- January 20, 2020
- Posted in LOCAL
Amid socio-economic malaise facing Zimbabwe, mining is the only remaining silver lining.
The sector underpins the country’s socio-economic growth prospects. Gold which is expected to contribute US$4 billion, a third of the anticipated US$12 billion earnings from mining by 2023, undoubtedly, is strategic to the country’s development agenda. Central to the growth of gold production is Artisanal and small-Scale Mining (ASM).
The ASM sector eclipsed gold output from large-scale miners in 2017 and 2018, a trend which is likely to continue, judging by last year’s results. Latest gold delivery data from Fidelity Printers and Refiners (FPR) shows that, in 2019, ASM accounted for 63% (17,478.74kgs) of total gold deliveries (27,650.26 kgs) to FPR. Total gold deliveries to FPR declined by 16.72% in 2019 compared to 2018. Likewise, ASM gold deliveries to FPR dropped by 19.46% from 21.6 tonnes in 2018 to 17.48 tonnes in 2019. FPR falls under the Reserve Bank of Zimbabwe (RBZ), the country’s sole gold buyer, refiner and exporter of gold.
According the Zimbabwe Miners Federation’s (ZMF) president, Henrietta Rushwaya, factors behind the plunge of ASM gold deliveries include but not limited to the unfavourable payment method, severe power cuts, and machete violence. In February 2019, the Monetary Policy Statement reduced foreign currency retention ratio of ASM gold deliveries from 70% to 55%.
Because of general preference of the US dollar over the unstable new domestic currency, Artisanal and Small Miners (ASMers) divert part of their gold to the black market which pays 100% in USD said the ZMF president. ZMF is a mother body of all associations representing artisanal and small-scale miners (ASMers) in the country.
Gold smuggling, poor policy environment and rampant violence caused by machete wielding gangs in ASM casts doubt on sustainability of anticipated socio-economic development hinged on gold production. Over the years, authorities appeared to have taken a backseat whilst chaos, violence and other forms of conflict were festering in ASM.
Now, the violence appears to be malignant in most key gold producing districts, frequently flaring up on closed gold mines and gold rush hot spots. As the Zimbabwe Environmental Law Association (ZELA), a public interest organisation whose DNA is natural resource governance, we are deeply concerned with sustainability of ASM. A sector envisioned by the Africa Mining Vision (AMV) as an integral part of sustainable rural socio-economic development.
In light of climate change induced challenges which have ravaged agriculture, ASM has emerged as a fundamental source of livelihood for many Zimbabweans. ZELA, therefore, is challenged to unpack the drivers of violence, its implications and key options for stakeholders to help to end the malignant violence in ASM.
What is behind the violence?
Why paint ASMers and machete wielding gangs with the same brush?
Sophia Takuva, a woman ASMer operating in Zvishavane, explains: “There is a difference between ASMers and machete wielding gangs. The machete welding gangs are not miners, they are criminal who rob ASMers of their gold, gold ore, money or dislocate ASMers from their prolific gold sites.”
She illustrates her point by referring to a recent attack on youth miners operating under tributary arrangements with Sabi Gold Mine Zvishavane. A tribute arrangement is when a third party is given permission to mine by a claim holder in exchange of a royalty fee. Under Section 285 of the Mines and Minerals Act [Chapter 21:05] tribute agreements must be registered with the Ministry of Mines and Mining Development (MMMD). Upon learning that the young miners in Sabi were getting good gold grades, in December 2019, machete welding gangs attacked and robbed the youth of their gold ore. The helpless youth were forced to load the gold ore into trucks.
The ZMF president is worried. “Instead of viewing ASMers as victims, the police, policy makers, media and the public unfairly label them as perpetrators of violence. Painting ASMers and machete gangs with the same brush affects thousands of genuine miners who are striving to earn decent living in these tough economic conditions.”
Her fears were confirmed when the Zimbabwe Republic Police (ZRP) imposed a ban on so called illegal mining activities on 1 January 2020 after the killing of a police officer in Kadoma by a machete-wielding gang. Of course, calls for a distinction of ASMers and violent criminals must not be blind to the fact that within the sector, some elements are using violence to unfairly and illegally displace other miners from prolific gold sites.
Another dimension of criminality by gangs is forced labour.
