Miners seek gold loans to boost production

June 4, 2021

TINASHE MAKICHI IN VICTORIA FALLS

Gold miners want financial support through gold loans to boost Production of the yellow metal as the government targets an output of 100 tonnes by 2023.

This comes after government has set an ambitious gold production target of 100 tonnes by 2023.

Mines and Mining Development Minister Winston Chitando told the Chamber of Mines annual conference in Victoria Falls Friday there are various gold mining projects that would assist the government in attaining the gold production target. But there was a proposal by miners to access gold loans, he said.

“We have a target to achieve the 100 tonnes by 2023 and gold miners have stressed the need to facilitate financing facilities to boost gold production.

“Gold miners however have proposed there is need for them to have access to gold for the gold production target to be met. How this will be achieved will be communicated through the chamber,” Chitando said.

He said this target would be achieved through a number of gold producers that are ramping up production. Shamva Gold mine recently resumed production, Caledonia Mining Corporation recently invested on expansion and the Zimbabwe Mining Development Corporation (ZMDC) expects to ramp up production at its Sabi and Jena Mines to 1.68 tonnes annually by 2023, Chitando said.

Sabi produces 240 kg annually while Jena is producing 360 kg. ZMDC has also partnered Kuvimba Mining House to revive operations at Golden Kopje and Evington Mines.

Gold is expected to contribute at least US$4bn annually towards achieving the mining sector’s target of S$12bn industry by 2023.

Chitando said the government was also working with various investors to capacitate small to medium scale gold miners.

Gold production declined over the past two years but miners have remained optimistic of the country’s potential to achieve its target of producing 100 tonnes annually. 

Gold production had dropped from 35 tonnes in 2018 to around 20 tonnes last year due to an unfavourable pricing regime that has fuelled smuggling of the yellow metal.

A number of mining and fiscal measures have since been adopted by government to provide a window of opportunity to revive production and grow the sector.

These included the review of the foreign currency retention ratio in a bid to boost production.

Speaking at the conference Finance and Economic Development Minister Mthuli Ncube said mining plays a critical role in the development of the economy and is contributing 20% to GDP and the government has rolled out incentives to boost production.

“Mining is one of the key economic drivers and on our fiscal part we have come up with various initiatives aimed at boosting production in the sector. These include tax incentives, rebates and adjustment of foreign currency retention thresholds,” Ncube said.

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