Accelerating gold mobilisation initiative

THE adage that says we are too rich to be poor seems apt to describe Zimbabwe’s low levels of economic growth against reportedly holding one of the world’s largest gold reserves. In 1980, we were the second largest producers of gold in Africa after South Africa. Today we are ranked number 14 and selling our gold via a third party, Rand Refinery. Out of the huge reserves underground, Dr John Mangudya, the Reserve Bank Governor, says since 1980 we have extracted no more than a 1 000 tonnes. At the pace we are mining our gold, we will take thousands of years to make a dent to our God-given resource.

While Government must indeed be commended for its efforts particularly over the past two years for working on programmes that enhance gold deliveries, a lot still needs to be done. In 2016, we had a fair upsurge of gold deliveries to Fidelity Printers and Refiners (FPR) achieving 21 tonnes out of a target of 24 tonnes. Small-scale miners contributed 45 percent of that figure delivering 9,7 tonnes as compared to 2015 figures of 8,4 tonnes and 3,9 tonnes in 2014.

The national goal for 2017 is 27 tonnes inclusive of the gold in PGMs. However, given the incessant rains that befell the country at the beginning of the year, if we continue at this pace, indications are that at most we will just attain the national goal.

Research has also revealed that smallscale miners and artisanal miners (ASM) in Zimbabwe produce on a monthly basis between 2-3 tonnes of gold. August 2017 figures released by FPR show an upward trend of deliveries from the ASM sector who have now overtaken large scale producers, by contributing 1,4 tonnes against their larger counterparts whose deliveries over the period were 1,1 tonnes.

Sadly, despite this positive development, it is also evident that the ASM is not delivering its entire produce to FPR. An estimated 700kg of gold is being smuggled out of the country. This in turn is prejudicing the country of a monthly estimated figure of between US$28 to 60 million. This amount is sufficient to cater for the required import demands for fuel and other critical national requirements.

In an effort to address the challenge of gold leakages, FPR has embarked on a drive to bring together stakeholders who are involved in ensuring that all gold produced in the country is delivered through formal channels. The exercise also involved FPR examining its own practices. These relate to its pricing mechanism and the efficacy of its agency network. On both issues, progress is slowly being recorded. As of this week, FPR working with the Reserve Bank of Zimbabwe, extended the 5 percent export incentive scheme to the ASM sector on condition that they accept that part of their gold proceeds are paid through the banking channels.

What has been happening is that the ASM sector has been demanding its entire payment in the form of cash. This has affected efforts to ensure that money generated from gold sales is available for other areas of national priority. There is also a possibility that some unscrupulous players have used the same cash to fuel the black market. As such integrating ASM sector into the banking sector will be a noble idea.

FPR field agents, who form the bulk of the support structure for accessing gold especially from the ASM, have over the years withheld some of the gold preferring to channel it to the parallel market. Due to weak monitoring mechanisms, this shortcoming has been going on for a while.

Some of the FPR agents have also failed to adhere to the key conditions of the gold buying permit renewal that stipulate that a minimum amount of gold has to be remitted to FPR. To address this, FPR is rolling out a number of initiatives to capacitate as well as improve both the monitoring and visibility of their operations.

Despite all the work that FPR will do, without the collaboration of other key stakeholders these efforts will not yield much. Gold by nature is a highly regulated multi-sectoral product. Zimbabwe Revenue Authority (ZIMRA), Environmental Management Agency (EMA), Ministry of Mines and Mining Development and Reserve Bank of Zimbabwe (RBZ), among others are all interested parties; each with sometimes competing needs that if not well coordinated can only fuel the underground economy.

The various stakeholders have mandates given to them by Acts of Parliament which they have to abide by. FPR takes cognisance of the various roles and mandates of the stakeholders that ensure sustainable nation well-being. In that vein, FPR lobbies for collaboration of the parties interested in gold so as to enhance gold mobilisation through the formal channels. Without collaboration, the goal of sustainable mining, enforcement of law and order, collection of taxes, formalisation of the ASMs and secure community livelihoods will not be achieved as most of the ASM sector players will retreat into the unregulated underground market.

The good news is that the Office of the President and Cabinet (OPC), led by Dr Misheck Sibanda, Chief Secretary, has chosen to lead efforts aimed at aligning the diverse stakeholder interests. This can only bode well for the country.

FPR has also chosen to improve communication with the miners who demand information on a variety of initiatives. This includes, information about loan and equipment scheme, pricing, availability of agents, operations of FPR and various other issues of their interests. This column is the first in a series that will be aimed at updating the nation on various developments within the gold sector. Keep tuned in and contribute to our national development.

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For more information contact : info@ fpr.co.zw