ZIMBABWE must institute a raft of measures that include decriminalising gold possession, easing licensing and securing modern technology to boost output, gold sector experts have said.
Last year, gold output was 29,6 tonnes with large gold producers delivering 11,1 tonnes while small-scale producers contributed 18,4 tonnes, according to the Reserve Bank of Zimbabwe.
Gold is envisaged to rake in US$4 billion and is expected to drive the government’s ambitious plan of a US$12 billion mining industry by 2023. Output is expected to reach 100 tonnes next year.
But this week, Gold Miners Association chief executive officer Irvine Chinyenze told the Zimbabwe Independent that authorities need to decriminalise gold possession to boost output.
“We have the issue of criminalising gold possession. At present, anybody in possession of gold without licences faces a mandatory jail sentence and this is counterproductive.
“The best approach is not to necessarily have that drastic and punitive action on anybody in possession of gold but what we need is to enforce deliveries to the refinery.
Why not say you have been found with 5g of gold, we are not taking you to Chikurubi prison, but we are leading you to the gold-buying bank, to Fidelity Printers and Refiners (FPR), to make sure that the yellow metal is captured in the official system,” Chinyenze said.
“What that does is that we make sure we get every gram that is out there.
So we can harness this by creating gold buying centres to harness every gram that is in the system instead of criminalising it.
Sometimes criminalising gold possession perpetuates criminal activity.”
FPR, the state-owned buyer of gold, pays miners US$54 per gram while private buyers from neighbouring South Africa pay between US$58 and US$60 which in some instances has fuelled gold leakages through smuggling.
The system of gold leakages in Zimbabwe is linked to criminality within the artisanal and small-scale mining sector where leakages are facilitated by a well-connected system leveraging on the chaos in the sector and the influence of political actors hence the call by miners to decriminalise gold possession to boost deliveries.
Gold deliveries were 19,05 tonnes in 2020 and 27,66 tonnes in 2019.
The country is endowed with vast gold deposits which remain unexploited but smuggling has remained a major challenge with tonnes of the precious metal being salted away.
Home Affairs and Cultural Heritage minister Kazembe Kazembe revealed in September 2020 that Zimbabwe was losing at least US$100 million worth of gold every year.
Deliveries of gold, the top foreign currency earner, have been on the decline since reaching a record 33,2 tonnes 2018.
The central bank governor John Mangudya last week at the CEO Africa Roundtable said Zimbabwe was targeting gold deliveries to rise to between 35 and 40 tonnes this year.
To increase output, Chinyenze said the country must take a leaf from Mongolia where gold possession has been decriminalised such that anyone with the bullion can sell freely at gold buying centres.
“We have a precedent in Mongolia. No questions asked. If you are found with gold no questions are asked as you can deliver gold to any gold centre.
“So, these are some of the measures we are looking at.
We believe that if they are taken on board, we are going to see a great improvement,” Chinyenze said.
He further noted that production can be enhanced if stakeholders capitalise the sector through providing lines of credit and technical support.
“You need to be aware that mining is capital intensive.
And as much as we might be celebrating the deliveries by small-scale miners we should not be blind about the fact that this is not being done through conventional means.
If we envisage a significant improvement in terms of production, we have to look at investing in modern technology,” he added.
Chinyenze said authorities must ease the licensing regime to allow artisanal miners to formalise operations.