In an isolated incident that happened in one of our neighbouring country, in the month of August 2024, two individuals were apprehended with 29.9 kilograms of gold and $200,000 in cash hidden in their vehicle. The gold is valued at $2.3 million and is believed to have been smuggled from Zimbabwe. The vehicle was registered in Zimbabwe and had Zimbabwean license plates, suggesting that the gold might have been smuggled from there . The suspects claimed they were in that country to visit a friend, but investigations revealed they were involved in selling fencing wire in Harare, Zimbabwe. I know you might be wondering what this story has to do with mineral value addition as it is the process of increasing the value of a product, service, or resource by adding features, quality, or functionality that make it more desirable, useful, or valuable to customers or consumers. This can be achieved through improving processing or manufacturing, packaging or presentation, quality improvement, innovation, branding and certification or accreditation, obtaining recognized standards or certifications. I found it not worth while to delve into giving more value to the minerals if they can't first benefit locals, it is of no urgency to add value to minerals with word of the streets echoing with looting complains and felt it most appropriate to give the first value Zimbabwean minerals can have, which is to benefit it's people.
It's not in my position to judge the two individuals or to claim the gold as alleged but I'm here to pause a what if it's true question. If its true it confirms the clamouring of masses that measures are needed to secure our minerals from pilferage. It's an isolated case where 2 people in fencing have access to 23 kgs gold are caught, and how many are getting away with it. How does a foreign country have to detect and our national security system fails to, it will mean will facing a national quagmire and our children when they read this history they will not forgive us. It is with this cause I started to research on how detrimental could be leakages and how government can proof the system, looking at gold mining processing, considering it's a mineral without bulk but value. Gold is first collected after crushing ore and secondly after heating carbons from the elution process these processes can be privately conducted making it difficult to implement accountability policies but we can't leave leakage getting out of hand.
It is very important to acknowledge the laws and regulations related to gold trade, mining processes, handling and revenue generation in the view to check if it's about policy weaknesses. It without doubt an area government of Zimbabwe has thought throught this matter from many angles with 10 sets of statutory instruments guiding the nation namely :
1. Gold Trade Act [Chapter 21:03]: Regulates gold buying, selling, and processing.
2. Minerals and Mining Act [Chapter 21:05]: Governs mining, processing, and export of minerals, including gold.
3. Reserve Bank of Zimbabwe Act [Chapter 22:15]: Empowers the Reserve Bank to regulate gold processing and export.
4. Gold Dealers Licensing Regulations (1996): Requires gold dealers to obtain licenses.
5. Gold Trade (Quality Control) Regulations (1996): Sets standards for gold processing and export.
6. Environmental Management Act [Chapter 20:27]: Regulates environmental impact of gold processing.
7. Taxation laws: Gold processing is subject to income tax, value-added tax (VAT), and royalties.
8. Mining (Quality Control) Regulations (1996): Sets standards for mining and processing.
9. Gold Export Regulations (1996): Regulates gold export.
10. Reserve Bank directives: Regularly issued to govern gold processing and export.
It is with this regard I just concluded as in many areas our nations has superb blueprints and policies but implementation fall short. Whenever the government loses gold to smuggling the detriment is made up of lost revenues made up of 5% royalties, 15% value added tax and income taxes.
Royalties = 5%
V.A.T ( 1 - 0.5 ) 15 % = 14.25%
Income tax 20% ( estimate 5% makes profit value of gold sold) = 5 %
20% of leakages value is govnment lost revenue. If the 2.3m gold found in our neighbouring country was from here, the treasury lost $460 000. It's alot of money in one incident.
What can be done. Strengthen our laws and detection will be 2 key areas to deter smuggling.
Government need to put in place a heavy penalty competitive to rape and and stock theft for gold smuggling. Stock thelf from an individual attracts a penalty of 7 years for a $350 beast what about a person with 2.3 million of gold, should rot in jail. In the same area I feel the tax laws in relation to gold promotes the idea of smuggling considering gold has a lot of alternative markets local and abroad. Government should priorities gold remittances in the view to access much needed foreign currency than having gold sold and the money starshed somewhere abroad.
Government need to put effective technologies near boarder control areas and airports so that the chances of system failure to detect is limited. What makes me agitated with this issue is there is a place like Mhangura where the whole community is sleeping under noise pollution of gold mining operations. It will be painful if at the end of the day the government get nothing from it as little to none is any corporate social responsibility happening.
