South African Gold Mines Nab Smugglers with 'Fingerprints'

Judith Matloff, writer of The Christian Science Monitor, The Christian Science Monitor

They slip it into their pockets or bags. They coat it with silver or paint it to look less valuable. They hide it in suitcases and spirit it across borders. They are rarely caught.

South Africa is the world's biggest gold producer, and gold is its biggest export earner. But smugglers and thieves are robbing its mines of hundreds of millions of dollars a year at a time when the earnings are needed most.

Police and mining sources estimate that 5 to 10 percent of the country's $6 billion annual production 

is stolen. This translates to $300 to $600 million.

"Mines spend millions of dollars to improve security, but it's difficult to stop gold theft," says Superintendent Piet Otto, head of the Gold and Diamond Theft Department of the South African Police Service. "What we catch is only the tip of the iceberg."

He said workers hoping to make a bit of money on the side often slip gold dust into their pockets. They then sell the gold to middlemen who pass the metal on to organized-crime syndicates.

Sometimes the smugglers use fake papers from Mozambique "proving" the gold was obtained abroad. Some sneak gold through small airports, road borders, or harbors in South Africa where customs security is weak. Others plate gold bullion with silver or shape and paint it to look like a metal part of little value.

Police believe security men at mines are often involved, such as at Kinross mine, where 19 security guards were caught earlier this year. After the arrests, production went up dramatically.

Industry sources worry about the social and economic impact of the smuggling. Jobs may be lost if some mines are forced to close down due to lost profits to theft.

Besides, the smuggling comes at a time when production is already dropping.