A local company has suggested that the government should introduce a two tier pricing system for gold with a higher price being paid to properly registered and lawfully operating small workers producing less that 30kg a year and a lower price for those producing more than that, according to the First Merchant Bank’s quarterly guide to the economy.
The move, it is believed, will reduce unemployment and the ecological damage caused by illegal gold panners.
The same idea has already been alluded to by Mines Minister Chris Andersen who said in Gweru gold panning should be legalised provided there was no environmental damage so as to enable the panners to sell their gold to the government instead of the black market.
Andersen said it was now high time that the illegal panners were recognised as part of the informal sector. Instead of hunting them down, he said, they should be encouraged to sell their gold to the country’s Reserve Bank.
He even suggested that they should be offered a higher price than the current support (market) price which has just been increased from $700 to $950. Black market prices are reported to around $1 200.
Giles Munyoro, the president of the Small-Scale Miners Association has estimated that the country is losing more than $50 million annually through illegal gold sales. But the figure could be even higher.
Derek Bain, chief executive of the Chamber of Mines has estimated that the panners produce about 750kg of gold annually but only sell 1.5kg a year to the Reserve Bank.
Besides, it is almost impossible to stop the panners. Those arrested are fined a paltry $300 about a third of the amount they would get from selling a single ounce on the black market.
The output from these panners would boost the country’s overall output and the State coffers instead of those of individuals who allegedly include diplomats and high ranking government officials who are buying the gold from the panners.