Business / Economy
'Zim govt will not mortgage minerals,' says Chinamasa
02 Jul 2014 at 16:32hrs | Views
Government will not consider using the country's mineral resources as leverage to mobilise funds needed to revive the economy before conducting geological surveys of the resources available, an official said today.
Speaking at a lecture on ZimAsset's projected contribution to national security and development at the National Defence College, minister of Finance and Economic Development Patrick Chinamasa said government had rejected proposals from investors who had suggested they mortgage the country's minerals.
"While most investors seem to be looking at leveraging our mineral resources, we continue to encourage them to explore other innovative funding models that do not insist on government sovereign guarantees.
"They want sovereign guarantees that give them a whole mountain or the whole great dyke and l have said no. I cannot make any guarantees that basically mortgage a whole mountain with mineral of which l don't know what reserves l have underneath," he said.
He said Zimbabwe has not done any geological surveys to determine the quantity of reserves in the ground because of lack of funds for the study.
"Until we have done surveys, we are not in any position to avail ourselves to leverage resources against our mineral wealth. My priority at the moment is to secure resources to do geological surveys. When we know what we have, it becomes easier to engage financiers on that level," he added.
Minister Chinamasa said government would instead identify mining operations that are bringing in revenue and use their cash flows as guarantee for any loans availed to the country.
He also said potential investors should consider working with the private sector to resuscitate the productive sector and expand and the economic cake and hence the taxable base.
Speaking at a lecture on ZimAsset's projected contribution to national security and development at the National Defence College, minister of Finance and Economic Development Patrick Chinamasa said government had rejected proposals from investors who had suggested they mortgage the country's minerals.
"While most investors seem to be looking at leveraging our mineral resources, we continue to encourage them to explore other innovative funding models that do not insist on government sovereign guarantees.
"They want sovereign guarantees that give them a whole mountain or the whole great dyke and l have said no. I cannot make any guarantees that basically mortgage a whole mountain with mineral of which l don't know what reserves l have underneath," he said.
He said Zimbabwe has not done any geological surveys to determine the quantity of reserves in the ground because of lack of funds for the study.
"Until we have done surveys, we are not in any position to avail ourselves to leverage resources against our mineral wealth. My priority at the moment is to secure resources to do geological surveys. When we know what we have, it becomes easier to engage financiers on that level," he added.
Minister Chinamasa said government would instead identify mining operations that are bringing in revenue and use their cash flows as guarantee for any loans availed to the country.
He also said potential investors should consider working with the private sector to resuscitate the productive sector and expand and the economic cake and hence the taxable base.
Source - BH24
