Itai Ndongwe/Pride Mzarabani
The Zimbabwean government is launching a critical push to revitalise its small-scale gold mining sector, with a $10 million investment aimed at formalising the industry and providing miners with the technology and tools they need to operate efficiently and sustainably.
The investment will be channelled through the Mines Loan Fund, a Ministry entity that provides equipment to small-scale miners on credit. By providing miners with better tools and technology, the government hopes to increase productivity. Formalising the small-scale mining sector is also a strategic move to address the challenges associated with informal mining practices, such as illegal activities and revenue leakage.
The small-scale sector contributes 60% of the country’s mining sector and is losing the country millions of greenbacks due to leakages.
The Mines and Mining permanent secretary Pfungwa Kunaka told FinX on the sidelines of the Gold Mobilisation workshop in the capital that, “In terms of capital, when we are talking of small-scale miners, we are not just looking at chrome; the gemstone is not a true capital incentive; we are talking of small-scale miners across, and US$100 million is needed.
He added that the pace of formalisation has not been very fast due to the issue of capacitation and that the government is working on it.
The fund is not only looking at digging equipment, but also at processing plants to add value to the minerals, and other financial institutions, like ZB, have joined forces to support the miners. Fidelity and MMCZ are also providing funding to support the miners, with MMCZ pledging $10 million to help miners become fully operational.
The Minister of Mines, Chitando, told the media that the 2024 second gold mobilisation exercise will be held in all of the country’s eight provinces to ensure that the newly established currency (Zimbabwe Gold) is anchored on gold, hence the need to ensure that all gold trades in this country are conducted through fidelity gold refineries.
He also urged miners to maximise on volume so as to capitalise on the current gold prices. The gold price is trading at US$2500 per ounce.”It is absolutely important as a country that we maximise on volume and also on the unity price. At a time when market prices for other mineral commodities are due, you see platinum, lithium, and almost all other commodity prices are subdued, but gold is on the increase.
“So it is important, and as a country, in terms of our foreign exchange, gold, as we know in the mining industry, is the major generator of foreign currency, and we have experienced this significant decrease in commodity prices, but gold has gone up. So it is important that we maximise the volume that comes. Gold has long been a source of wealth and prosperity for development, and it holds immense potential to fuel our economic growth,” he said.
For the year 2023, gold deliverance through fidelity gold refineries stood at 30.1 metric tonnes, and for this year 2024, the gold deliverance target through fidelity gold refineries is 35 metric tonnes, and the key to realising this target is the plugging of leakages to side markets that are hindering the development that we all aspire to achieve.
For the year 2024, from January to August, the gold deliverance through fidelity sits at 20.7 metric tonnes against the annual target of 35 metric tonnes, and in comparison with the 2023 year, for the same period, the gold deliverance was 19.3 metric tonnes, which means that there was a 7.2% increase in the deliverance for this year. “It should be more. Because of the increased price, you find that in theory, some of the old bodies that could have been merged now are now profitable,” Chitando added.
