Porous borders make gold smuggling easy

Despite the government’s intentions to raise US$4 billion in gold revenue this year, a large amount of the mineral is allegedly smuggled out of the country, according to a parliamentary report on mineral security.

The leakages are caused by porous borders, poor enforcement by security officers, payment delays to gold producers, and illegal milling and mining operations.

Mining accounts for 60 percent of Zimbabwe’s export revenues but a report conducted by the Parliamentary Committee on Defence, Home Affairs and Security Services on the security of minerals: Illicit trading in minerals and mineral leakages confirmed leakages were prevalent particularly with gold as there were many players involved.

The committee noted porous land borders massively contributed to gold leakages.

“When the Committee visited Beitbridge Border post, it was informed by ZIMRA officials that there was a stretch of 230 kilometres of the borderline encompassing Zimbabwe, Mozambique and South Africa, which was poorly manned by law enforcement agencies in Zimbabwe,” read the report.

Along that borderline, there were over 15 well-known unregistered exit and entry points between the three countries.

“Smuggling was rife at these points and was a source of gold leakages among other commodities. The law enforcement agencies, which include the Zimbabwe Republic Police and Zimbabwe National Army were unable to control these illegal crossing points because they do not have vehicles and the roads are impassable,” read the report.

“In addition, there was no network coverage in these border lying areas, which made it difficult for law enforcement authorities to coordinate their efforts effectively along the border.”

The Committee noted that security forces requested vehicles, tents, drones, testing and communication devices and the establishment of a reaction team to arrest would-be smugglers. 

At official ports of entry, the Committee was informed by border officials they did not have modern scanners to detect gold, diamonds and other minerals that may be smuggled out.

“Officials at ports of entry have limited knowledge of the characteristics of minerals such as gold and diamonds. ZIMRA outlined it was in the process of recruiting a metallurgist and a geologist, so that they could be stationed at the land borders to assist in the identification and verification of minerals being exported or those confiscated for attempted smuggling,” read the report. 

The Committee also learnt of two attempts to smuggle gold out of the country at Robert Gabriel Mugabe International Airport in Harare.

“In the first case, the gold was intercepted before leaving the country and in the second case the gold was recovered at OR Tambo International Airport in South Africa. The major cause of the leakage was due to collusion by airport officials,” read the report.

The report also stated payment delays to gold producers were a challenge as small-scale producers said Fidelity Gold Refiners, the sole buyer of gold, takes more than one week to pay producers after surrendering gold.  

“This is not amenable to the economic well-being of small-scale producers, because they require their money in the shortest possible period,” read the report.

As a result, small-scale producers were selling their gold to unregistered buyers who offered cash upon delivery of the gold while the report added that gold smugglers prefer to sell gold in external markets where they are guaranteed cash payments and not bank transfers. 

“Therefore, buyers would then smuggle the gold out of the country using undesignated exit points and thus robbing the country of thousands of dollars.”

Another source of gold leakages was mining companies that have ownership wrangles.

“A case in point was Redwing Mine in Penhalonga which experienced an influx of illegal miners following a prolonged ownership wrangle. The committee had an opportunity to meet former workers, management of Redwing Mine and Better Brands. The former workers highlighted that a lot of gold leakages were happening through artisanal mining at the tributary granted to Better Brands,” read the report.

“The Committee was told by workers that there were over 800 pits and 400  hundred hammer mills operating in Penhalonga. In addition, there were many gold buyers, both registered and unregistered, operating in the area.”

The Committee learnt there were over 13 illegal crossing points into Mozambique and it was believed those routes were used to smuggle gold out of the country while workers there said the Ministry of Mines and Mining Development, police and Environment Management Agency (EMA) were struggling to handle the illegal mining, milling and trading activities happening in the Penhalonga area.  

“Local police stations have no vehicle for patrols and effective enforcement of the law. Fidelity Gold Refiners were not stationed at the mining site to facilitate the buying of gold. There were high chances of under declaration of gold produced and finally sold through formal channels,” read the report. 

The Committee could not rule out the possibility of under-declaration of gold at formal mines because there were no government officials at any of the privately owned gold mines in the country to verify or monitor production statistics at the source since “it was observed that the Ministry of Mines receives and accepts production statistics sent by gold mining companies in good faith.”

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