Reserve Bank Of Zimbabwe Gold Fund Looted – Mnangagwa Turns A Blind Eye
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Reserve Bank Of Zimbabwe Gold Fund Looted – Mnangagwa Turns A Blind Eye

Staff Reporter

The Reserve Bank of Zimbabwe (RBZ)’s US$200 million Gold Development Fund (GDF) could have been abused amid reports that most beneficiaries, Artisanal and Small-Scale Mining (ASM), are not aware that $74 million was disbursed in 2017 and that the funding has been doubled to $150 million in 2018 as part of the measures to boost gold production.

Investigations by the Zimbabwenewslive show that beneficiaries received a paltry US$24 million in cash as working capital while a huge chunk was paid to selected suppliers to pay for machinery and equipment. Basic equipment for the artisanal miners include a compressor, jack hammer, generator, small hammer mill and a water pump.

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“I applied for US$30 000 to buy generators, a compressor and other equipment in 2017,” said the source who is an artisanal miner in Shurugwi.

“What is shocking is that I was directed to a certain Helem Mhlanga, whom the RBZ said was the only consulted who was writing business proposals for them.”

The source said Mhlanga charges a minimum of US$400 to write a business proposal and every miner in the Southern region, Midlands, Bulawayo and all the Matabeleland provinces, is supposed to go through Mhlanga otherwise the proposal is rejected by the RBZ.

Between June 2001 to June 2012 Mhlanga was the Fidelity Printers and Refiners gold procurement administrator based in Bulawayo. According to his Linkedin profile his duties included, among many others: “Responsible of Administering Gold Buying Officers in the Southern Region , that is Matabeleland South ,Bulawayo ,Matabeleland North and parts of Midlands . Handling custormer related issues . Responsible for Small scale miners assistance ,mine evaluations and advice in terms of operations . Makert intelligence and marketing of products offered by FPR. I am a holder of a B. com hons in Marketing ,Diploma in Metallurgical Assaying ,Certificate in Quality Assurance ,Certificate in Management ,Certificate of competance in Quality Management systems development and Auditing (ISO 9000 standards).”

Investigations also revealed that miners are being told to buy equipment to certain suppliers despite the high prices charged by the suppliers.

“I was told to get quotations from three suppliers for my generators and a compressor. The names of the suppliers are provided by the RBZ so there is no room to source the equipment from any other supply.

“What this means is that the loan is circulating within their circle because I told the RBZ that the generators from their suppliers were expensive and they said they had no option because only those suppliers were in a deal with the RBZ.”

The fund abuse comes on the backdrop of the government’s efforts to capacitate small scale miners.

Initially, US$40 million had been set aside for the GDF, but due to overwhelming demand for financing by gold miners, the cap was removed and US$80 million was snapped u in 2017.

Last year Fidelity Printers and Refiners (FPR) head of gold operations Mehluli Dube, told the local media that both small and large-scale miners benefited from the GDF.

Faced with severe foreign currency shortages, the RBZ is banking on the propulsive role gold to drive export earnings. In its 5-year plan, RBZ has a target to produce 30 tonnes of gold annually by 2020 (2015 Monetary Policy Statement). Previous peak gold production was 27 tonnes, produced in 1999, at a time when contribution from Artisanal and Small-Scale Mining (ASM) was meagre, around 5%.

 

Investigations also showed that the RBZ put in place mechanism to block and investigate opportunistic investors who shifted into gold mining to take advantage of the loan facility as beneficial ownership of the loans was not disclosed. The risk being that some businesses which benefited from the loan could be driving illicit financial flows by illegally using gold as a currency to finance their imports due to foreign currency shortages.

According to the Zimbabwe Miners Federation (ZMF) there are about 10 000 registered small-scale miners in the country however the RBZ fund was accessed by 2.5% of the registered small-scale miners.

Investigations also showed that the increase in gold deliveries in 2017 was boosted by the increased visibility of FPR on the market as evidenced by the public relations efforts, which have seen their teams visiting major gold producing areas.

Further, the continued payment for gold in cash for most parts of last year – a combination of 60% US dollars and 40% in bond notes) and spot payments, have assisted in enticing miners to deliver to FPR.

FRP officials also launched gold mobilisation outreach meetings where artisanal miners were told of the importance of delivering gold through the formal channels.

Only those miners who deliver gold to FPR can access funds under the GDF. In 2014, the gold sector generated US$687 million in terms of export earnings, which rose to US$737 million in 2015 and US$914 million in 2016.

 

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