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Lovemore Zigara Midlands Correspondent—
THE liquidity crunch, which is currently being experienced in the economy, has hit hard on the small scale mining sector. This has resulted in the country losing 500 kilogrammes of gold to the black market according to the Zimbabwe Miners Federation (ZMF). Several miners are failing to access their funds from local financial institutions for deliveries of bullion with some banks capping their maximum withdrawals to between $200 and $500 per day.

Cash shortages being experienced in the economy have raised fears that the yellow metal could be diverted to the black market where there is ready cash especially to illegal gold miners who are not part of the formal banking system.

ZMF chairman, Lufeyi Shato said the government should capacitate the official gold buyers or look for partners who have the capacity to buy the yellow metal.

Said Shato: “There’s a need to capitalise or capacitate Fidelity Printers and Refineries and ensure that the banks have enough cash because we risk losing our gold to the black market. As we speak about 500kgs have been side marketed because miners can’t access cash for their deliveries.”

He advised that if the government does not have the money to buy the gold it should look for other companies who can do so on its behalf and pay a commission so that the country does not lose out.

Such a scenario might reverse recent gains of a surge in bullion being delivered to Fidelity Printers and Refineries, which stood at 4,6 tonnes in the first quarter of this year, a 36 percent increase from last year’s 3,9 tonnes in the period under review.

The government has set a target of 24 tonnes of gold this year with small-scale miners expected to contribute significantly in response to policies introduced by the central bank.

The RBZ waivered the requirement of having a gold permit for one to trade in the commodity, which resulted in a 49 percent increase in deliveries.

This has mainly been attributed to illegal panners bringing forward their gold to the formal market. Shurugwi based small-scale miner, Marufu Sithole said there was a need to instil confidence in the financial sector adding that the cash challenges will result in people keeping their money at home, which will have a negative bearing on gold deliveries through official channels.

“People still have a low opinion of banks hence you would find out that gold miners preferred to be given cash for their gold deliveries. The issue of encouraging small scale miners to deposit their bullion with banks is a noble cause but the recent cash shortages will dent such efforts,” said Marufu.

“There’s a need for an awareness campaign by the RBZ to instil confidence in the banking sector and as it stands more and more small-scale miners will go the black market way and the country will lose out.”

Chaderopa Chaderopa, the coordinator of Wanders Integrated Syndicate, a mining consortium, which is mining on claims belonging to locally listed entity Falcon Gold said the liquidity crunch has resulted in the resurgence of the black market in Shurugwi.

He said: “There’re a lot of illegal miners from where we’re operating and some of them have been selling their gold through gold centres set up by Fidelity Printers and Refineries. Since the cash challenges we’ve seen a resurgence of the black market with people coming with loads of cash to buy gold from these (illegal gold) panners.”

Zimbabwe Miners Federation (ZMF) chief executive officer, Wellington Takavarasha said they were liaising with the Fidelity Printers and Refineries. ZMF is targeting 15 tonnes of bullion of the government gold target.

Last year the federation, which is an amalgamation of small scale and artisanal miners produced 7,3 tonnes of gold.