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Zimbabwe launches US$10 million gold facility

by Staff reporter
16 Feb 2023 at 04:50hrs | Views
Prospects for increased gold production received a boost yesterday when Finance and Economic Development Minister, Professor Mthuli Ncube launched a US$10 million gold fund targeting small-scale and artisanal miners with half going towards loans and the other half to funding more processing and buying centres.

Artisanal and small-scale miners contribute over half the gold sold to Fidelity Printers, with over 23,3 tonnes of the 35 tonnes delivered last year.

This year, the Government is targeting production of over 50 tonnes to be delivered as a result of the support for artisanal and small-scale miners and expansion of mines by the major mining houses.

The revolving loan facility, will be broken into two, with US$5 million set aside for the establishment of the artisanal gold and small-scale miners fund, while the remainder will be for the gold service centres recovery facility.

The US$10 million was drawn from the US$956 million Special Drawing Rights received by the country from the IMF as part of the US$650 billion disbursed by the global financial institution to assist member States recover from the effects of Covid-19.

The Zimbabwe Mining Development Corporation will build the gold centres while BancABC will disburse the loan fund to artisanal and small-scale miners.

Prof Ncube said the mining sector was the country's largest foreign currency earner and had the potential to contribute more and increase job creation and grow the economy.

"The gold facility has the potential to close the funding gap and spearhead increased productivity as well as finance bankable projects with a focus on value addition.

"Such strategic deployment of resources will ensure that Zimbabwe's Vision 2030 remains on course as we target a knowledge-driven and industrialising upper middle-income society by 2030," Prof Ncube said.

He said Zimbabwe's mineral exports grew from US$1,2 billion in 2020 to US$1,7 billion in 2021 and attributed the 42 percent increase in 2021 to improved gold production and firming global prices.

The US$5 million facility for the construction of six gold centres would improve value addition of the mineral.

A pilot project for the gold centres was launched in Bubi in 2018 and in 2019 Government announced that the centres would be rolled out across the country.

"A gold service centre is a one stop shop that offers technical services to miners, access to a milling centre, access to capital and a ready market for produced gold by small-scale miners to Fidelity Gold.

"This is a holistic approach to service provision, in terms of provision of technical support, transport, milling services, on-site technical guidance to the miners, laboratory services, equipping the miners, purchasing gold realised by the miners and assisting miners repair their broken-down equipment as well as supply of consumables.

"This guarantees provision of feedstock to the centre as well as formalisation of mining activities by miners willing to get services from the centre," he said.

The gold service centres would have a positive impact to the economy through: gold mobilisation; plugging leaks; employment creation; improved mining and safety standards; safety health and environment issues; foreign exchange generation; and formalisation of the artisanal and small-scale miners.

"Adequate capacitation of the artisanal and small-scale miners is critical to ensure that the country achieves the US$12 billion a year mining industry by end of 2023. The mining sector is a liquid sector which has potential to generate adequate capital for reinvestment," Prof Ncube said.

The fund for the artisanal and small-scale gold miners will be accessed through the Mining Loan Fund which is administered by the Ministry of Mines and Mining Development.

"These facilities are revolving funds and as such Government expects the beneficiaries to repay the loans made available to them to enable other beneficiaries to benefit in future. Ministry of Mines and Mining Development, Ministry of Finance and Economic Development and BancABC Bank will closely work together to ensure viability and sustainability of these funds through efficient allocation and recovery programmes," he added.

In his remarks, Mines and Mining Development Minister Winston Chitando said the gold centres would be in Makaha, Penhalonga, Mt Darwin, Mazowe and another at a site to be established in the Midlands.

"The payback period for the facility will range from six months and to a maximum of six years. Vetting will be done as usual at provincial level where the assessments are done by the technical teams.

"Over and above the security that Government will avail, the miners will also be expected to provide some form of security as a show of their commitment," he said.

He said with the US$10 million intervention and other initiatives being carried out by large mines like Pickstone Peerless, Blanket Mine, Eureka and others would result in an increase in production.

"Ideally our target for this year is over 50 tonnes but not necessarily through this intervention but from others by large mines," Minister Chitando said.

Zimbabwe Miners Federation president Ms Henrietta Rushwaya said the artisanal and small-scale gold miners welcomed the initiative. Her federation represents the small miners.

"As Zimbabwe Miners Federation we feel very honoured and privileged by this gesture which has been extended by the Government of Zimbabwe. This sector has been looked down upon for years despite its contribution to the economy.

"In 2022 this sector produced 23,3 tonnes which equates to approximately US$1,2 billion so this industry has become a billion dollar industry and we want to say thank you to Government for recognising us as a sector that contributes significantly to the country's export receipts," she said.

Ms Rushwaya said they would ensure those who benefit first should pay back so that more small scale miners benefit. She promised Government that gold production will increase.

Source - The Herald