Zimbabwe is losing gold worth about $800 million every month through smuggling and underground dealings involving locals and international cartels.
The figure is stated in an unofficial document produced by a private citizen and forwarded to Vice President Joice Mujuru, Finance Minister Patrick Chinamasa, several other ministries, the International Monetary Fund and the World Bank. The nation is currently reeling under an acute cash crunch and a debt of $9.9 billion.
According to the investigator, several unnamed cabinet ministers and senior government officials are involved in shady deals with official and unregistered gold miners who do not remit the mineral to government through Fidelity Printers as required by the law.
Most of the gold is reportedly smuggled out of the country where it fetches prices higher than Fidelity offers.
“99.9 % of gold sales in Zimbabwe today are transacted in hard cash, without any of it finding its way into the banking system,” said the source.
“Everything is sent out of the country illegally, with the blessing of senior government officials. Due to the size of each consignment it’s easy to hide and move across international borders. Profits are externalised,” he added.
Some of the buying syndicates order quantities ranging from 50kg to 90kg of processed gold on a daily basis, said the source.
Zimbabwe is believed to be home to more than 1,000 registered artisanal gold miners who employ an estimated 500,000 people. A high number of these are suspected to be selling the bullion illegally.
Thousands other illegal panners operate throughout the country in gold-rich areas mostly sited on the Great Dyke and on disused mines.
“The monthly figure that is being laundered (is close) to $800 million, considering the number of gold panners in the country, the high-bearing ore yields and, more specifically, the low price being paid for gold by Fidelity in Zimbabwe,” said the investigator.
He warned that the rampant illegal trade in gold posed a national security threat as the proceeds could be used to finance terrorist attacks.
“Apart from the negative impact that this has on the Zimbabwean economy, we are more concerned about the money laundering aspect associated with this illegal trade.
“Money laundering of this magnitude puts the South American drug cartels to shame, with Zimbabwe being the key contributor to what could become a threat to regional stability, assuming nothing is done to stop it,” he added.
Prominent and politically well-connected individuals and their families are believed to have amassed vast fortunes from the underground gold trade.
Official gold production dwindled from about 17 tonnes in 2004 to just over 900kg in 2013, according to the Zimbabwe Artisanal Miners and Small Scale Council (ZAMSC), which recently acknowledged that smuggling was rampant due to higher prices offered in other countries.
Finance Minister, Patrick Chinamasa promised to return a call from The Zimbabwean, but had not done so by the time of going to press.
Paul Mangwana, a ZAMSC board member and former cabinet minister told Parliament earlier this year that low prices offered by Fidelity were driving gold smuggling.
“It does not make sense for us to sell to Fidelity. We are losing tonnes and tonnes of our gold, which is going to South Africa, where dealers buy at five percent above the prevailing world prices. Local miners take the risk to go and sell there. As a result, we are building South Africa instead of building Zimbabwe,” said Mangwana. The Zimbabwean
