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Oliver Kazunga Senior Business Reporter
DECLINING gold production by small-scale miners and rampant smuggling of the mineral is linked to the low mineral prices at Fidelity Printers and Refiners (FPR), miners said yesterday as they urged the government to review the price to enhance competitiveness.
Latest reports indicate gold production by small-scale miners has plunged to about 959kgs from a peak of 17 tonnes in 2004.
While exact figures could not be established, miners said FPR, the country’s sole buyer and exporter of gold, buys the mineral at 11 percent lower than international prices.

Yesterday, gold was pegged at $1, 276 per ounce on international markets.
From contributing nearly 60 percent of the 29 tonnes of gold that was delivered to FPR in 2005, small-scale miners went on to produce virtually nothing in the subsequent three years.

The development is worrying, producers said, urging quick measures to incentivise production and enhance increased revenue from the sector.
“The price at which Fidelity Printers is buying gold from the producers is one of the reasons behind smuggling of the mineral. They are buying gold at 11 percent lower than the international market price, which results in some miners opting to smuggle gold to countries like South Africa where they fetch a better price,” Bulawayo Miners’ Association advisor Ishmael Kaguru said.

He said use of unregistered gold detectors was also fuelling smuggling.
“The government should ensure that all gold detectors are registered so that the mineral obtained through the detectors is registered and delivered to Fidelity Printers,” said Kaguru.

The Zimbabwe Artisanal and Small-Scale Mining Council (ZASMC) president Wellington Takavarasha is on record saying Fidelity Printers’ prices were not competitive.

“We’re not happy with the price that Fidelity Printers is buying gold at. They buy gold at minus 11 percent of the London Bullion Market while on the black market the rate was pegged at five percent above that,” he said.

“We’re calling on government to create a gap where Fidelity Printers buys at favourable rates to attract producers to deliver their gold to them.”
However, United Women Miners’ Association secretary-general Mpumelelo Musekiwa said their members had no problem with the price as they understand the government has no money.

“But if the price can be raised, that will be a welcome development to us,” she said.
Small-scale miners have also attributed low production to funding constraints, lack of geological information, equipment and delays in formalising panners.

Mines and Mining Development Deputy Minister Fred Moyo said the government was working towards addressing factors behind smuggling to enhance efficiency.
“At the moment, we don’t want to speculate the root causes leading to smuggling of gold. We don’t want to assume the factors causing the smuggling of gold.

“We know there are a number of factors that can cause smuggling and we are working on addressing those,” said Moyo.
Finance and Economic Development Deputy Minister Samuel Undenge recently told delegates in Bulawayo that the government was keen to ensure FPR bought the mineral at competitive prices.

Since the adoption of a multicurrency system in February 2009, the mining industry has become the major economic mainstay raking export earnings of about $1,8 billion last year.

The country has set a target of producing 15 tonnes of gold by year end, which has  since been reviewed downwards to 13 tonnes.