A gold smuggling syndicate involving Chinese nationals busted in neighboring Zambia with bullion worth millions from Zimbabwe, signals that the smuggling of the precious metal is well and truly alive.
Reports from Lusaka, reveal that Zambia police have recovered 29 kilograms of gold and US$200 000 cash from two Chinese nationals in a swoop codenamed ‘Operation Kutwa’, as they attempted to smuggle the contraband through Chirundu Border Post.
The ‘Operation Kutwa’ is a concerted effort to combat Transnational Organised Crime (TOC) in the Southern African Development Community (SADC) bloc.
Independent newspaper, News Diggers reports, that the Chinese duo identified as Zhao Yanjing and Zhao Changson were nabbed for illegal possession of gold bullion worth an estimated US$2.4 million and cash, having crossed into Zambia from Zimbabwe via the porous border post.
Inspector-General of Zambian Police Graphel Musamba was quoted in the media stating that the contraband was concealed in the door panels of a vehicle that the Chinese nationals were driving.
“The Zambia Police Service is pleased to announce the successful conclusion of Operation Kutwa, a coordinated effort that took place simultaneously across all Southern African Development Community (SADC) and Southern African Regional Police Chiefs Cooperation Organization (SARPCCO) Member States from 14th to 16th August 2024,” the police boss said.
A video of a press conference by the Zambian police has also been widely shared across social media platforms, sparking raging debates on the growing menace of organized criminal syndicates looting African mineral wealth.
Most of Zimbabwe’s gold is produced by small-scale operators and artisanal miners, a highly fragmented structure that lacks the advantages and efficiencies of scale. The proliferation of such operations has opened an avenue for gold smugglers to prosper as gold produced by the sector is not sold through official channels.
Ominously the country’s lucrative but murky gold sector production plunged by a significant 15% in 2023 according to official data, owing to a myriad of challenges including power outages and currency volatility.
Bullion production totalled 30.11 tons falling short of the government’s ambitious target of 40 tons according to data from Fidelity Printers and Refineries- the state-owned sole processor of all the gold, in a decline also fuelled by challenges in the artisanal sector.
Artisanal miners, which have bridged the gap following years of underwhelming performance at the turn of the century, are struggling as unsafe mining practices, gold smuggling, and illicit trade derail the progress made.
Once among the top bullion producers on the continent, Zimbabwe has fallen far behind regional peers Ghana, Mali, Burkina Faso, Guinea, and Tanzania as an extended economic crisis keeps investors at bay.
Compounding these challenges is an emergent noxious grip by smuggling syndicates linked to the country’s political elites which have fuelled illicit trade of gold, channeled through regional borders destined for Dubai.
Civic society watchdog, the Centre for Natural Resource Governance (CNRG) stands vindicated by the recent bust as it warned of the gold syndicates in a report Zimbabwe’s Disappearing Gold: The case of Mazowe and Penhalonga.
Key findings of the reports show that ‘gold leakages are rampant at the mining, milling, and transportation levels of the supply chain.’
Illicit financial flows (IFFs) in the artisanal mining sector in Zimbabwe are responsible for leakages of an estimated 3 tonnes of gold, valued at approximately USD157 million every month, further states the report.
This report looks at the political economy of illicit gold mining and trade in Zimbabwe and unmasks the intricate and interlinked close relationship between partisan politics and access to gold mining rights by artisanal miners; acquisition of gold trading licenses and gold buying privileges; gold milling and smuggling.
The gold dealers submit less than 30% of the gold to FPR, while the rest finds its way to South Africa, the United Arab Emirates, and other Asian countries such as China and India. Most smugglers prefer to exit the country by road to South Africa where the gold is flown from. Sources told CNRG that some of the gold is flown out of South Africa by private planes from Lanseria Airport.
CNRG calls for political will to bring order to Fidelity Printers and Refineries (FPR) the country’s legal gold trader, and for civil society to demand accountability in the artisanal gold mining sector in light of the continued increase in cases of gold smuggling from Zimbabwe.
“The gold pricing system should be attractive to local gold producers and the trading platforms should be efficient in paying the gold producers. All producers should have equitable access to FPR gold trading platforms to protect artisanal miners from exploitation.
“FPR should develop a mechanism for accountability for its gold buying agents. They must have a paper trail for their transactions,” reads part of the report.
These findings have been further buttressed by an Al Jazeera documentary, The Gold Mafia: Episode 1-The Laundry Service, released on 23rd March 2023, which exposes alleged illicit financial flows from Zimbabwe, including serious allegations of abuse of diplomatic immunity, illicit gold trading, corruption, and money laundering in the mining sector.
The investigation revealed how gold is at the centre of a dark economy with roots deep in the governments of Zimbabwe and South Africa, where gold has become one of the preferred commodities for money launderers.
“…Gold smuggled from Zimbabwe makes its way to Dubai and, according to experts in money laundering and illicit trade, is then exported to other major gold hubs like Switzerland and London.”
Al Jazeera “identifies the global nature of these crimes, in which gold smuggled from one nation could end up in the form of cash deposited in offshore accounts of front companies halfway across the world.”