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Artisanal gold mining illegal yet thriving — Who benefits?

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ARTISANAL gold mining remains an illegal yet thriving practice along the gold-rich belts of Mazowe, Shamva and Norton.

MICHELLE CHIFAMBA

This investigation takes a close look at this seemingly neglected and illegal practice, policy vulnerabilities, as well as the government’s reluctance to legalise and formalise the trade.

In 2019, Finance minister Mthuli Ncube indicated that Zimbabwe lost between 30 tonnes and 40 tonnes of gold due to smuggling to South Africa every year.

The Zimbabwe Coalition on Debt and Development, a social and economic justice movement, says more than US$10 billion is lost every year due to illicit financial flows and smuggling.

Proper policies could take Zimbabwe to the top of the global gold market, promote economic development and create employment. This report takes a close look at the daily realities of artisanal miners and the policy inconsistencies that make them flourish.

In a country in which the majority of the working population ekes out a living in the informal sector, people risk their lives digging underground in search of the precious yellow metal.

In Norton, 40 kilometres west of the capital Harare, artisanal miners have broadened their search for gold ore as they continue to dig underground, at times as deep as 18 metres.

In West-band area, artisanal miners, with makeshift mining mills made of poles, metal and black plastic sheeting are scattered around. Their hope is for the government to regularise them as they contribute to the country’s gold production.

They could dig deeper, but without resources such as excavating machinery, explosives and shafts, they have to compromise.  

For the past two years, Denis Tevera (30 years) has followed the same routine: digging deep into the soil every day in search of the precious mineral.

Tevera, his co-workers and a number of other miners surrounding the mining compound are worried about their continued labelling as “illegal miners” and “makorokoza”.

“The names suggest violence — yet we are innocent and would want to make an honest living. If government could enable us to be formalised so that we could do our work without fear of being arrested. We silently contribute to the economic development of the country because after it (gold) has been sold, no one can tell how it was mined, either by small-scale, commercial miners or makorokoza,” Tevera tells The NewsHawks.

Tevera and his three co-workers say to obtain one gramme of gold they have to gather five bags of ore, while using their traditional processing equipment to separate the gold from the ore.

“The gold is found inside the rock,” Tevera says. “After processing, we take the gold to the mill. Small-scale miners weigh and buy the gold ore.  Last week we got 4 grammes of gold and our local buyer paid US$40 per gramme.”

“It is hard work digging the ground, yet we have to endure. It is not easy,” Tevera says.

He shares the earnings with his co-miners. In-order to maximise on profits, some miners bring the entire family, including children to work on the mine.

In some instances, Tevera says, the artisanal miners are not the owners of the small trenches on which they dig, but are hired as labour by certain individuals, called “sponsors”, who have links to the markets.

“Sponsors are either politicians or wealthy and well-connected individuals,” Tevera says.

“They get a mining claim and hire us to dig for the gold. They bring equipment, pumps and explosives. They will sell the gold. We get 50% of the proceeds.”

Performance in the gold mining sector

Zimbabwe’s mining sector has a significant role in the development of the country as it brings in foreign currency, contributes to government revenue and provides for infrastructure development.

Since 2009, the mining sector has become the fastest growing with both small-scale mining companies, artisanal miners and multinational companies being involved in the gold rush.

However, as a result of illicit financial flows, Zimbabwe has been losing revenue through gold smuggling into neighbouring South Africa and to Dubai.

The case of Zimbabwe Miners Federation president Henrietta Rushwaya’s arrest at Robert Gabriel Mugabe International Airport while attempting to smuggle 6 kilogrammes of gold to Dubai was described by small-scale miner Harold Mukwayi as an exposure of government’s involvement in the promotion of illicit financial flows and smuggling of gold outside the country.

Mukwayi resides in the mining town of Shamva, about 90km northeast of Harare. He says the situation in the mining industry has been deteriorating under the new administration of President Emmerson Mnangagwa because the government is weak on dealing with corruption. Those who are politically connected therefore benefit.

“The case of Henrietta Rushwaya is a clear revelation of how the Mnangagwa regime has been supporting corruption,” Mukwayi says.

“She was arrested with 6kg of gold, but the big question is how much has she smuggled out without being caught and how many others are smuggling without being caught?”

A 2020 report by the Centre for Research and Development in Zimbabwe (CRDZ) revealed that Zimbabwe has a corrupt and porous aviation security system that facilitates smuggling through private airstrips, as well as national and international airports.

The report says, “The Henrietta Rushwaya gold smuggling case is confirmation that Robert Mugabe International Airport has a long history of systematic smuggling of precious minerals involving state security agents, security officers and VVIPs.”

Isaac Shangarai, vice-chairperson Mazowe Artisanal Miners Association and general manager Dericose Mining Company in Mazowe, tells The NewsHawks that Zimbabwe is poised to surpass its target in improving economic growth through the mining industry, but there is need for regularisation of mining laws to prevent leakages.

