown.

Anerudo Mapuranga

The group said that it is expecting to see an increase to 50,000 platinum group metals (PGMs) ounces increase per annum and projecting monthly tonnes milled increase from c.175 kilotonnes per month to c.210 kilotonnes per month.

However, during the quarter under review, Unki Mines, PGMs production decreased by 29 per cent to 42 500 ounces, negatively impacted by scheduled integration of a debottlenecking concentrator. Platinum production at Unki went down by 30 per cent to 19 000 ounces while palladium production decreased by 30 per cent to 16 600 ounces.

“At Unki, PGM production decreased by 29% to 42,500 ounces (platinum production decreased by 30% to 19,000 ounces and palladium production decreased by 30% to 16,600 ounces), owing to the scheduled integration of the concentrator, following the completion of the concentrator debottlenecking project.

“Mining performance continued to perform well, leading to a build-up of ore tonnes ahead of the concentrator which will be processed in 2022. The debottlenecking project should see monthly tonnes milled increase from c.175 kilotonnes per month to c.210 kilotonnes per month, leading to a ~50,000 PGM ounces increase per annum.” The group said.

According to Amplats Chief Executive Officer Natascha Viljoen, the completion and successful integration of the debottlenecking project at Unki demonstrates how the company is eager to maximize value from the mine.

“We have delivered a strong safety and production performance in the third quarter, with our own-managed operations being fatality-free for the year to 30 September 2021. I am particularly proud of the commitment and dedication our teams across the operations have shown in limiting the impact of Covid-19 on our employees, communities and workplace safety, as illustrated by the significant improvement in our safety record, including in relation to recordable injuries. However, we will not rest until we achieve zero harm across our business.

“The completion and successful integration of our debottlenecking project at Unki demonstrates how we are maximising value from our portfolio of high-quality assets, resulting in an annual run-rate increase of 50,000 PGMs ounces. Similarly, the strong performance of the ACP shows the increased resilience we are embedding across our business, with operational stability our major focus,” she said.

Unki Mine is considered integral to the Minister of Mines and Mining Development Hon Winston Chitando’s vision for the mining industry to become a US$12 Billion sector by 2023 with platinum expected to fetch an annual revenue of US$3 billion annually.

Chitando has been constantly quoted saying that the vision was being achieved day by day, the performance by Unki is therefore proof enough that there is indeed light at the end of the tunnel.

Production costs going up in ZWL

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The large-scale mining sector has been hard hit stubbornly by the cost of production, labour and materials due to the current foreign currency retention offered by the government which is not viable, Mining Zimbabwe can report.

Anerudo Mapuranga

The large-scale producers have lamented about the current foreign currency retention which is at 60% as the elephant in the room that is negatively impacting production significantly.

According to Freda Rebecca Managing Director Mr Eliakem Hove, primary producers were pushing for the government to give the miners 100% forex payment.

He said that the 40% Zimbabwean dollar component is aiding the increasing cost of production.

“Our position as the Chamber as well as Freda Rebecca 60/40 is not adequate we would actually want 100%, worst case 80/20. The Zim dollar component increases your cost currently sitting around 60% when trading, 60/40 is putting pressure on our side,” Hove said.

In a trading update, Bindura Nickel Corporation secretary Conrad Mukanganga said the adverse impact of the cost of local inputs and the increasing disparity between the auction foreign exchange rate, at which the company surrenders 40% of its revenue for Zimbabwe dollars, and the prevailing parallel market rate battered the miner.

He said the unit cost of production increased significantly due to the higher costs incurred in the quarter, as a result of the adverse impact on the cost of local inputs of the increasing disparity between the auction foreign exchange rate, at which the Company surrenders 40% of its revenue for Zimbabwe dollars, and the prevailing parallel market rate.

According to the Deputy Chairperson of the Geological Society of Zimbabwe Mr Kennedy Mtetwa operational costs in local currency are increasing due to high inflation on the parallel market and the failure by the central bank to provide all suppliers with the required foreign currency.

“Production costs going up in ZWL yet exchange rate for 40% is staying the same,” said Mtetwa

Recently, diversified mining group RioZim during the first quarter of 2021 said it did not benefit from a 12% increase in average gold prices due to the reduction of gold foreign currency retention threshold from 70 to 60% by the central bank.

The miner said the retention threshold impacted negatively on gold production by 10%.