“A relative of mine who went missing in Hatfield, 28 January 2019, was kidnapped and forced to work at Jumbo Mine in Mazowe for about two months,” according to one woman, whose nephew was kidnapped. She chose to remain anonymous. She explained further: “After being given some food and water, they would be forced to work underground for three days and then haul their ore to the ground. If one fails to bring ore, a punishment was meted out in the form of a thorough beating. Early April 2019, he was lucky to escape. Although Jumbo Mine is guarded by the police, they are bribed to facilitate access to the closed mine.”
Lethal combination: Gold, dollars and criminals
Persistent currency woes have propped up the significance of gold as a substitute currency. Having failed to sustain a multi-currency regime which was established in 2009 to barricade the economy against hyperinflation, a decade later, government introduced a domestic currency. Officially, it is now illegal to buy or sell goods and services using foreign currency.
Consequently, most of the citizens have been hit hardest as they have limited access to foreign currency. However, the informal sector still prefers to transact in foreign currency, particularly the United States Dollars.
Notably, remittances from the Diaspora are playing a significant role but not enough to cushion citizens whose purchasing power has been severely eroded by loss of value of then domestic currency against the USD. Since digging for gold is almost synonymous with USD earnings, more and more people have been attracted into Artisanal and Small Scale (ASM).
“Criminals too, have found ASM to be a lucrative hunting ground,” according to Shamiso Mtisi, ZELA’s Deputy Director and Kimberly Process (KP) civil society coordinator. It is not only about the USD; climate change is disrupting production in the agricultural sector, thereby pushing more and more people into ASM, now a prominent source of livelihood in rural areas and some urban areas said Shamiso.
Chaotic title admin system fueling conflict
Repeated efforts by government to modernise the mining cadastre system – the award and administration of mining title have remained fruitless to date. The old system being used is prone to manipulation and mistakes leading to double allocation of mining claims. Consequently, disputes are a common feature especially when gold rushes occur with two or more people claim ownership. The disputes can easily spill into violence as people fight to secure access of prolific gold areas.
The use of gold dictators has made it easier to illegally prospect and discover gold. Once the gold is discovered, advanced use of social media especially WhatsApp allows information to be spread easily. Illegal gold buyers who are aware that they can easily get huge amounts of gold within a short space facilitates the movement of violent gangs to control access and guarantee gold supplies.
The illegal gold buyers normally provide transport, food and alcohol to violent gangs including protection from arrest as they can bribe the police. During the anti-corruption day, Thursday 19 December 2019, the President disclosed that he was approached by a gold buyer in Dubai who revealed that he was buying USD$60 million worth of gold in Zimbabwe from the black market. This shows that the gold mining sector in Zimbabwe’s quite susceptible to transboundary organised crime which has no respect to the rule of law and can easily contribute to violence and other illicit behaviours.
Politics, greed and violence
Philemon Mokuele, the Secretary of ZMF’s General Council, narrates how some senior politicians in Matebeleland South are behind chaos and violence in ASM. In 2018, the West Nicholson Youth In Mining group received a tribute from Farvic gold mine in Gwanda which was registered with the Ministry of Mines.
When they started to get some good gold grades, senior politicians from ZANU PF negotiated to join the West Nicholson Youth In Mining Group. The senior politicians did not like the terms and conditions they were given. They then teamed up with youths from the party to invade the tribute and used their influence to ensure that the police do not intervene.
Philemon’s story is not an isolated incident. ZELA has noted several cases in which senior politicians from ZANU PF abuse their powers to facilitate and control access to prolific gold sites in a manner which ferments conflict and violence.
These cases were noted during the district, provincial and national alternative mining indabas, the social accountability platforms established to promote good mineral resource governance.
Who will guard the guards?
Newspapers are awash with stories of the involvement of police and military officers in ASM. In Bubi, 17 police officers were arrested for illegal gold mining activities, a story reported in the Chronicle, 28 January 2017. The NewsDay of 10 October 2019 reported a story in which the Minister of State in charge of Security, Owen Ncube, was implicated in machete violence, saying “artisanal miners had been boasting that they are linked to the Minister and were untouchable.”
Given that the security officers have their fingers in the pie, who will guard the guards? “When gold rushes occur, the police quickly move in under the guise of restoring order and then proceed to control access to the mining areas,” said a community member in Silobela.
No-questions-asked policy fuels violence
RBZ is buying gold on no questions asked basis, which is not aligned with the Gold Trade Act. This was a measure introduced by Treasury through the 2014 National Budget Statement. It was a stop gap measure meant to facilitate the registration of artisanal miners. It is almost six years now since the introduction of buying gold on no questions asked basis. Tellingly, government has been tight-lipped on progress recorded.
