Nedbank dangles US$300m to Zim miners

TINASHE MAKICHI

Financial service provider, Nedbank Zimbabwe, says it is seeking a US$300m offshore funding facility from its parent company, Nedbank Group, to finance local mining companies.

The latest development comes at a time when several local miners have planned to undertake greenfield as well as brownfield mining projects.

But, some projects have failed to take off the ground while other miners have failed to complete projects due to huge capital outlays.

Consequently, miners have expressed frustration over their failure to access international capital to get their proposed projects off the ground.

Nedbank Zimbabwe chief executive officer, Sibongile Moyo told the Chamber of Mines  of Zimbabwe last week that the lender saw the funding gap  and was now mobilising US$300m from Nedbank Group for  local miners.

 “There is a funding gap in the market judging by most banks’ balance sheets but as Nedbank we have proposed a US$300m offshore facility aimed at providing funding for mining companies,” Moyo said.

She added: “Due to the funding gap on the market, large miners have relied on offshore funding while junior miners have been relying on venture capital and pension funds.”

Moyo said the bank was also funding small mining players who have contracts backed by off-takers.

This assistance has been mainly channelled towards chrome where there is tributary mining usually backed by off takers.

“We have made good progress on small mining players because some of them have contracts backed by off-takers,” she said.

As part of expanding its footprint in the mining sector, the Nedbank in 2018 re-modelled its operations towards registering presence into mining cities around the country after securing lines of credit with Afreximbank for lending in the mining and other economic sectors.

Nedbank Group has placed a particular priority on adding value to African mining companies.

This is done through the provision of expert advisory services delivered by experienced teams based in London and Johannesburg.

NedGroup Investment Africa holds 67.48% shareholding in Nedbank Zimbabwe while Old Mutual Zimbabwe is the second largest shareholder with a 20.9% stake.

The financial institution is now one of the top tier banks in the country and this was driven by its quest to fund the private sector, mining and emerging small to medium enterprises sector.

The bank delivered strong financial performance with substantial growth in operating income and profitability and displaying resilience in a challenging operating environment during the year to December 31, 2020.

Its operating income grew to ZWL$3.4bn in inflation terms from ZWL$2.9bn in the prior year.

The bank reversed 2019 loss to achieve inflation adjusted total comprehensive income of ZWL$159m, while deposits grew to ZWL$11.3bn from ZWL$2bn in 2019.

Related Articles

Leave a Reply

Back to top button