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LocalNews

Penhalonga gold rush leaves a trail of destruction

By Simiso Mlevu 

. . . as Redwing Mine is turned into an artisanal mining field

AN ENVIRONMENTAL catastrophe is rapidly engulfing the mining town of Penhalonga, in Mutasa District, Manicaland Province. Random open cast mining by scores of syndicates, destruction of fields belonging to local peasant farmers, pollution of Mutare River and invasion of Penhalonga estates by artisanal miners brought in by syndicates linked to ruling elites have accelerated environmental degradation.

The environmental regulatory authority, the Environmental Management Agency (EMA) has not taken action, raising suspicion of the involvement of very powerful or politically well-connected individuals in the unfolding environmental crisis in the once pristine town of Penhalonga. This article outlines the current situation at Redwing mine in Penhalonga and highlights the risks posed by the activities. It also gives recommendations to duty bearers and other stakeholders that have a constitutional mandate to protect the environment and mineral resources. 

The problem in Penhalonga started with the placement of Redwing Mine under judicial management by Metallon Gold in 2018, citing viability challenges owing to foreign currency shortages. The forex shortages were blamed on the Reserve Bank of Zimbabwe’s regulations which stipulated that gold mining companies sell their gold to Fidelity Printers and Refiners at a price determined by the Central Bank.

The RBZ allowed companies to retain a portion of their export earnings while the rest was paid in local currency using Real Time Gross Settlement (RTGS) system. Metallon Gold Company claimed it was sending gold to RBZ but their lodgements were not being honoured. Metallon Gold subsidiaries were affected, firstly it was Acturus Mine then Shamva Mine and lastly Redwing Mine. Only How Mine remained operating. In 2019, Metallon Gold’s Chairman Mzi Khumalo announced that they had started legal proceedings against the RBZ, claiming that the company had lost US$132 million worth of profits due to the central bank’s alleged ‘corruption and a sense of impunity.’

Redwing Mine had gone for more than 3 years without paying salaries to its 750 employees, resulting in the workers suing the company[2]. Following the placement of the company under judicial management in 2018, most workers turned to artisanal mining for survival.

At first some of the workers were working underground but this stopped due to flooding which was triggered by the switching off of electricity supply by Zimbabwe Electricity Supply Authority, citing non-payment of bills by the company. Redwing Mine workers then joined artisanal miners at popular mining sites along Mutare River and around Penhalonga. However, things turned worse when a company known to artisanal miners as Prime Royal Mining arrived in Penhalonga in December in 2019.

Who is Prime Royal Mining?

Prime Royal Mining (PRM) is now the major player at Redwing Mine in Penhalonga. Centre for Natural Resource Governance (CNRG) has established that PRM entered into a one-year contract with Redwing Mine in December 2019. Under the agreement, Redwing Mine and Prime Royal Mining get 30 percent each while artisanal miners get 40 percent. It was also established that Prime Royal Mining was to set up a milling plant and artisanal miners are obligated to send their ore to that mill.

The milling company became the sole gold buyer from the artisanal miners. The artisanal miners include some former Redwing mine workers and some syndicates that came from Shurugwi, Gweru, Kwekwe, and Kadoma. Redwing Mine also negotiated to have its unpaid workers work as artisanal miners as a way to mitigate their financial situation. When Prime Royal Mining entered into Redwing Mine, the ground manager reportedly left at the beginning of 2020 under a cloud of accusations. The replacement is a man who reportedly claims to be linked to the security team of a member of the presidium.

As Prime Royal Mining agreement with Redwing Mine nears expiry date, CNRG understands the milling company has been making frantic efforts to negotiate for a three-year contract which will grant them authority to deploy artisanal miners until 2023. However, there are reports that the negotiations are being scampered by the interests being shown by a certain businessman with interests in the mining, energy and fuel industry who wants to take over Redwing Mine.

Illicit Financial Flow at Redwing Mine

Hundreds of tonnes of gold ore are processed by Prime Royal Mining at Redwing Mine premises. According to a source within Redwing Mine, monthly gold production levels are estimated to be between 4 – 5kgs. However, it emerged that security is lax along the production line at this mine and as a result, some people smuggle their ore outside the plant. According to sources, those who smuggle the gold ore will first bribe the security guards. Smuggling has given rise to disparities in terms of earnings for artisanal miners because while some get 40 percent share, those who are smuggling are retaining 100 percent value.

