Published by the government of Zimbabwe
20 November 2008
editorial
Harare — There is need to restore the operational viability of gold mines and act decisively to stamp out rampant gold smuggling, which has contributed to the significant decline in deliveries to Fidelity Printers and Refiners.
The Chamber of Mines paints a gloomy picture in the gold sector in its latest report, where a massive fall of 182 percent in deliveries of the precious metal was recorded in October.
So grim is the situation that some mines have actually shut down while others have scaled down production.
Producers of the precious metal list their constraints as being largely escalating production costs, frequent power outages, shortages of critical inputs such as cyanide, explosives, spare parts and mining equipment.
However, while gold producers moan over all these factors, many of them are guilty of big-scale smuggling.
The country has for sometime now been losing gold worth hundreds of millions of US dollars every month to smugglers.
Gold is one of the main sources of hard currency for the country, accounting for a third of its export earnings, but now very little of the precious metal is trickling in.
The Reserve Bank of Zimbabwe has regularly reviewed the local price of gold, in some cases awarding 10-fold increases, in a bid to curb smuggling and boost sagging deliveries, but this has apparently not paid off.
It means there is something wrong somewhere. Gold producers get 60 percent of their proceeds in foreign currency from what they deliver, but we understand that they have not been paid since March this year.
This is an area that needs urgent attention and against the background of escalating operating costs, it becomes imperative that the gold miners get the payment.
We believe and are confident that the central bank will honour its side of the equation.
However, the RBZ gets irked by the endemic smuggling, elements of indiscipline and side-marketing on the part of the gold producers, especially after they have received the support they need.
All the evidence of gold smuggling and the list of those responsible is there.
What is needed is to bring them to book.
There has been procrastination on arresting and prosecution of the smugglers of gold and other precious metals such as diamonds simply because there is big fish involved.
The nation cannot continue to suffer while those responsible for smuggling go unpunished.
Some time ago, the Government enlisted the services of Israeli consultants to help it crack the underworld ring of illegal gold and diamond dealers. The consultants produced a report, which proposed measures to curb the smuggling.
The recommendations in the report included the need to come up with a monitoring unit, IT software suitable for dealing with the issue, and deployment of skilled manpower and experts on the matter.
It was also recommended that there should be a co-ordinated programme of action between police, the Ministry of Mines, the RBZ, Zimbabwe Revenue Authority and Government departments.
There is, therefore, need to implement such recommendations, which should help probe and track down the dealers and smugglers of precious metals.
We believe the authorities concerned are capable of putting in place the necessary measures to support this strategic sector in order to make our mines viable.
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