Low prices, over-regulation blamed for poor gold deliveries

Low prices, over-regulation blamed for poor gold deliveries

via Low prices, over-regulation blamed for poor gold deliveries | The Source February 24, 2014

Millions of dollars would likely be lost through gold leakages due to low prices being offered by the central bank and  over-regulation of the sector, small-scale miners told Parliament on Monday.

Private gold buyers, mainly from South Africa were offering better premiums than Fidelity Printers and Refiners, a unit of the central bank,  members of the Zimbabwe Artisanal Miners and Small Scale Council (ZAMSC) told a Parliamentary Portfolio Committee on Mines and Energy.

Zimbabwe last month banned private gold sales, after previously allowing miners to independently export their bullion, mainly to South Africa in a bid to help ramp up production. But ZAMSC board member in charge of legal affairs, Paul Mangwana told lawmakers that criminalising side-marketing of gold would not improve deliveries.

“If it makes sense for South Africans to be buying gold at $42 a gramme and it doesn’t make sense for Fidelity to pay the same price, people will sell to the South Africans and you will make everyone a criminal,” Mangwana said.

“No amount of arresting will cure this issue. We can deploy a policeman to each miner but the gold will still leak. We just need to come up with financial packages which will encourage (the gold miners to sell to the state.)”

Mangwana also said there were 22 Acts of Parliament regulating the sector.

“There is no single coordinated approach on levies, you have got your rural district councils wanting their levy, you have got the Environmental Management Agency asking for different licences – licences to hold dumps, licences to hold cyanide, licences of all sorts. When you put all of them together, it will become very difficult for (small-scale miners) to make money out of mining.”

Mangwana suggested that the pieces of legislation be harmonised with the Mines and Minerals Act to ensure policy consistency.

ZAMSC president Wellington Takavarasha and Zimbabwe Mining Federation chairman Trynos Nkomo – told the same committee that government should also review mining royalties in the gold sector.

Zimbabwe produced an estimated 14 tonnes of gold in 2013 and is projected to reach 15 tonnes this year, well below the 1999 peak production of nearly 27 tonnes.

Deliveries in January amounted to 960 kg, almost 12 percent lower than the same period last year.

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