Some artisanal miners alleged that the smuggling of gold ore is happening with the full knowledge of Prime Royal Mining personnel. Most of the artisanal miners who are part of the smuggling syndicate are closely linked to the management of the company. CNRG also established that Prime Royal Mining buys gold from artisanal miners at straight weight prices of US$40 per gram instead of fine weight price of US$57 per gram. It also emerged during the research that Prime Royal Mining does not have a clear managerial structure on the ground and as a result, it has been difficult for artisanal miners to know who exactly is in charge.

Politicization of Artisanal Mining Activities in Penhalonga

There are indications of involvement of senior politicians and members of the security sector from Manicaland Province in the Penhalonga gold rush. CNRG established that in December 2019, some of the Joint Operation Command (JOC) officials from Manicaland Province held meetings at Redwing Mine to deliberate on the future of the company. Some of the senior police officers in the province have since been allocated gold rich spots to extract the mineral without following proper regulatory procedures as required by law.

Politicians and other politically linked elites use power and political connections to access gold claims and parcel them to syndicates which they manage. The closure of Redwing Mine offered an opportunity to political elites, the politically connected and securocrats who, with the aid of the organised syndicates, are exploiting the mine’s claims dotted around Penhalonga and Tsvingwe for profit without due care for the environment.

Mutasa Rural District Council cannot effect council by-laws to stop the illicit mining allegedly due to fear of retribution from those behind the mining activities. In the same vein, the Environmental Management Agency has failed to put an end or punish those undertaking illegal mining as the law requires, and so has the Zimbabwe Republic Police (ZRP) because the people involved are “untouchable”. Observations in Penhalonga have shown that members of the ZRP are providing security for the gold mining actors by making sure that ore that is coming from the pits goes straight to the mill. State security is providing services to a shadowy private company that is rumoured to belong to some members in the JOC.

The involvement of politicians has undermined the rule of law, stability and livelihoods of affected communities. Corruption, sometimes coupled with intimidation and violence has become common. CNRG Investigations have revealed that the haphazard mining in Penhalonga has now taken the form of organized crime as the syndicates are interlinked and use corruption and violence to secure mining rights and resource rents.

There is a clandestine secretive consortium which holds the strings of artisanal mining in Penhalonga. A senior government official only referred to as “mother” has reportedly grabbed land close to Liverpool residential area. “Mother” is also said to be a senior Zanu PF official in the province and selects her employees based on political party affiliation. According to insiders, she also has a network that controls the gold supply chain from the pits to the mill. An insider has revealed that a son of a well-known opposition figure in Penhalonga lost ‘his pit’ because he was labelled a sell-out (mutengesi). These networks tend to be transactional, determined and are controlled by a few individuals at key points in the artisanal gold supply chains.

A 2019 report on combating criminal consortia in the African artisanal and small-scale gold mining and trade sector noted this with regards to the Zimbabwean situation;

In Zimbabwe, the benefits of ASGM are not just enjoyed by high-level members of Zimbabwe’s ruling party but are also allocated to its core supporters. The result is a mutually beneficial relationship, with politicians seeking to gain the support of ASGM operators. This prevents members of the opposition party from engaging in the ASGM sector. This has a particularly strong impact in Zimbabwe, where gold is an important sector of the economy and few comparable alternative livelihoods exist, forcing individuals to support the ruling party in order to eke out a livelihood. High rates of corruption enable actors to exploit the gold sector with impunity and make it difficult for interventions, such as those aimed at formalization, to penetrate the ASGM sector.

Politicisation of artisanal mining in Zimbabwe has resulted in the country losing over 20 tonnes of gold worth over US$500 million. According to Fidelity Printers and Refiners (FPR), Zimbabwe could be losing $500 million a year to smuggling[4]. However, there are strong views that it could be much higher than this by end of 2020.

