BUSINESS REPORTER
Finance and Economic Development minister, Mthuli Ncube, yesterday unveiled a US$10 million loan facility for small scale miners to boost production as the government targets an output of 60 tonnes this year.
The loan facility has a tenure of between three and six years.
The first US$5m is for artisanal gold small scale miners fund while the other US$5m is a gold service centre revolving facility.
The facility comes at a time when investment in the mining sector to scale up production is limited.
Most investors are reluctant to support the artisanal and small scale miners due to the inherent risk and complex way of doing business by these miners.
“This US$10m facility is meant to provide support to small scale gold miners. They are underfunded,” Ncube said.
He said the US$5m gold service centre revolving facility will result in the construction of six gold service centres to improve access to critical facilities by artisanal gold small-scale miners.
“The implementing agency for the gold service centre revolving facility will be done by the Zimbabwe Mining Development Corporation (ZMDC).
“In this regard, ZMDC will be responsible for the construction of the gold service centres.
“The disbursement of funds will be done through the BancABC,” Ncube said.
He said the US$5m artisanal gold small scale miners’ facility 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 the government expects the beneficiaries to repay the loans made available to them to enable other beneficiaries to benefit in future.
“The Ministry of Mines and Mining Development, Ministry of Finance and Economic Development and BancABC closely work together to ensure the viability and sustainability of these funds through efficient allocation and recovery programmes,” Ncube said.
The US$10 boost comes as gold earnings decreased 31% to US$115.73m in January this year compared to US$167.5m reported in the same period last year on low deliveries due to production constraints.
Consequently, gold deliveries went down 34% to 1.896 tonnes in January compared to 2.867 tonnes recorded in the same period last year.
Fidelity Gold Refinery general manager Peter Magaramombe said the low deliveries to the country’s sole buyer and marketer of the yellow metal came as small scale miners were affected by heavy rains that made mining difficult.
He said there was need to invest in machinery that could enable the miners to operate even during the rainy seasons.
“This was due to small scale miners’ subdued performance necessitated by heavy rains which filled up the holes and made mining difficult,” Magaramombe told Business Times.
Small scale miners extracted 0.961 tonnes in the reviewed period while primary producers delivered 0.934 tonnes to Fidelity.
Gold is now the single largest foreign currency earner after knocking off platinum and diaspora remittances.
