Source: Govt mulls probe into drop in gold output | The Sunday Mail
Michael Tome
Business Reporter
THE Government is mulling investigating the small-scale gold mining sub-sector to determine factors behind the sudden drop in deliveries by producers, amid fears of a resurgence in smuggling.
This follows revelations that gold production from small-scale miners has declined from an average of 60 percent of the national output to between 42 percent and 53 percent.
The Government this year set a gold deliveries target of 40 tonnes, up from the 30,1 tonnes achieved last year.
Gold is Zimbabwe’s largest export earner, followed by platinum and tobacco.
Between them, gold and platinum account for more than 50 percent of Zimbabwe’s export earnings, while mining in general constitutes over 75 percent of the country’s exports.
Gold leakages deprive the Government and the country of the much-needed revenue from taxes and royalties.
The leakages come at a time Zimbabwe was expecting to benefit from the prevailing international gold prices.
The Ministry of Mines and Mining Development continues to explore ways to curb leakages in the gold sector and other areas involving precious minerals like lithium.
Efforts to get a comment from Zimbabwe Miners Federation (ZMF) chief executive officer Mr Wellington Takavarasha did not yield any result as he did not respond to questions he requested be sent to him.
ZMF president Ms Henrietta Rushwaya could also not be reached for comment.
Mines and Mining Development Minister Winston Chitando told a gold mobilisation workshop recently that small-scale miners have been the biggest contributors to gold deliveries to Fidelity Gold Refineries (FGR) since 2020. But this is no longer the case.
Total deliveries declined by 1,9 percent to 8,4 tonnes between January and April 2024, compared to the same period in 2023.
Deliveries by small-scale miners to FGR dropped by 23 percent to 4 tonnes in the first four months of 2024, from 5,2 tonnes realised in the same period in 2023.
This represents 48 percent of the total gold haul delivered to FGR, from a 60 percent contribution over the same period last year.
Large-scale miners delivered 4,3 tonnes to FGR during the review period after a 26 percent increase from 3,4 tonnes achieved in the comparative period last year.
The buoyant performance by large-scale miners has been credited to expansion projects, the use of bioleaching technology for extraction of the yellow metal and bullish prices on global markets.
Minister Chitando told the workshop that gold held immense potential to anchor Zimbabwe’s economic growth, job creation and upliftment of Zimbabweans.
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“Over the years since 2020, small-scale miners have been the major contributors to gold deliveries to FGR; contributing more than 60 percent,” said Minister Chitando.
“However, for the year 2024, the contribution by small-scale miners has been ranging between 42 percent and 53 percent, which calls for investigations into the decline in gold deliveries. It is widely believed this is due to side marketing of the commodity.
“The key to realising this target is the plugging of side markets . . . By working together, we can ensure that every ounce of gold extracted within our borders contributes to the national good.”
Gold mobilisation, monitoring and surveillance are meant to boost gold deliveries to the legal market and increase its accountability by stakeholders.
The exercises are meant to continuously refine gold sector inspection procedures and create an innovative approach to examining processing plants at every production stage within the entire value chain.
Through gold mobilisation teams, the Government seeks to enhance compliance with the law within the country’s gold mining sector by encouraging artisanal and small-scale miners to formalise their operations and sell their gold through official channels.
On the compliance front, the mobilisation teams will ensure adherence to regulations throughout the gold mining value chain. This encompasses fighting illegal mining practices, preventing smuggling and promoting responsible environmental practices.
“Notably, this deployment will include the crucial task of collecting data on all hammer mills, leaching tanks, heap leaching pads and mobile gold processing units — equipment that has seen a significant rise in the provinces.
“This will not only benefit the nation but also provide these miners with greater security, better prices and access to vital resources,” said Minister Chitando.
According to the ministry, this data collection will empower the authorities to better account for gold produced, ensuring that all of it enters the formal system.
The 2024 gold mobilisation exercise will be conducted in all the country’s mining provinces.
Through various initiatives, the ministry has employed strategies to capacitate small-scale miners to enhance their production.
They include the establishment of gold service centres in Makaha, Mashonaland East, among other areas. Construction of the Mukaradzi Gold Service Centre is now at an advanced stage and it is set to be commissioned in December 2024.
The ministry has also introduced the Mining Industry Loan Fund to capacitate small-scale miners through the supply of equipment to improve their production standards and efficiency.
Further, while most exporters surrender 25 percent of their export earnings to the central bank, small-scale miners retain 100 percent of their earnings. This was done to boost deliveries to FGR.
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