We are not mortgaging minerals says Chinamasa

Government does not intend to use the country's minerals as security for any loans it might acquire, a Cabinet Minister has said. There has been speculation that Zimbabwe was planning or might have used its vast mineral resources to acquire investment particularly from China. Zimbabwe and China signed several investment agreements worth billions of dollars in August when President Robert Mugabe visited Beijing.

Finance Minister Patrick Chinamasa said it would be unwise for Zimbabwe to securitise its minerals because the country did not know the extent of its mineral wealth.

"We have not mortgaged any ounce of gold or carat of diamonds because we have said we cannot do that before any real exploration to determine our mineral wealth is done," he said.

"My plan is not to mortgage anything by saying what we have is exploited to generate cash flows to service our external debts."

"There is no mortgaging or selling of our minerals," Minister Chinamasa added.

The World Bank has also warned Zimbabwe against mortgaging its minerals, arguing that doing that would jeopardise future generations' welfare.

The Breton Woods institution says Zimbabwe would be better off seeking loans at concessionary rates instead of securitising its minerals to secure loans.

Zimbabwe, whose economy buckled under western imposed illegal sanctions, is struggling to attract foreign direct investment and long-term funding to ease liquidity challenges that it is facing.

The country needs a comprehensive financial package to finance the multi-billion dollar Zimbabwe Agenda for Socio-Economic Transformation (Zim-Asset) economic blueprint, which was crafted to guide economic development from 2013-2018.

But due to a huge external debt, estimated at $10 billion, international financiers including the IMF and World Bank are refusing to extend new lines of credit to Zimbabwe.