The proud struggle for dirty gold

2015-03-22 15:00

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If you want to get the highest price for your gold, go to the East Rand.

The world gold price is set twice a day in London – last weekend the official price was R457 a gram. But in Lindelani, sandwiched between Benoni and Springs, illegal gold buyers like Vuyo* were earning R480 a gram.

Vuyo is what’s known as a “level 2”, one of the many cogs in the wheel of the illegal gold trade that results in the precious metal – illegally mined by men known as zama zamas – being sold at higher than world gold prices to feed a massive VAT (notional input tax) scam operating in the gold industry.

At the bottom of the chain are thousands of illegal miners, overwhelmingly black, who take massive risks for barely a living wage. At the top, say insiders at the Hawks and the SA Revenue Service (Sars), are a handful of mostly white men who have made millions. It’s a scam that robs taxpayers of millions, but also allows buyers to pay zama zamas up to 5% more than the world gold price.

Emmanuel* was 17 when he left Zimbabwe. He is 26 now and runs one of the many bases in Lindelani where zama zamas process their gold.

“I used to go underground, but for now I’m just taking a break and working at the base,” he says. “It’s okay to work underground. However, there are dangers when the rocks crumble and they fall on you.”

Still, Emmanuel says, he would rather be working in the illegal gold trade than walking around looking for a job.

On average, zama zamas only recover a few grams of gold for the roughly 30kg to 50kg of rock they bring up from underground, in makeshift bags made from rope and Iwisa sacks, in a single trip.

“The depth of the [shaft] determines how long it will take you to get to where you can get the gold. It can take you one hour or even more,” Emmanuel explains. “You can stay even a day, but usually we come out on the same day. It depends how fast you work.”

At the “base”, the rock is first pounded by hand into smaller pieces before being added to a mill, called a phenduka, which is filled with fist-sized ball bearings and cranked by hand.

“We take the soil and put it in [the phenduka], and then add mercury, washing powder, vinegar and tartaric acid,” he explains.

Emmanuel doesn’t charge other zama zamas to use his base – he supplies the mercury, which costs him R600 for a small bottle, and other materials. In exchange, they leave him some sand that can be reprocessed for gold.

The raw lump that is extracted from the base, he’ll take to a buyer like Vuyo, who last weekend was paying “level 1” zama zamas like Emmanuel R360 a gram.

“[In Lindelani] I’ll buy it for R360. When I sell it, it’s R480 per gram,” Vuyo explains.

At R480 a gram, Vuyo earns 5% more than the world gold price. Gold syndicates can afford to pay these prices because, ultimately, they can fraudulently claim back 14% from Sars, making a tidy profit without getting their hands dirty.

In a small outside room behind one of the shacks, Vuyo has a gas bottle, cutting torch and a very precise electric scale. Here the raw gold gets burnt until a tiny button of glimmering gold emerges.

“I buy and then I’ve got white guys to sell it to,” he says. “They can’t come here. I’m going there … When I’m going to give my boss, the boss is taking and putting the acid. It’s the acid that’s checking if the gold is a hundred percent.”

Vuyo has several bases in Lindelani supplying him with gold. Although it’s early in the day, he smiles and spits out a small button of gold he had hidden in his mouth.

While we’re speaking to him, his buyer calls: “Yes boss … Okay I’ll bring fast …”

The illegal gold trade is an open secret in Lindelani. All the police or rival gangs have to do is follow the distinctive sound of the pounding and the phendukas to find the bases.

“When the police arrive, they harass us,” Emmanuel says. “Whenever we hear that the police are around, we close [the base] because they sometimes take our stuff.”

Emmanuel, Vuyo and a member of the local community policing forum who we spoke to say police rarely make arrests and often come to the bases to either ask for money, or to confiscate gold and equipment that they sell to rival operators.

“This type of allegation needs to be tested and investigated,” says SA Police Service spokesperson Lieutenant Kay Makhubela. “If they can open a case, it will assist us to investigate members involved in these activities.”

Tensions between rivals gangs recently ended with four illegal miners being killed outside Benoni. As competition for access to the best shafts and access points intensifies, many zama zamas are choosing to mine on the surface, where there’s far less gold, but also far fewer risks.

On Geduld farm in the centre of Springs, hundreds of zama zamas have moved on to an old mine and are processing gold-bearing sand over Jameson tables in mining operations more commonly seen in Zimbabwe.

Instead of using mercury to separate the gold from the rock, the sand is washed down an angled board covered in corduroy to catch the tiny particles of gold. Small diesel pumps provide a steady supply of water.

These zama zamas will be lucky to get a gram of gold from a ton of soil they process. It’s not much, but like Emmanuel, they still see it as a better option than going begging for a job.

*Not their real names

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