Illegal gold dealers under investigation

Source: Illegal gold dealers under investigation | The Sunday Mail February 4, 2018

Fidelity Printers and Refiners is investigating registered gold buying agents amid indications of rampant black market dealings which could be prejudicing Zimbabwe of millions of dollars.

Responding to inquiries from The Sunday Mail regarding such agents (names supplied), FPR general manager Mr Fradreck Kunaka confirmed they were probing the illegal activities to bring sanity to the gold sector.

Gold is among low hanging fruits President Emmerson Mnangagwa’s administration is targeting for quick wins as he sets about turning around Zimbabwe’s economy.

To this end, Mr Kunaka said terms and conditions for issuing gold buying licences had been tightened, while monitoring mechanisms were being strengthened.

This comes against a backdrop of some registered gold buying agents, particularly in Matabeleland and Midlands, buying a gramme of gold at $48 (bond notes) and US$38/gramme in cash.

This is in violation of FPR regulations, which require buying agents to pay 70 percent through bank transfer and 30 percent cash.

To secure gold, some agents are paying 100 percent cash and the gold is not forwarded to FPR because the agents are not issuing receipts.

Posing as gold sellers, our newscrew was offered cash by one of the gold buying agents who then refused to issue a receipt because FPR would then track them.

The agent said if they issued a receipt, the buying price would fall and they would pay 70 percent in cash and 30 percent through a bank transfer.

This lack of paper work means FPR is getting less gold than it should.

Mr Kunaka said, “We have also heard of those allegations, that quite a number of Fidelity Printers and Refiners gold buyers are serving the black market as well.

‘‘This is quite worrying even to us because such activities certainly hinder economic development.

“We are quite appreciative of the input from the media. Through our internal systems, we are also investigating the black market dealings of our gold buying agents. Further, we are tightening the terms and conditions of issuing the licences and reducing the number of agents.”

FPR, Mr Kunaka said, has set 6kg as the minimum for agents to deliver per month and if that is not met, the permit will be withdrawn.

“We are also looking at engaging custom millers not to sell the gold from their mills to anyone besides FPR. In order to achieve this, we are planning on ensuring that millers are well resourced in order to be able to buy all the gold processed at their mills,” he said.

Mr Kunaka added that FPR could ask the Reserve Bank of Zimbabwe to investigate transactions of suspected black market gold operators.

“We presume they are getting the bond cash from the black market because we currently do not have any special arrangement put in place for any of our agents.

“FPR satellite offices have been set up across the country to ensure that gold buying is decentralised and miners are able to dispose of their gold at the nearest centres at competitive prices.

“If agents are offering better prices, such explains the alleged parallel market dealings of the agents as there is no way they would sell such gold to FPR at a lower price than they would have bought it.”

Government is targeting production of 28 tonnes of gold this year.

From a peak output of 27,1 tonnes in 1999, official gold deliveries fell to 3,6 tonnes in 2008 and increased to 23 tonnes last year.