Poor gold prices fuel black market trading – small scale miners

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MUTARE – The small-scale gold miners have said the poor gold prices offered by government’s Fidelity Printers has forced them to turn to the lucrative black market.

In an interview with The Zim Morning Post on Thursday, the Zimbabwe Miners Federation (ZMF) Treasure General Lufeyi Shato said the move will dent President Emmerson Mnangagwa’s target of 100 tonnes of gold by 2030.

Shato said:

“In this case, all we can say is that the government is promoting the black market where gold prices fetch higher prices than Fidelity printers which is owned by the government.”

Small scale miners receive US$22000 per kg with 45 percent of that in Zimbabwe dollars (RTGS), while the same is US$35 000 at the black market where local and international buyers have formed organised syndicates.

“My advice or plea to the government is to treat mining as real business. We can sustain our families through mining.

“Our President Emmerson Mnangagwa has said we should contribute 100 tonnes of gold by 2030, but, l think the government is biting it’s on fingers on that,” he said.

“The reason l am saying the government is biting its own fingers is  because small scale miners are not given what they deserve from Fidelity Printers , thereby, they are now opting for the black market where they get better offers,” Shato said.

“Small scale miners are now targeting the black market because the prices are good, we have since approached the government over the matter because we also want to meet the government’s target,” he said.

“It’s now expensive to produce gold, everything we are using is being charged in foreign currency, so we are going to continue to lobby the government so that we are given good money and help our economy to recover ,” he added.

He said they will continue to lobby government to improve on their prices.

The Minister of Finance Mthuli Ncube said Zimbabwe may have lost between 30 tonnes and 34 tonnes of gold to smuggling in neighbouring South Africa due to unfriendly mining policies that need to be addressed urgently.

“We will have a discussion with governor Mangudya (John) about output and retention percentages to enable gold miners to sell their gold through proper channels. In terms of the gold output, we have seen some leakages,” said Ncube.

“But the deliveries have been going down at Fidelity Printers because of leakages in the sector, which we are finding a way to plug so that output is accounted for in the formal sector,” the Finance Minister explained, adding that most smugglers go to South Africa as there is a rebate which attracts miners to sell gold.

Ncube also said the country should come up with policies that encourage miners to sell gold through the formal channels. Gold is now the highest single foreign currency earner in the country, ahead of tobacco.

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