The Sunday News
Nkosilathi Sibanda, Business Correspondent
THE Government is set to tighten security measures to curb the continued smuggling of minerals out of the country, as it had realised that some gold miners now deal in the informal market, a situation that has deprived the country huge amounts of foreign currency.
Gold production in the country remains high but of late there has been a noticeable reduction in deliveries, according to statistics from the country’s sole buyer, refiner and exporter of gold, Fidelity Printers and Refiners (FPR) and the Ministry of Finance and Economic Development.
The increase in prices on the formal market have not lured miners to up their delivery, giving insights of smuggling and leakages on the production chain. For this year gold deliveries to Fidelity Printers were estimated at 27 958 kilogrammes, a figure that is way lower than the 2019 levels. Deliveries to FPR fell by more than 12 percent in the first quarter of this year compared to the same period last year, with part of the reasons attributed to leakages and smuggling.
A record of 6,5 tonnes of gold were delivered in the months of January to March in 2019 while 5,7 tonnes were received during the same period this year.
The Minister of Finance and Economic Development, Professor Mthuli Ncube said the Government is about to unleash a number of measures to nip the leakages in the bud. He said the Government will capacitate security institutions with resources to help curb the rampant illegal dealing of minerals.
“Government remains seized with mineral leakages which continue to deprive the country of substantial foreign currency inflows,” said Prof Ncube when he presented the 2020 mid-term budget review last week.
“Therefore, during the half of the year and going forward, the budget will expend more resources on capacitating security institutions engaged in monitoring and curbing mineral leakages. This will also prioritise the Minerals and Border Control Unit.”
Prof Ncube said although deliveries were low, the Government was hopeful that stakeholders in the gold mining sector will correct anomalies that lead to leakages.
“In order to increase gold deliveries, the Government continues to engage mining companies including small-scale miners on pricing and viability issues.”
He said among other measures to address gold leakages, there are plans within the Transitional Stabilisation Programme (TSP) to amend mining laws and attract investment.
“Priority policy areas to attain this target and other TSP benchmarks include reviewing and updating mining legislation, enhancing exploration and investment in mining. Furthermore, beneficiation and value addition of minerals to create more jobs and earn more foreign currency are priorities for the sector.”
He said the establishment of gold buying centres was seen as the best move to ensure all the country’s gold is delivered to the formal trading market. Gold service centres are formal market establishments where all the functions related to gold mining from extracting to processing and sales are co-ordinated from. One such facility is in Bubi.
“Government in conjunction with private investors is also establishing gold buying centres around the country and the Bubi Centre is already functional.”
Government has pointed out in recent months that the country is losing an estimated 34 tonnes of gold worth US$2 billion in value every year owing to leakages and smuggling.
