JOHANNESBURG — 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. The Chamber of Mines expects roughly 500 metric tons of output this year, versus 619 metric tons three years ago.
Economist Roger Baxter of the chamber attributes the production decline to lower worker productivity due to more public holidays and deeper mining that requires more time to get ore out of the ground. In addition, unprofitable mines have been closed, as have shafts with depleted ore reserves.
In the past, it was virtually impossible for a mine to reclaim stolen gold even when it was recovered by the police. The mine had to prove ownership, a difficult thing to do.
BUT now there is hope, thanks to a high-tech invention that can "fingerprint" gold and track exactly which mine it came from.
The laser mass spectrometer can reveal unique patterns for different ore deposits from different areas even within the same mine. It works by separating and measuring the metal's chemical structure.
Anglo-American Research Laboratories in Johannesburg has established a database of gold-ore "fingerprints." It has also established "fingerprints" for some Zimbabwean and South American gold, too.
The Chamber of Mines' members have agreed to collaborate in setting up a South African gold-bullion fingerprint database.
Dan Pollnow, a gold-marketing consultant, says the database has great potential in the fight against smugglers. He cited a case a few months ago of a shipment of gold that purportedly was in transit from Mozambique to be refined in Europe. The new fingerprint method was used, and showed that the gold was actually from a South African mine.
"Certainly we expect [the fingerprinting] to act as a strong deterrent," he says.