/ MEDIA STATEMENT / This content is not written by Creamer Media, but is a supplied media statement.
A new report claims that South Africa’s gold reserves are being stolen by organised crime syndicates with the aim of selling them on for more money overseas. The story by the Sunday Times indicates that illegal miners are assisting the theft of gold throughout South Africa before passing it on to criminal organisations that feed it out to a global network of buyers.
According to the report, tons of gold were shipped out of the country between 2012 and 2016 – and it is still ongoing today. The article claims that Dubai “bought 34 tons of gold” from South Africa in this four-year period. However, the sales figures are not apparent in South Africa’s official trading account, which would be worth $1 billion to the national economy.
Fortunately, South Africa’s mining industry has shown signs of small growth in sales and production during Q3 2018, overturning a three-month decline in Q2 to register 0.5% year-on-year growth. It was no surprise that the StatsSA figures showed that gold mining was the smallest contributor. Strike action in the gold mining industry between November and December will also see Q4 2018 figures remain depressed. However, according to one of the leading CFD platforms for online trading, IG, almost three-quarters of their clients are going long on the price of Spot Gold, with hope abound for a better 2019 for the commodity.
The Sunday Times report also confirmed that the miners that are being roped in to assist the organised crime syndicates are dicing with death to meet their targets. Both Transnet and Sasol have warned of a possible disaster in Johannesburg as some illegal miners go to desperate and dangerous lengths to access the city’s gold reserves underground. Some are using explosives to blast rock underground, with some explosions coming “within metres” of the city’s main gas and fuel lines.
One of the main reasons that illegal gold mining has become so rife throughout South Africa is due to the closure of the SA Revenue Service’s (Sars) illicit economy department. These latest figures are just one of several reasons why Sars is in the process of re-establishing a dedicated unit to focus on South Africa’s illicit economy that is leaving a black hole in the country’s coffers. On its website, Sars said that South Africa is “losing a large portion of its GDP every year” to unlawful acts such as criminalised gold mining and smuggling.
The re-establishment of the Sars illicit economy unit would be conducted over two phases, the first of which was concluded in November. The final phase, focusing on the total operationalisation of the unit, is planned for completion in June 2019. The overall focus of the illicit economy unit will be on everything from organised tax, customs and excise evasion (including tobacco, textiles, alcohol and fuel) through to drug manufacturing, smuggling and gold and diamond mining. Finance minister Tito Mboweni confirmed that, since the re-establishment of the illicit economy department in November, it had already pinpointed 58 possible cases that were ready for investigation by the unit.