Zimbabwean large scale miners are paid 60% of their gold submissions to Fidelity Printers and Refiners (FPR) in USD and 40% in the local currency which of late is on a downward trend on the parallel market. Equipment suppliers and local service providers peg their prices at the prevailing parallel market rates which currently is at ZWL180 against 1USD. The official Foreign Exchange Auction Trading System rate is currently pegged at ZWL86.0551 against 1USD as of 31/08/2021 a rate criticized for being unrealistic as foreign currency allocation isn’t available to everyone.

Why gold smuggling is rife in Zimbabwe

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The mining industry in Zimbabwe plays a significant role in the development of the country as it brings in foreign currency, contributes to government revenue and provides for infrastructure development.

Dumisani Nyoni

Since 2009, the mining sector has become the fastest growing with both small-scale mining companies, artisanal miners and multinational companies taking part in the gold rush.

However, due to illicit financial flows, the southern African nation has been losing billions of dollars through gold smuggling into neighbouring South Africa, the United Arab Emirates among other countries.

For instance, just recently, a 33-year-old Zimbabwean man was arrested at O.R. Tambo International Airport in Johannesburg on May 8 2021 with smuggled gold worth R11 million (about US$730,000).

Tashinga Masinire flew into one of Africa’s busiest airports with 23 pieces of gold which he did not declare, and when challenged “he did not have any permit or licence to be in possession to transport gold.”

Gold smuggling is estimated to cost Zimbabwe US$100million each month, according to Home Affairs minister Kazembe Kazembe.

Cumulative gold output for the first quarter of 2021 stood at 4 311kg, about 13% of the annual target and lower than the comparable period in 2020, largely weighed down by low deliveries from the Artisanal and Small-scale Gold sector (ASGM), according to Finance minister Mthuli Ncube.

Large scale producers delivered about 2 291kg during the period under review, about 11.2% above the same period in 2020, while ASGM delivered 1 586kg, about 55.6% below the same period in 2020.

“This points to possible incidences of side marketing and smuggling (leakages) of our minerals,” Ncube said in his mid-term budget review.

Why gold smuggling

There are several reasons why gold smuggling is rife in Zimbabwe. Kleptocracy, a broken gold pricing system, payment delays are among other main reasons.

FPR an arm of the central bank with a monopoly on buying, refining and exporting Zimbabwe’s gold has a history of struggling to pay gold miners on time, citing foreign currency shortages.

Payments sometimes take weeks yet miners would want to buy consumables like fuel, explosives, detonators, drill steels, capped fuses, among others.

This, therefore, encourages miners to sell unscrupulous buyers who pay instantly.

FPR has tried to offer export incentives to miners, encouraging them to deliver as much gold as possible through the official channels with little success.

Gold miners are paid in US dollars, a much more stable currency than the ever depreciating Zimbabwean dollar.

Miners were legally obliged to sell 40% of their earnings to the central bank at the official exchange rate but that obligation has been removed to lure miners to bring gold to FPR.

The Centre for Natural Resource Governance says poor gold prices offered by FPR were fueling smuggling. Hence, to curb smuggling, the issue of gold prices should be addressed.

The poor price is the result of FPR using a mix of United States dollars and Zimbabwean dollars to pay for precious metals.

“The main problem is that FPR underpays and sometimes pays late for gold. The body pays producers partially in U.S. dollars and partially in amounts of Zimbabwe dollars determined by the official exchange rate,” says Crisis Group Africa Report titled: All That Glitters is Not Gold: Turmoil in Zimbabwe’s Mining Sector.

“But in the open market, the Zimbabwe dollar is worth less than half its official value. The discrepancy creates a gap between the price FPR pays and the world gold price, which is denominated solely in U.S. dollars.”

A report titled: Illicit gold markets in east and southern Africa by the Global Initiative Against Transnational Organized Crime (Global Initiative) reveals that gold buyers were selling between 10% and 30% of their gold to the FPR only to maintain their gold licences, with the rest being sold on the illicit market.

Major foreign buyers, often from South Africa, partner with Zimbabwean dealers to buy large quantities of gold on the illicit market, the report says.

Government officials have been also accused of having a hand in the illicit trade and smuggling gold out of the country.

The other issue fueling gold smuggling is the delay by the government to issue out mining licenses. When someone is not licensed, he/she would not risk selling gold to FPR, for fear of being arrested.

A limited number of gold centres across the country also fuels gold smuggling. Chegutu a well-known hub of gold activity does not have an FPR buying centre relying mainly on gold buying agents who are also known to be proponents of gold leakages.

Miners would rather sell their gold on the illicit market rather than travel long distances searching for FPR gold centres. FPR should establish more gold centres across the country especially where gold activities are concentrated.

