Gold licensing rot exposed

(Last Updated On: November 25, 2021)



The Parliamentary Portfolio Committee on Mines and Mining Development has said the majority of the gold buying licences are surprisingly in the hands of mostly car dealers based in Harare.

The Portfolio Committee chairman Edmond Mkaratigwa said the gold buying system was controlled by bigwigs who engage car dealers as runners.

It is believed that individuals close to the corridors of power mobilise gold from artisanal and small scale miners and deliver it to Fidelity Printers and Refiners (FPR) and get incentives at the expense of the small scale miners.

“There are some claims that most gold buying agents are car dealers in Harare and FPR as the issuer of the licences have no proper answer to that. There is a need to assess the situation and see if there is a relationship between gold buying and car dealerships so that we can come up with a conclusion,” Mkaratigwa said.

FPR refuted those claims, saying the sole buyer and exporter of refined gold in Zimbabwe has a fair licencing system based on merit.

“Most of our gold buying agents are not car dealers, instead they are genuine gold dealers whom we have renewed their licences for years,” FPR acting general manager Peter Magaramombe said.

“If there are some car dealers it is just a coincidence, but we don’t think that constitutes a significant number.”

Magaramombe said before a license is issued, an application specifying area of operation, police clearance and demonstration of financial capacity to buy gold (this requirement has not been adhered to since 2006 due to failure to withdraw money from the banks) should be submitted to FPR.

The buyer must submit a survey report on prospective suppliers of the gold, copy of National Identity document and passport size photos for individuals that would be involved in the buying of the gold, certificate of Incorporation, list of directors , passport size photos for all directors in the event that the application is made by a company.

The declaration of expected quantities where the applicant signs a declaration that they would deliver a certain minimum quantity of gold to Fidelity per month is expected to be submitted.

“Renewal is based on attaining the declared deliveries. Any license holder who would have delivered above 75% qualifies for renewal. There are three signatories to the buying license who are the administrator, head of gold operations and the general manager,” Magaramombe said.

Since July 2021, Fidelity has been licensing between 40 and 45 agents per calendar month.

All issued licences expire on the last day of the month and renewal is in alignment with specified delivery minimum requirements, FPR said.

The Fidelity gold buying agents’ contribution ranged from 39%  to 51% of total gold deliveries from 2017 to 2021.

It is usually a norm that the performance of Fidelity gold buying agents follows obtaining incentive trends where they usually peak when incentives are highly lucrative and dip when incentives are unattractive or withdrawn.

Outside of the Msasa Head Office, Fidelity Gold Refineries currently has 11 gold buying centres strategically located to buy gold produced in those regions; Kadoma, Kwekwe, Chinhoyi, Bindura, Masvingo, Mutare, Zvishavane, Gweru, Bulawayo, Filabusi and Gwanda.

Magaramombe said the sole buyer and exporter of Zimbabwe’s gold has already identified other areas where gold buying centres will be established in the coming year to enhance accessibility and convenience to artisanal and small-scale mining groups.

Fidelity plans to open its buying centres seven days a week to enhance convenience and reduce potential leakages upon relaxation of Covid – 19 restrictions.

In August, the Cabinet approved proposals for the establishment of over 20 gold centres by mid-2022.

Accordingly, memoranda of understanding will be signed with four investors who have been identified for the purpose of setting up the gold centres.

The investors will own 100% equity in the centres, while those who operate joint ventures with the Ministry of Mines and Mining Development will fully fund the operations of the centres in return for a 90% equity stake.

Some of the gold centres are expected to be established in Makaha, Odzi, Mount Darwin, Shamva, Mazowe and Silobela.


Related Articles

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments
Back to top button
Would love your thoughts, please comment.x