African Gold Transactions. Richard Pearson Director John Pearson & Associates (Pty) Ltd

Transcription

1 African Gold Transactions Richard Pearson Director John Pearson & Associates (Pty) Ltd

2 Gold in Africa

3 Gold in Africa The global average annual production of gold over the past five years is approximately 2,400 metric tons (MT). African countries account for 20% of that volume (480MT). The continent s largest producer is South Africa, averaging close to 250MT per annum, slightly over half of the continent s production and about 10% of global production. In fact, it is the only African country featuring among the top 10 gold producers in the world. The other key gold-producing African countries are Ghana, Mali, Tanzania and Guinea. In total, there are at least 34 African countries producing gold.

4 Gold in Africa

5 Gold Production - Africa

6 Gold Producing Countries and Companies Country Mine Name Average weight per shipment Botswana Mupane 150Kg Burkina Taparko 220Kg Inata Bissa DRC Guinea Namoya Twangiza Kibali Siguiri Kineiro Lefa 220Kg 250Kg

7 Country Mine Name Average weight per shipment Ghana Tarkwa Abosso Iduapriem Obuasi Wassa Bogoso South Ashanti Edikan Prestea Chirano 600Kg

8 Country Mine Name Average weight per shipment Ivory Coast Tongon Bonikro 500Kg Kenya Karebe Kilimapesa 100Kg Mali Morila/Sadiola/Yatela Loulo Tabakoto Kalana Syama 400Kg

9 Country Mine Name Average weight per shipment Namibia Navachab 120Kg Tanzania Geita North Mara Bulyanhulu Tuluwaka Shanta 350Kg Zambia Kansanshi 120Kg Zimbabwe Caledonia 100Kg

10 Illegal Mining / Artisanal Mining An artisanal miner or small-scale miner is, in effect, a subsistence miner. They are not officially employed by a mining company, but rather work independently, mining or panning for gold using their own resources. In most cases they operate in areas demarcated for formal mining operations.

11 Country Average weight per shipment Shipped via Note Burkina 30kg-90kg Ministry of Mines & Customs DRC Ghana 40kg- 120kg CEEC Frank Dodd Act/OECD 15kg- 150kg PMMC Many shipments finding there way into neighbouring countries Guinea 15kg- 150kg BCRG Ivory Coast 30kg-80kg Central Bank Kenya 10kg Customs & Central Bank Often ex DRC - Frank Dodd/OECD Mali 20kg- 100kg Ministry of Mines Ministry of Mines Tanzania 15kg Tansort/TRA Often ex DRC - Frank Dodd/OECD Uganda 15kg- 100kg Reserve Bank/Customs Often ex DRC - Frank Dodd/OECD Zambia 30kg Customs Often ex Angola or DRC - Frank Dodd/OECD Zim 10kg- 120kg Fidelity Printers Finding there way into Mozambique

12 Channels to Export Sierra Leone GDDO (Gold & Diamond office) DRC CEEC (Kinshasa and now Bukavu) Ghana PMMC (All gold which has not been collected directly from a mine) Guinea BCRG (Central Bank in Conakry) Tanzania - Tansort as well as TRA (Revenue authority) # Frank Dodd Act is from the US and basically means you should not export from a country that borders the DRC, unless of course it s come via CEEC.

13 Shipments The figures presented above are average weights taken across all the mines. The likes of Goldfields etc, would ship higher weights but the others ship generally around 100kg or so. For the mines shipments are done generally 3 times a month for smaller mines and weekly for the larger operators. Artisans try ship smaller shipments weekly and generally carry product across borders themselves (uninsured) into Dubai or India.

14 How Gold is Extracted Miners

15 Miner

16 Artisanal Miners Miner Brokers

17 Processing

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19 Tanzania - Mwanza Scams

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21 Scams Kenya Precious Metals Company with a UK listing. Loss involved 50kg of Gold valued at US$850,000 Client coerced into a gold transaction without conducting any due diligence. Client made numerous visits to Kenya, inspected gold which was then paid for without any formal assay being undertaken. Client relied on integrity of seller to export product to Dubai and Hong Kong which never arrived. Subsequent investigation following the submission of a claim revealed this to be a bogus transaction and all relevant documentation including agreements and export papers proved to be false. Copies of the relevant documentation used in this gold scam will be available for discussion during the workshop period.

22 Scams Ghana Sample swapping Ghana False documentation Kinshasa Misrepresentation of product

23 Insurance Lloyds Policy Credit Applications at Banks Falsified Documentation

24 To Reduce Claims Due Diligence to Reduce Claims Questionnaires must be completed Site Visits: Mine Inspection / licences Source of Gold Ministry of Mines Assay Verification of Documentation Transit risks

25 Percentage of Successful Gold Out of 100% Transactions 97% are tainted with fraud

26 Conclusion This presentation provides a general overview of what we have encountered as Loss Adjusters dealing with Gold related enquiries in Africa. Whilst there are many legitimate gold transactions coming out of Africa, Underwriters should be particularly cautious when being approached to write this type of business and should not do so under any circumstances unless a proper survey in undertaken. We thank you for your time and now open to floor for questions.