“…ONE CAN EVEN KILL TO SECURE GOLD AND EASILY SELL IT TO FIDELITY, NO QUESTIONS ASKED…”
Instead of leveraging this moratorium to promote registration and formalisation of artisanal miners, chaos, conflict and criminality are festering. What this means is that one can use violence or even kill to secure gold and easily dispose it to FPR without any questions asked. The Know-Your-Client rules which allow traceability of gold have been set aside.
Government has also been hesitant on re-joining the London Bullion Market Association (LBMA) after dropping out in 2007 for failing to produce the 10 tonnes of gold required for membership. It is key to note that in 2012, gold production surpassed the 10 tonnes required to join LBMA. Currently gold from Zimbabwe is being refined in South Africa as Zimbabwe lacks international accreditation.
Implications: Investors think twice
Failure to distinguish ASMers from machete gangs will lead to a wrong diagnosis which will affect the livelihoods of roughly a million people that are directly depend on ASM. The effects are already showing as ZRP has moved to ban the so-called illegal mining activities after the death of one of its offers.
Because of increased violence in ASM, the Zimbabwe is open for business agenda might have suffered a huge dent in the eyes of local and international investors and the market who are keen on responsible mineral supply chains.
Themba Sibanda, chairperson of Zvishavane-Mberengwa small scale miners, cautions: “Violence is making local investors to think twice about venturing into ASM. Even players that are in the sector fear discovering and exploiting high grade ore as this can spell trouble by attracting machete gangs.”
“IN THE GREAT LAKES REGION, MINERALS HAVE HELPED TO FUND CONFLICT AND WARS. ZIMBABWE IS FRAGILE…”
Internationally, mineral resource governance frameworks like OECD guidelines on due diligence for responsible mineral supply chains means that investors and the market will most probably shy away from increased risk associated with gold mining in Zimbabwe. The net effect is that government’s drive to achieve US$4 billion annual earnings from gold mining by 2023 will be scuttled.
In the Great Lakes region, minerals have helped to fund conflict and wars. Zimbabwe is fragile. There is a high risk that some factional elements within ZANU PF or others that lost out during change of government in November 2017 can use gold to try to finance a violent change of government. Without order, as cautioned by the Financial Action Task Force (FATF), minerals such as gold and diamonds can easily be used to finance terrorism and as havens for money laundering.
Arrest gangs, not miners
The police must target criminals, the machete gangs, not ASMers. Government must not ban artisanal mining but promote decriminalisation of artisanal mining, an important source of livelihoods for millions of people in Zimbabwe. A special permit for artisanal mining proposed by the mining technical working group on the ease of doing business offers a great starting point.
A multi-stakeholder committee must be established to probe violence in ASM. Further, a sustainable multi-stakeholder engagement platform dialogue on ASM which involves relevant government ministry, political parties like ZANU PF, industry, the security sector, civil society and ASM associations must be established.
Government must move with speed to improve mineral resource governance in Zimbabwe in line with the aspirations of the Africa Mining Vision and other international frameworks such as the OECD guidelines on due diligence for responsible mineral supply chains, and to re-join LBMA.
This entails computerising the mining cadastre system, implementation of the Extractive Industry Transparency Initiative (EITI), having a distinct ASM policy and legal framework which enables sustainable development of the sector.
Despite the bad image attached to ASM by machete gangs, it is critical to remember that ASM is an integral part of Zimbabwe’s socio-economic development discourse. It creates employment, facilitates income generation and community enterprise development. The media must be encouraged to tell stories that do not ignore the tangible benefits associated with artisanal and small-scale mining.
It is important to reflect, how did we get here?
The wanton violence and killings by machete wielding gangs in ASM areas appears to be malignant. Government certainly failed to prevent danger at its embryonic stage roughly five years ago. The involvement of powerful and greedy politicians, the security officers who have their fingers in the pie, the role of technology in fuelling gold rushes, and the growing currency woes, are some of the factors which conspired to cause a lukewarm response to this violence.
At a time when the gold price is surging, the spike in violence in ASM is causing irreparable damage to government’s quest to open Zimbabwe for business. Despite all this negativity, we must not forget; the ASM sector has huge transformative potential to local and national economy – employment creation, income generation and community enterprise development are some of the benefits that can be reaped from ASM_NewZwire