- The US and UK have sanctioned individuals involved in gold smuggling and money laundering in Zimbabwe, effective December 9, 2024
- The sanctions specifically target Kamlesh Pattni, known as the "gaffer" of the gold mafia, along with 27 other entities engaged in illicit gold trading
- Zimbabwe loses over $100 million worth of gold monthly due to smuggling and corruption, with porous borders exacerbating the issue
Harare-The United States and United Kingdom have imposed stringent sanctions on individuals and businesses implicated in gold smuggling and money laundering operation based in Zimbabwe, effective December 9, 2024.
This concerted effort, coinciding with International Anti-Corruption Day, targeted Kamlesh Pattni, the notorious "gaffer" of the gold mafia, and 27 other entities involved in illicit gold trading and money laundering schemes.
The U.S. Treasury's Office of Foreign Assets Control (OFAC) asserts that Pattni facilitated these illicit activities by bribing officials and utilizing trusted associates to obscure ownership, thereby creating a complex network to conceal these operations.
This fraudulent scheme has deprived Zimbabweans of the benefits of their natural resources while enriching corrupt officials and criminal enterprises.
Zimbabwe's gold industry has been plagued by corruption and smuggling, with the country losing over $100 million worth of gold every month through international smuggling rings and porous borders.
Zimbabwe suffered a significant loss due to gold smuggling in 2019. The estimated loss ranged from 30 to 40 tonnes of gold, which was smuggled to South Africa. To put this loss into perspective, we need to consider the market price of gold at that time.
The market price of gold in 2019 was approximately $1,200 per ounce. Using this price, we can calculate the estimated loss. For the lower end of the estimate, 30 tonnes of gold translates to approximately 964,521 ounces. When calculated at the then-prevailing price, this loss amounted to around $1.15 billion.
On the upper end of the estimate, the loss of 34 tonnes corresponds to approximately 1,090,514 ounces of gold. At the same price of $1,200 per ounce, this would have resulted in a staggering loss of about $1.30 billion.
These estimates highlight the significant revenue that Zimbabwe could have generated from its gold resources, which was instead lost to smuggling and corruption.
The government's statistics project an annual loss of $1.5 billion due to corruption, with gold being the primary source of these losses.
In 2015, $15 billion worth of diamonds went missing, highlighting the widespread nature of corruption and smuggling in Zimbabwe's mineral sector.
Recent incidents, such as the arrest of two Chinese nationals in Zambia for attempting to smuggle 30 kgs of gold and $200,000 in cash in August 2024 and the arrest of a Zimbabwean in South Africa for smuggling 23 gold pieces worth $783,000, highlight the scope of the problem.
In 2020, Henrietta Rushwaya, president of the Zimbabwe Miners Federation, was allegedly caught with gold bars weighing 6kg worth $330,000 when she was traveling from Harare to Dubai, although she was later cleared by the courts.
Joachim Chivayo was also found in possession of gold worth R15 million in South Africa.
Zimbabwe continues to struggle with corruption, despite efforts to improve transparency and accountability.
The country needs significant investment to resuscitate key sectors, including healthcare, railways, and aviation, with estimates suggesting that at least $300 million is required to revitalize the healthcare sector alone.
Equity Axis News
