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Mzi Khumalo’s once prized gold asset now epicentre of looting by Zimbabwean elites

By Tumelo Nare

One of South African business mogul Mzi Khumalo’s former gold mines in Zimbabwe has become the new epicentre of looting by ruling Zanu PF elites and security sector bigwigs, investigations have revealed. 

Redwing Mine, which was part of Khumalo’s sprawling Metallion Gold empire, became a magnate for the shaddy syndicates linking to ruling party officials and state security agents after it was placed under judicial management in 2018. 

Located in Penhalonga in Manicaland province, the mine was one of the most profitable in the group, alongside Acturas, Shamva and How Mine. 

How Mine was the only one that was left operating normally after Metallion  reportedly lost US$132 million due to the Reserve Bank of Zimbabwe’s controversial foreign currency retention ratios. 

The central bank allows companies to retain a portion of their export earnings in foreign currency while the rest is paid in Zimbabwe dollars, arrangement experts say is pushing formal mining companies out of business. 

Following Metallion’s exit, a new company Prime Royal Mining (PRM), was given a short time contract to mine at Redwing in December 2019. 

The company allegedly contracted artisanal miners that invaded the area from as far as Shurugwi, Gweru, Kwekwe and Kadoma.

 It has opened the flood gates for illegal syndicates to scoop the gold, which observers say is not sold through formal channels while most of it is smuggled out of the country.

Close to 800 Redwing employees that had gone for years without receiving their salaries also joined the syndicates that are said to be controlled by Zanu PF bigwigs in the province and military chiefs. 

“The politically connected have been displacing other artisanal miners from the mining field,” says the Centre for Natural Resources Governance (CNRG). 

“There are reports that some artisanal miners have lost their gold rich pits and ore to syndicate leaders fronting political and security figures in the province.

“At one point, one losing (Zanu PF) parliamentary candidate from Manicaland Province, who owns an excavator operating in the gold field, reportedly grabbed 11 tonnes of gold ore from other artisanal miners over a dispute on use of the excavator.”

A senior Mines and Mining Development ministry official, who spoke to CITE on condition of anonymity, said the situation at Redwing was deteriorating to the levels of Gaika Mine in Kwekwe where Zanu PF gangs displaced investors before going on a looting frenzy. 

The illegal mining activities bankrolled terror gangs such as Al Shabaab that were blamed for violence against opposition supporters and ordinary people  before it spread across the country. 

President Emmerson Mnangagwa’s government was early this year forced to deploy security forces to track down the machete gangs after they started spreading their terror to all gold rich areas across the country.

“The situation around Redwing Mine and Penhalonga has become a serious cause for concern because of the threat to the environment posed by the illegal mining activities and the gold leakages,” the official said.

“It is difficult for the ministry to take any action because we have security commanders that are actively behind the syndicates as well as influential politicians in the province.” 

The artisanal miners are digging pits close to the Mutare-Plumtree highway and on the banks of Mutare River. 

Njazi Sabuneti, a councillor in Penhalonga, said the influx of the illegal gold miners is now causing insecurity in the area. 

Sabuneti said since PRM started operating Redwing Mine and the subsequent influx of artisanal miners, cases of muggings had increased and locals feared for their lives.

In a new report titled: Penhalonga Gold Rush Leaves A Trail of Destruction, CNRG said its own research established that some security chiefs were behind the illegal miners.

“CNRG established that in December 2019, some of the Joint Operation Command (JOC) officials in Manicaland Province held meetings at Redwing Mine to deliberate on the future of the company,” the report says.

JOC comprises of senior officials from the Zimbabwe National Army, Air Force of Zimbabwe, Zimbabwe Republic Police (ZRP), Zimbabwe Prisons and Correctional Services and Central Intelligence Organisation.

 “Some of the senior police officers in the province have since been allocated gold rich spots to extract the mineral without following proper regulatory procedures as required by law,” the CNRG report added.

“Politicians and other politically linked elites use power and political connections to access gold claims and parcel them to syndicates, which they manage.

“The closure of Redwing Mine offered an opportunity to political elites, the politically connected and securocrats, who with the aid of the organised syndicates, are exploiting the mine’s claims dotted around Penhalonga and Tsvingwe for profit without due care for the environment.” 

Authorities such as the Mutasa Rural District Council, the Environmental Management Agency and the Zimbabwe Republic Police are said to be powerless to take action because the people behind the syndicates are ‘untouchable.’

“The involvement of politicians has undermined the rule of law, stability and livelihoods of affected communities,” the CNRG report added.

“Corruption, sometimes coupled with intimidation and violence has become common. 

“CNRG investigations have revealed that the haphazard mining in Penhalonga has now taken the form of organised crime as the syndicates are interlinked and use corruption and violence to secure mining rights and resource rents.” 

It added: “There is a clandestine secretive consortium, which holds the strings of artisanal mining in Penhalonga.

“A senior government official only referred to as ‘mother’ has reportedly grabbed land close to the Liverpool residential area.

“She is also said to be a senior Zanu PF official in the province and selects her employees based on political affiliation.

CNRG says the politicisation of artisanal mining in Zimbabwe has resulted in the country losing over 20 tonnes of gold worth over US$500 million.

Home Affairs minister Kazembe Kazembe recently said Zimbabwe is losing US$100 million worth of gold every month through smuggling by criminal syndicates.

The white metal is the country’s biggest foreign currency earner and last year it raked in US$946 million from US$1.3 billion the previous year in export receipts.

A 2019 report titled: Pulling at golden webs on ‘combating criminal constortia in the African artisanal and small scale mining and trade sector’ by enact flagged Zimbabwe as one of the countries where the ruling elite has made the informal mining sector their preserve.

“In Zimbabwe, the benefits of (artisanal and small-scale gold mining) ASGM are not just enjoyed by high-level members of Zimbabwe’s ruling party but are also allocated to its core supporters,” says the report authored by Marcena Hunter.

“The result is a mutually beneficial relationship, with politicians seeking to gain the support of ASGM operators.

“This prevents members of the opposition party from engaging in the ASGM sector.

“This has particularly strong impact in Zimbabwe where gold is an important sector of the economy and few comparable alternative livelihoods exist, forcing individuals to support the ruling party in order to eke out a livelihood.” 

Hunter added: Hugh rates of corruption enable actors to exploit the gold sector with impunity and make it difficult for interventions such as those aimed formalisation, to penetrate the ASGM sector.”

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