Home Mining Gold Price Alone Is Not Enough To Stop Illicit Gold Market :ZELA.

Gold Price Alone Is Not Enough To Stop Illicit Gold Market :ZELA.

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The Zimbabwe Environmental Law Association (ZELA) says while the move by Fidelity Printers and Refiners to improve prices offered for gold deliveries from Artisanal and Small scale Gold Miners is quite important, it is not enough to remove oxygen for illicit gold market.

This comes after Fidelity Printers and Refiners (FPR) announced a new gold trading framework on Tuesday, 26 May 2020.

Mainly, the new measures relate to different gold payment arrangements for deliveries from Artisanal and Small-Scale Gold Mining (ASGM) and Large-Scale Mining (LSM).

According to ZELA’s analysis of the new gold buying framework in Zimbabwe with a special emphasis on Artisanal and Small-Scale Gold Mining, FPR must align price for gold deliveries from ASGM with international market to promote transparency and responsiveness of its gold price.

“Instead of coming out with a flat fee of US$45 per gram of gold, FPR must offer prices aligned to the international market as demanded by ZMF.

“FPR must not only care about the golden eggs but the goose that lays them too. Considering the vulnerabilities of ASGM in COVID-19 times, FPR must push for ring fencing of a portion of royalties for investment in COVID-19 prevention mechanism in ASGM – disinfection of hot spots, provision of hand sanitisers and masks.

“Arbitrage opportunities must be removed by ensuring that the gold payment arrangements for ASGM and LSM are not differentiated except that FPR must continue paying ASGM in cash and LSM through bank transfers,” said ZELA.

According to the ZELA analysis, a comprehensive reform package is needed to remove oxygen from the illicit gold trade by expanding focus to include legal and financial support to formalise ASGM.

“Therefore, reform of the Mines and Mineral Act must cater for ASGM and undue delays to this reform process must be avoided.

“FPR must have established clear milestones for re-joining the LBMA to ensure the country benefits from refining and export of gold directly to the international market as was the case before 2007.

“FPR must seize the opportunity to align its gold trading practice in line with OECD’s Due Diligence Guidelines on Responsible Mineral Supply Chains,” said ZELA.

The report added that, “Artisanal mining must be prioritised in the long overdue reform of the old Mines and Minerals Act with compliance burden being distinguished with those of Large Scale Mining.

“Ministry of Mines and Mining Development (MMMD) must chip in by enhancing transparency and accountability in the administration of mining titles through computerisation of the long overdue mining cadastre system.

“Ease of doing business in ASGM must be given priority by government.

“For instance, the gold mobilisation committee isn accused of chocking ASGM due to its rent seeking behaviour motivated by the knowledge that the bar of compliance for ASGM is too high.”

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