- April 15, 2020
- Posted in LOCAL
The Zimbabwe Environmental Law Association has called for the elimination of gold trade distortions that have persisted during the Coronavirus lockdown, to improve revenue flows into the country’s coffers.
ZELA released the second edition of its weekly Covid-19: Mining Sector and Communities’ Situational Report (SIT-REP) where it noted that due to the fluctuating gold prices small scale miners now prefer the black market.
The report also highlighted that although gold prices have drastically fallen on both the formal and informal market, small scale miners are shunning the government sole buyer Fidelity Printers and refiners (FPR) for part payments in local currency.
The government was urged to scrap payment in the unstable local currency in order ‘to curb criminality, arbitrage, corruption, illicit financial flows and trade of gold on the black market by ASM players’ and effectively increase gold supply.
ZELA’s weekly Situational Report is compiled from updates obtained through a network of 200 community monitors, covering Rwanda, Shurugwi, Zvishavane, Bubi, Penhalonga and Marange focused on women miners, artisanal and small-scale miners and diggers, villagers and mining-affected communities.
“The impact of COVID-19 has been felt in the ASM sector through the uneven, unstable and fluctuating low prices being offered by gold buyers. As on the 6th of April 2020, miners who sold gold to FPR in Harare got US$47 per gram, although the FPR price would be subjected to the 55% in US$ and 45% in RTGS policy.
“This means effectively FPR will be buying at more or less than US$24 per gram. On the other hand, black market buyers were buying at US$39 per gram in Harare, and US$36 per gram in Chinhoyi. All these, prices are lower than US$50 which was being offered before COVID-19 disrupted the supply chain.
“Due to price distortions and FPR policies, many ASM miners end up selling their gold on the black market which fetches a higher price than FPR,” said ZELA.
“To curb criminality, arbitrage, corruption, illicit financial flows and trade of gold on the black market by ASM players for improved revenue generation and allocation to the public health and other social service sectors, Government should scrap the 55% in US$ and 45% in RTGS system for payment to those who sell gold to FPR.”
ZELA also raised concerns over the lack of a prevention and containment strategy for the mining sector as well the impact on community livelihoods, human rights, social well-being, good governance principles and the economy.
It said citizens, must be prepared for any eventuality and government must lead these efforts as currently ‘most provinces and districts lack adequate resources, equipment and health facilities to deal with any cases or to educate the public.’
ZELA also raised concerns over the vulnerability of artisanal miners that ‘work in groups, in crowded gold outcrop areas in gold mining areas without water, toilets and other basic sanitation facilities.’
“Therefore, our concerns on the current situation in Zimbabwe on COVID-19 are (twofold) the adoption of prevention, containment and treatment systems and procedures for mining communities in case COVID-19 reaches a high apex in the country and the impact on community livelihoods, human rights, social well-being, good governance principles and the economy. Communities and citizens have to prepare for any eventuality.
“While the ASM sector is a critical sector in gold production, accounting for more than 60% of total gold deliveries to Fidelity Printers and Refineries in 2019, it is also a high risk sector from a safety, health and environment perspective-meaning that COVID-19 is likely to massively affect production and the economy if it peaks in Zimbabwe.
“…there is need for more capacity building programmes for ASM players on safety, health and environment (SHE) to help remove the culture of non-compliance with public health, safety and environment standards and in particular use of PPE and applicable laws,” said ZELA.