Business / Companies
$20 million loan facility for Bulawayo companies
25 Apr 2017 at 06:30hrs | Views
GOVERNMENT, through the ministries of Industry and Mines, will this week unveil nearly $20 million funding facility meant to capacitate three Bulawayo-based companies to manufacture equipment for small-scale miners.
Industry and Commerce Minister Mike Bimha said his ministry together with his Mines and Mining Development counterpart, Walter Chidhakwa, will launch the funding facility for three unnamed firms in Bulawayo to produce equipment for small-scale miners.
Minister Bimha would not reveal finer details of the facility, but indicated that it was sourced from foreign and local financial institutions to support companies that had potential to produce equipment required by miners.
Minister Bimha said the financing facility will be launched on Thursday during the course of the 58th edition of the Zimbabwe International Trade Fair, which starts today in Bulawayo and runs until Saturday.
"The facility will be given to, at the moment, three companies, but I do not have their names right, which have the capacity to produce equipment required by the mining industry, particularly for use by small-scale miners. As such, rather than import the equipment the facility will capacitate local producers. The money is for them to retool, re-equip and for them to be able go into production," Minister Bimha said.
"(The funding) was sourced from a number of financial institutions, both local and foreign banks," the minister said.
He said the initiative fell in line with Government's objective of local procurement and a thrust in helping local industry access financing to produce internally.
Minister Bimha said Government was also looking at the possibility of growing the funding facility to include more companies in Zimbabwe's former industrial hub of Bulawayo and other distressed companies across the country.
Small-scale miners, especially those in gold extraction, are now an integral part of Zimbabwe's economic growth, as it emerged that small gold producers accounted for nearly 10 of the 22 tonnes delivered in 2016.
The miners produced 9,68 tonnes last year, representing marginally short of half the country's total bullion production. Gold is Zimbabwe's second biggest foreign currency earner after tobacco, which racked in $600 million last year.
Most small-scale miners, despite financial support from Government, including facilities put in place by the Reserve Bank, still face many challenges to poor equipment.
The flooded mines may hamper output this year and make it difficult for Zimbabwe to reach its 25 tonnes gold output target, according to the Reserve Bank of Zimbabwe, which would translate into a 17 percent increase in 2016.
Government is also negotiating payment terms of a $70 million equipment deal for small-scale miners with the South Korean Government.
Mines and Mining Development Deputy Minister Fred Moyo said recently that the equipment was meant to boost mineral production, especially small-scale gold miners.
Source - the herald