Ghana GOLDBOD effect: Zambia moves to adopt ‘single buyer model’ for her gold

The Zambian government intends to introduce stricter regulations on gold trading and processing to reduce leakage and enhance revenue from the sector. Dr Hapenga Kabeta, Permanent Secretary at the Ministry of Mines and Minerals Development, revealed the new measures during a meeting with stakeholders in eastern province, amid growing concerns about illicit trades and informal gold dealings.

The framework is part of wider reforms to organize the gold value chain and ensure all gold produced in Zambia is accounted for. Presently, the Bank of Zambia is the sole authorized buyer of gold, and gold-processing and purchasing arrangements must pass through the central bank. Under the proposed system, all gold mined in the country will be sold to one designated entity, replacing the current practice where multiple buyers and dealers operate independently.

Non-compliance with the licensing requirement is punishable by arrest and prosecution. The new law mandates licensing for mining, processing, trading, and exporting gold as separate activities, as opposed to operating under a general mining license. Once enacted, the legislation will require separate licensing for mining, processing, trading, and exporting gold, rather than under a broad mining license.

Dr Kabeta urged stakeholders to align their operations with the forthcoming requirements to avoid disruptions when the new rules are implemented. The reforms aim to tackle issues like smuggling, under-declaration, and revenue losses that have plagued the sector for years. A centralized purchasing system through the Bank of Zambia will enhance traceability and assist Zambia in meeting international standards on responsible sourcing.

The Minerals Regulation Commission will be the institution responsible for issuing and overseeing the new licenses. Government will conduct awareness campaigns in all gold-producing provinces to enlighten artisanal and small-scale miners about the new compliance requirements, emphasizing that the reforms are aimed at formalizing the sector and ensuring Zambians benefit more from the country's gold resources.