Impact on the environmental

Penhalonga and Tsvingwe, home to over 20000 people, is now a huge artisanal mining field with open pits and dumps all over. This is in violation of Section 73 of the Constitution of Zimbabwe which states that every Zimbabwean has a right to an environment that is not harmful to their health or wellbeing. The open pits left by artisanal miners pose a health hazard to locals as an unrecorded number of people have been injured after falling into these pits. In September 2020, Polite Dodzo who was visiting his relatives at Liverpool compound sustained injuries after falling into an un-reclaimed pit.

The artisanal gold mining activities have also left a trail of destruction in smallholder’s fields and the forest plantations. Subsistence farmers with fields between Redwing mine offices and Liverpool compound told CNRG they won’t be planting in the 2020-2021 season as their fields have been taken over by artisanal miners. Mutare River is now mud-choked and the water is contaminated with mercury from artisanal mining activities. There is huge siltation that has greatly affected the riverine and aquatic ecosystems. Artisanal miners have also been wantonly cutting trees in one plantation at Zengeni area in Penhalonga to obtain poles for makeshift camping shacks. Mutasa Rural District Council has not been able to stop the activities but Mutasa South Member of Parliament, Regai Tsunga told CNRG he is in the process of engaging the Ministry of Mines and Mining Development to halt illegal mining activities in the area. Tsunga said water reservoirs in Penhalonga face contamination from chemicals used at Redwing Mine and also by artisanal miners along the Mutare River.

The Environmental Management Agency (EMA) Manicaland Regional Manager Kingstone Chitotombe said the extent of environmental destruction in Penhalonga is cause for concern. He said EMA has been reporting these cases to the police, but there is a cat and mouse relationship between police and artisanal miners. Chitotombe said EMA has engaged artisanal miners on numerous occasions but this has not yielded positive results.

Potential Conflicts

The conversion of Redwing Mine to a huge artisanal mining field has caused political and socio-environmental disputes within the Penhalonga and Tsvingwe communities. The politically connected have been displacing other artisanal miners from the mining field. There are reports that some artisanal miners have lost their gold rich pits and ore to syndicate leaders fronting political and security figures in the province. At one point, one losing parliamentary candidate from Manicaland Province, who owns an excavator operating in the gold field, reportedly grabbed 11 tonnes of gold ore from other artisanal gold miners over a dispute on use of the excavator.

Artisanal miners contracted by Redwing Mine and Prime Royal Mining are digging close to the road and Mutare River at the edge of Liverpool compound. Digging by the roadsides poses a danger to motorists should the roads collapse. Section 34 of the Mines and Minerals Act stipulates that ‘no person shall carry on prospecting or other mining or development operations upon any road, nor within fifteen metres of the middle of any road and; no person shall hinder or impede the use of any road or railway track by mining operations.’

The influx of people from other provinces has brought with itself new dynamics which the people of Penhalonga now have to grapple with. According to Councillor Njazi Sabuneti, Penhalonga and Tsvingwe have been a relatively safe place but since the coming of Prime Royal Mining and up scaling of artisanal mining at Redwing mine, there are increased incidences of mugging in the area.

Recommendations

The activities happening at Redwing Mine are highly suspicious and lack any modicum of transparency. They are also a threat to the environment, peace of the locals and also threaten livelihoods of local people. Illicit trade and dealing in gold is also prejudicing the central government of revenue which can be used for national development. Based on these observations, CNRG recommends the following:

The artisanal mining activities happening Redwing Mine should be stopped without further delay, whilst the Ministry of Mines and Mining Development should investigate the activities that are taking place at Redwing Mine to establish if they are in compliance with the country’s mining regulations.

The Environmental Management Agency must execute its mandate and ensure the environment is not decimated by illicit mining activities in Penhalonga.

The Parliament of Zimbabwe must play its oversight role and ensure the country’s mineral resources being extracted in Penhalonga contribute to the fiscus through payment of royalties and taxes.

Member of Parliament for Mutasa South, Hon Regai Tsunga must urgently bring the matter to parliament whilst the local Councillor must report the matter to Mutasa Rural District Council and EMA, demanding urgent action.

Metallon Gold must uphold principles of good governance and transparency by disclosing the nature of the agreement they entered into with Prime Royal Mining.

Government must assess the capacity of Metallon Gold to continue holding the claim and decide whether a new reputable investor should take over.

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