The Ministry of Mines and Mining Development last year revealed plans to establish gold centres across the country to curb illegal leakages of bullion and promote the official sale to the state buyer FPR.

But presenting his mid-term budget review, Ncube said so far only five sites for service centres have been established.

The Zimbabwe Miners Federation (ZMF) has been calling on the government to expedite the setting up of gold service centres across the country to boost the production of the yellow metal.

How gold leaves the country

Global Initiative says smugglers are hiding smaller quantities of gold in clothing and headdresses, while larger amounts are stowed away in car glove compartments, spare wheels and any other parts of a vehicle that can be modified for smuggling purposes.

“Similarly, in Southern Africa, gold is easily smuggled from Zimbabwe into South Africa. Porous land borders make it easy for criminal groups to cross into South Africa where laundering opportunities and transport services are more readily available,” the report reads in part.

“While there are informal border crossings, the official Beitbridge border post remains a preferred route for gold smugglers. Smaller quantities of gold are hidden in clothing and headdresses, while larger amounts are stowed away in car glove compartments, spare wheels and any other parts of a vehicle that can be modified for smuggling purposes.”

On the Zimbabwe-South Africa border, both bus drivers and truckers are reported to smuggle gold.

Bars weighing between five and 20 kilograms are stuffed underneath truck cabins, inside battery compartments and emptied gasoline tankers.

“As a result, some major buyers have invested in both gold and trucking. For example, certain major gold dealers in Harare have invested in the gas business, enabling the use of gas haulage trucks with secret compartments to smuggle gold into South Africa,” it said.

On the borders, there appears to be a lack of capacity and will to stop gold smuggling.

For example, in Zimbabwe, only luggage is subject to scans by customs officials so travellers without luggage are unlikely to be searched, the report says.

The report also reveals that larger smuggling operations will also involve collusion between criminal actors and border officials.

Nearly 40% of gold mined in Matabeleland is believed to be smuggled directly to South Africa, it said.

In 2015, the Reserve Bank of Zimbabwe (RBZ) reported that the border was contributing to “… the most [gold] leakages that the country has ever experienced.”

The ease in which gold can be moved over the border makes it difficult to catch smugglers, Global Initiative says.

“It is reported that a smuggler will only be caught if the police have received a tip-off but they can easily pay a bribe to allow them to continue across the border.”

In other instances, the report revealed that gold is moved to South Africa through Botswana to avoid the heavily congested Beitbridge crossing.

A significant and growing amount of gold is also believed to be flown out of Harare airport to international transit and destination hubs, particularly the UAE, China and India and, to a lesser extent, Russia.

This route is suspected to be used by more powerful gold dealers and political elites.

“Indian buyers are allegedly the most likely to smuggle gold in this manner. There are also small gold flows between Zimbabwe and Mozambique in border regions, but the direction of the flows is unclear,” the report says.

What can be done to curb gold smuggling

As part of the recommendations to curb smuggling, the government must establish more gold centres across the country to curb illegal leakages of bullion and promote the official sale to FPR.

RBZ governor John Mangudya recently revealed that Zimbabwe was drafting legislation that will compel small-scale gold miners to register their operations as the southern African nation seeks to curb gold smuggling.

Hopefully, this would help.

FPR should also offer competitive prices.

Global Initiative suggests that criminal investigations should target the activities of key actors in the illicit gold trade, including senior government officials.

This could include increased support for financial intelligence units and financial investigations. By providing information and support, foreign governments and international law enforcement bodies can support efforts to identify and prosecute key individuals, companies and financial institutions linked to or involved in the illicit gold trade.

It also said law enforcement, including customs officials, can also target enforcement activity at major transit points.

Because international airports are key bottleneck points in supply chains, effective policing there will have a significant impact on illicit gold flows, it said.

“In addition, smugglers tend to favour major border crossings when moving large amounts of gold. Targeting key road border crossings may therefore also reduce the ease with which gold is smuggled out of source countries.”

“Private sector actors, in particular refinery and smelter-level programmes, should strive to responsibly source gold from source countries, as opposed to refusing to source product from high-risk areas or disengaging from artisanal and small-scale gold mining (ASGM) entirely,” the report says.

It said increasing the number of ASGM sourcing options will help to grow and regularize responsible ASGM gold supply.

Global Initiative also recommended that enforcement should also focus on transit and trade hubs, particularly the strengthening of enforcement controls at airports.

Mines and Mining Development Ministry’s slow pace of issuing mining titles is also a major contributory factor as it forces many to mine illegally which inturn diverts their gold to buyers who are most likely to push the commodity out of the country.