REGULATIONS in Zimbabwe that force gold producers to sell their bullion to the central bank is encouraging gold smuggling worth about $1.5bn annually, said Bloomberg News.
“Zimbabwe’s centralised gold-buying scheme underpays producers, a practice that encourages smuggling and erodes industrial mining profits, leading companies to close mines,” said International Crisis Group (ICG), a research company. “Idle industrial mines become targets for intrusion by artisanal miners,” it said.
Payments to small-scale miners are “considerably lower” than the spot price of gold, pushing them to look for more lucrative markets, according to ICG. The organisation didn’t say how it estimated the size of illegal gold shipments.
The gold is illegally shipped from the southern African nation’s small-scale mines, often to the bullion-trading hub of Dubai, ICG said in a report Tuesday. Some of those artisanal mines are plagued by violent gangs that have political connections, it said.
Reuters reported last year that gold worth billions of dollars is smuggled out of Africa annually through the United Arab Emirates. Citing customs data, Reuters said the UAE imported $15.1bn in gold from Africa in 2016, but a large portion of that gold supply was not recorded in the exports of African states.
Zimbabwe’s mining sector is key to rebooting an economy suffering from acute shortages of fuel and food, as well as dollars. Official gold exports fell 23% to less than $700m in the first 10 months of this year as output slumped, according to central bank figures.
