Fidelity bust gold leak­age syn­di­cate

Sunday News (Zimbabwe) - - Front Page -

THE coun­try’s sole buyer, re­finer and ex­porter of gold, Fidelity Print­ers and Re­fin­ers (FPR) has in­ten­si­fied mon­i­tor­ing of elu­tion gold pro­ces­sors af­ter bust­ing a well or­ches­trated syn­di­cate in­volv­ing one of the units and a buy­ing agent in Bu­l­awayo that might have seen the na­tion los­ing mil­lions of dol­lars through leak­ages of the yellow metal.

In an ex­clu­sive in­ter­view with Sun­day Busi­ness on Thurs­day last week on the side­lines of the Bu­l­awayo Gold Min­ing Con­fer­ence FPR gen­eral man­ager Mr Fradreck Ku­naka con­firmed that a tip off by this pub­li­ca­tion last year led the com­pany to in­sti­tute an in­ves­ti­ga­tion lead­ing to the un­earthing of the scam in­volv­ing a Bu­l­awayo elu­tion gold pro­ces­sor (name with­held) that was hand­ing over part of the gold which should be di­rectly de­liv­ered to FPR to a buy­ing agent (com­pany name with­held).

The buy­ing agent sit­u­ated near the elu­tion plant later resold the yellow metal to the coun­try’s sole buyer, FPR, and it was re­warded with a com­mis­sion. Ac­cord­ing to doc­u­ments which Sun­day Busi­ness have, there were huge dis­par­i­ties be­tween gold pro­cessed at the elu­sion plant and that which was de­liv­ered to FPR, raising fears some of it could have been sold out­side the le­gal route.

For in­stance, in 2016, records show that min­ers de­liv­ered a to­tal of 11 952,14 kilo­grammes (kg) to the gold pro­ces­sor but only 2 834,40 kg was de­liv­ered to FPR in the month of Jan­uary, re­sult­ing in a vari­ance of 9 117,74kg and in Fe­bru­ary 12 431,54 kg was recorded to have been re­ceived by the gold pro­ces­sor but de­posits to FPR were 2 875,58 kg lead­ing to a vari­ance of 9 555,96 kg

“The in­ves­ti­ga­tion was done and it came out to be true that there was a buyer who surely was buy­ing gold from that par­tic­u­lar elu­sion plant, which (the ar­range­ment) has since been stopped to­gether with the en­force­ment agents, the min­eral and bor­der con­trol unit, the Min­istry of Mines and Min­ing De­vel­op­ment that ar­range­ment has been stopped,” said Mr Ku­naka.

Ac­cord­ing to the Gold Trade (Elu­tion Plants Con­trol) Reg­u­la­tions,

2006 Statu­tory In­stru­ment 63 of 2006, all the gold that is brought for pro­cess­ing at an elu­tion plant au­to­mat­i­cally must be sold to Fidelity Print­ers.

“That ar­range­ment where the elu­tion plant was sell­ing gold to a gold buy­ing agent was stopped and we now have our of­fi­cers in col­lab­o­ra­tion with the Min­eral and Bor­der Con­trol Unit mon­i­tor­ing ac­tiv­i­ties at that elu­tion. So they record what­ever is re­cov­ered at that mo­ment, which must be taken di­rectly to Fidelity Print­ers and not go through a gold buy­ing agent and that’s be­ing com­mu­ni­cated to all elu­tion plants that are known as now, that all mon­i­tored gold should not be sold to agents but must go to Fidelity Print­ers di­rectly,” said Mr Ku­naka.

The un­earthing of the sus­pected gold leak­age scam is un­likely to be an iso­lated case as min­eral leak­ages con­tinue to plague Zim­babwe, cost­ing the coun­try mil­lions of dol­lars in po­ten­tial rev­enue.

“It (scam) also could have re­sulted in po­ten­tial leak­ages . . . be­cause when that per­son de­cides to sell that gold to some other en­tity that is not prin­ci­pal (FPR) then it be­comes a prob­lem, then this is now the Min­er­als and Bor­der Con­trol Unit, which is man­dated to en­force the law will then come in.

“We can only en­force cer­tain things, if

there is any il­le­gal deal­ing, we in­form the Min­eral and Bor­der Con­trol Unit who are the law­ful agent of Gov­ern­ment who deal with such anom­alies to investigate any il­licit deal­ings and if there are any il­licit deal­ings they can then pros­e­cute,” said Mr Ku­naka.

Mean­while, Mr Ku­naka also ac­knowl­edged that the com­pany had en­gaged Lon­don Bul­lion Mar­ket As­so­ci­a­tion (LBMA) with a view of be­ing read­mit­ted to trade its gold on the world’s prime met­als mar­ket. He, how­ever, said LBMA might be drag­ging its feet to re-ad­mit the coun­try largely due to the sanc­tions im­posed on it by the United King­dom (UK).

“We have en­gaged the LBMA but you can also ac­knowl­edge that this is a com­pany or as­so­ci­a­tion that is based in the UK of which the UK had bad re­la­tions with the (pre­vi­ous) Gov­ern­ment. So given this new dis­pen­sa­tion, which is try­ing to nor­malise re­la­tions with the in­ter­na­tional com­mu­nity we are now also see­ing that hope to be able to start the process of re-ac­cred­i­ta­tion be­cause in terms of the tech­ni­cal side of things we are al­ready up to stan­dard. It’s only is­sues that em­anate from the fact that LBMA is of the view that we are also un­der sanc­tion,” said Mr Ku­naka.

The coun­try was ejected from the LBMA in 2008 af­ter gold out­put plunged to three tonnes per year and since then Zim­babwe has been mar­ket­ing its gold through a third party — South Africa’s R and Re­fin­ery which is charg­ing a

com­mis­sion of 0,3 per­cent. @DNsingo

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