ABOUT THE 2024 FIC TRENDS REPORT: WHERE DID THE $3.5 BILLION COME FROM AND WHERE DID IT GO?

ABOUT THE 2024 FIC TRENDS REPORT: WHERE DID THE $3.5 BILLION COME FROM AND WHERE DID IT GO?

By Sean Tembo – PeP President & TONSE ALLIANCE Spokesperson

1. In the past week, l took time to study the 2024 Financial Intelligence Center (FIC) Trends Report. The entire 55 pages. Of particular interest were the contents of page 9, which stated that there was a total of more than US$3.5 billion in illicit financial flows between January and December 2024, and that this largely came from illegal mining in North-Western and Luapula Provinces. This figure is extremely alarming due to its proportionate magnitude. To put it in context, the value of Zambia’s total copper exports in 2024 was only about US$6.7 billion, representing about 820 thousand metric tonnes, and our GDP for 2024 was only about US$29.4 billion.

2. In other words, illegal mining in Zambia, now represents more than half of legal mining, in value terms. But let’s pause for a minute here. When we talk about legal mining, we know where these mines are located. It is your KCM, Mopani, FQM, Kansanshi, etcetera, plus a number of smaller mines dotted across the country. And when we are driving on the roads, we can all see trucks carrying copper, cobalt, manganese etcetera, for export. But with regard to the $3.5 billion illegal mining industry in Zambia, some questions need to be asked. Firstly, where does this illegal mining take place and why can’t we see it? Secondly, what minerals are being mined? Thirdly, how is it possible that a $3.5 billion industry has managed to escape the detection of our law enforcement agencies?

3. Fortunately, the FIC 2024 Trends Report does help us to partially answer the first question and to fully answer the second question. The Report says most of the illegal mining is taking place in North-Western and Luapula Provinces, and that the majority of the minerals involved are gold and other precious metals. That leaves us with part of the first question, about why we are not able to see this illegal mining, and the third question, as to why our law enforcement agencies are unable to detect illegal mining of the magnitude of US$3.5 billion?

4. To put it in context, a mining operation that generates annual revenues of $3.5 billion is a massive operation. We have seen the illegal miners in Mufumbwe and Mumbwa and Luangwa and other parts of the country. And it is evident that those operations are too small in scale to even generate US$10 million per annum, let alone US$3.5 billion. This brings us back to our earlier outstanding questions. Why are we not able to see this US$3.5 billion illegal mining activity, and why are our law enforcement agencies not able to detect this illegal mining activity of such large scale, and put a stop to it?

5. To help answer the above questions, let us put down some facts regarding illegal mining in North-Western and Luapula Provinces. It is a fact that huge amounts of gold reserves were discovered in Kasenseli some time in the year 2020. It is a fact that the previous PF administration decided to incorporate a parastatal company called Zambia Gold Mining and Trading Company Limited in late 2020, and that this company was intended to undertake gold mining at Kasenseli, as well as buy gold from small scale artisanal miners in Mumbwa and other places across the country. It is a fact that when the UPND administration came into office in 2021, they decided to shelf the Zambia Gold Mining and Trading Company, and proceeded to deploy Zambia National Service (ZNS) soldiers to guard Kasenseli Mine.

6. It is a fact that for close to 4 years now, the UPND administration has not taken any tangible steps to commence operations for the Zambia Gold Mining and Trading Company, or to commercialize mining activities at Kasenseli Gold Mine. It is a fact that some time in 2022, a number of ZNS officers guarding Kasenseli Gold Mine were accused of undertaking illegal mining at the site which they were guarding, and the ZNS Command did promise the nation that disciplinary action will be taken against the erring officers. It is a fact that up to this date, no action, if any, taken against any erring officers has been communicated to the public. It is a fact that the FIC 2024 Trends Report cites North-Western Province as one of the main provinces where the $3.5 billion illegal mining is taking place, and further cites gold as one of the main minerals that is being illegally mined.

7. It is a fact that some time in 2022, there were reports of illegal mining of sugilite in Luapula. It is a fact that subsequently, the UPND Government decided to deploy ZNS officers to guard the various sugilite mines in Luapula. It is a fact that the UPND Government further promised to commercialize these sugilite mines which are being guarded by ZNS. It is a fact that up to date, there is no publicly known commercialization of the sugilite mines in Luapula. It is a fact that the FIC 2024 Trends Report cites Luapula as one of the key provinces where the $3.5 billion illegal mining is taking place.

8. It is also a fact that some time in 2023, this country faced a multi-million dollar Gold Scandal in which prominent people and senior Government officials at State House, were implicated. It is a fact that despite several dramatic arrests in this Gold Scandal, no one has actually been prosecuted for the subject offense to date. It is a fact that the aircraft and other property and money, which had been confiscated by law enforcement agencies from the Egyptian nationals that were involved in the Gold Scandal, has since been returned to them.

9. It is a fact that a US$3.5 billion illegal mining operation is unlikely to take place without law enforcement agencies being able to detect it, unless the law enforcement agencies have specifically been ordered to look the other way, or the individuals undertaking or supervising  the illegal mining, are those that cannot be questioned by law enforcement agencies. It is a fact that if ZNS personnel were to engage in an unlawful activity, the Police and other law enforcement agencies would be unlikely, unwilling or unable to apprehend them.

10. Fellow citizens, Zambia is our country. We are all entitled to benefit from its resources. Equally. It is wrong for any small group of individuals to want to benefit from Zambia’s resources, more than every other citizen, simply because of the political office that they may occupy. Each one of us has a duty and obligation to demand for accountability from those holding public office. It is time to know who is sharing the US$3.5 billion generated from illegal mining in Zambia.

*The author is a Forensic Auditor by profession, as well as a Fellow Member of the Zambia Institute of Chartered Accountants (FZICA) who has been in public audit practice for more than 25 years.

///END

SET 25.07.2025