The Reserve Bank of Zimbabwe (RBZ) is working on a policy to decriminalize the possession of gold by unauthorized persons to curb smuggling and encourage selling of gold to the state, the sole buyer of the precious mineral in the country.
RBZ Governor John Mangudya said enhancing responsible gold trading by artisanal miners who make a significant contribution to the country’s gold output would greatly help in boosting production of the precious mineral.
“There is need to decriminalize the possession of gold and instead focus on engaging the artisan miners on the norms and principles of responsible gold trading in line with best practice.
“To this end, the Reserve Bank, in consultation with the relevant authorities, is currently working on a policy to decriminalize the possession of gold in order to allow those in possession of gold to sell it to Fidelity Printers and Refiners,” the governor said in a mid-term monetary policy statement for 2015 released Wednesday.
RBZ subsidiary Fidelity Printers and Refiners is the sole buyer of Zimbabwe’s gold, the country’s top mineral earner. The country earned 496 million U.S. dollars from gold in the 11 months to November last year.
Over the years, several individuals particularly gold panners have been arrested for illegal possession of gold in crackdowns often launched by authorities against gold panning.
Some have also been caught at the country’s borders while trying to smuggle gold outside the country.
Mangudya said gold deliveries during the first half of 2015 were 8.1 tonnes and that total output for the whole year was expected to reach 16 tonnes, more than the 14 tonnes produced in 2014.
Zimbabwe’s gold production which had fallen to around 4 tons in 2008 has been steadily rising since 2009, with notable increase in gold contribution by small-scale miners.
While over the past five years large scale producers have contributed 75 percent to total gold production with the balance accounted for by small scale miners, increased monitoring efforts by various stakeholders have seen the contribution of small scale miners increasing steadily this year to current averages of 37 percent, Mangudya said.
He said the central bank was making concerted efforts to facilitate gold production in the country through the arrangement of financing facilities which also include the mechanization of small-scale producers’ operations.
And to boost gold output, the central bank governor said a reduction in production costs was needed.
According to the governor, some of the cost reduction measures that can be undertaken include rationalization of charges levied to producers, alignment of electricity tariffs on gold mining to those obtaining in other sectors like the chrome sector, increasing access to long term funding for both small scale and large scale gold producers and harnessing the potential of small scale and artisanal miners.