“The contribution of artisanal miners in gold production should be recognised. Lack of regularisation for artisanal miners has exposed them to exploitation. They do not have relevant paperwork to access formal gold buyers and they remain disadvantaged and cannot negotiate for gold prices,” Shangarai tells The NewsHawks.

Inside Zim’s illicit gold mining trade

The Zimbabwean government through the ministry of Finance announced that it is losing about US$1.8 billion of mineral revenues, especially gold, to smuggling and externalisation.

Meanwhile, Home Affairs minister Kazembe Kazembe disclosed that Zimbabwe was losing at least US$100 million worth of gold every month through international smuggling rings and the country’s porous borders.

In the gold-rich mining communities across Zimbabwe, it remains an undisclosed truth that politically connected officials scramble for small-mining claims and then proceed to sponsor artisanal miners with equipment. The bigwigs sell the gold and give a few crumbs to the toiling miners.

“Politicians linked to the ruling party are involved with artisanal miners. They sponsor the gold mining and own small claims. They cannot get their hands dirty, and we cannot name them,” says an artisanal miner who cannot not be named for fear of victimisation.

Zimcodd has reported that unclear policies have facilitated the smuggling of gold outside the country, causing the country to lose large amounts of foreign currency.

John Maketo, the Zimcodd programmes manager, says there are huge volumes of illicit financial outflows in the mining industry and these lead to loss of social and economic rights for the country’s population.

“The government has been failing to provide for adequate social and economic rights for its population. There has been a lack of access to healthcare, water and sanitation, education and social security safety nets.”

Revenue lost as artisanal mining thrives

Government statistics show that artisanal and small-scale miners are responsible for extraction of 63% of the recorded production of gold. In most cases, the artisanal miners operate illegally and do not sell the mineral to the state-prescribed buyer.

“Small-scale mining is an agent for economic development. These [artisanal miners] are untrained geologists with capacity to contribute to the country’s gold production.

There should be a law enforced to allow them to trade. They should be allowed to form associations so that they are regularised so as to remove leakages,” Shangarai tells The NewsHawks.

Zimbabwe Environmental Lawyers Association (Zela) produced a report titled Illicit Gold Trade and Smuggling — Vulnerabilities in the aftermath of the Rushwaya smuggling case. The report outlined how the government is using the illegal artisanal miners to promote revenue leakages.

“The system of gold leakages in Zimbabwe is linked to criminality within the artisanal and small-scale mining sector. Massive gold leakage is facilitated by a well-connected system leveraging on the chaos in the sector and the influence of political actors,” the Zela report read.

The Centre for Research and Development in Zimbabwe reports that the exploitation of gold is controlled by the ruling Zanu PF elites and securocrats, whose actions have become a source of violence, destruction of the environment and the contamination of water bodies with toxic substances.

Flawed gold buying scheme

“The government has been opening up for black-market, illicit gold buying and smuggling to neighbouring South Africa. Zimbabwe is mineral rich, but the government’s policies have contributed to the country losing foreign currency, because the bulk of the gold is being exported outside the country,” Mukwayi says.  

Fidelity Printers and Refiners, the government’s main buyer of gold, is paying miners US$54 per gramme while private buyers from neighbouring South Africa are paying between US$58 and US$60.

“The government, through Fidelity Printers and Refiners, inconveniences gold miners and for that reason small-scale miners have failed to expand,” Mukwayi says.

“It takes more than two weeks for Fidelity to process our payments and it is very challenging because mining is cash extensive. We have to repair pumps, buy explosives as well as pay our workers. The delays in payment by Fidelity Printers affect production capacity.”

“In some instances, we end up resorting to selling our gold on the black-market to independent gold buyers who pay us cash on sale, to ensure that production does not stop,” Mukwayi tells The NewsHawks.

Patronage and obsolete regulatory system

Small-scale miners in Zimbabwe say the absence of clear government policies triggers illicit financial flows.

The Zela report says the government does not have a gold policy framework on exploration, production, beneficiation, as well as marketing and management.

It says the lack of clarity with regards to the government’s policy direction on accountability of gold, including measures to curb criminality and illicit trade has been the key driver of illicit financial flows in the gold sector.

The ZMF, which represents small-scale miners, says the monopoly of the government as the sole buyer of gold has contributed toward the losses and non-performance in the sector.

“Government should not monopolise the buying of gold in the country,” ZMF spokesperson Dosman Mangisi says.

“The market should be open to allow other stakeholders such as bankers to compete. It (Fidelity Printers) has been recording losses since the beginning of the year because its payment system is not favourable to miners and that has resulted in miners opting for the black market,” Mangisi tells The NewsHawks

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