LIVINGSTONE MARUFU
Zimbabwe’s gold sector is seeking US$1bn in the next five years to recapitalise operations, Fidelity Printers and Refiners (FPR) acting general manager Peter Magaramombe has said.
He said there was need to increase resources on Gold Development Initiative Fund (GDIF) to provide development finance solutions to the gold mining sector and enhance gold production, productivity and deliveries to FPR.
“As at the end of October 2021, the GDIF had an outstanding funding pipeline of proposed transactions of just above US$20m and this amount is a fraction of the aggregate gold industry funding demand which is currently standing at US$1bn annually for the next five years,” Magaramombe said.
He said the fund will increase gold export value and foreign exchange for Zimbabwe, enhance socio-economic development and drive formalisation of the artisanal and small scale gold miners.
He said the GDIF will also create employment, help rural economic development, alleviate poverty and drive financial inclusion in the gold sector.
Magaramombe said government has set aside US$50m for the miners.
“The total funding requirement is US$50m for the year 2022 and this will be allocated as follows: artisanal miners, small scale miners and gold value chain players will get US$20m with an approximate of 150 miners are expected to benefit from this funding.
“Medium and large scale miners will get US$30m,” Magaramombe said.
The establishment of Gold Service Centres and privately owned Custom Mills will enable artisanal miners to have access to processing equipment.
This will help small scale miners to have funding for capital expenditure and working capital that ensure project viability.
The funding will help the medium and large scale gold miners to enhance exploration, ramp up of installed capacity, resuscitation of closed / dormant gold mining assets, mine development, establishment of new mines and help miners with the working capital.
The GDIF will also help gold value chain players to maintain their capacity to facilitate supply equilibrium required for operation of the gold trade.
Magaramombe said FPR would want GDIF to attain the objectives such as mitigating the effect of sanctions imposed on the country which has hindered the flow of capital into the mining sector, continue with the Financial Inclusion Agenda within the gold mining sector, reducing youth unemployment through creation of jobs within the gold value chain and creating bedrock for the devolution agenda which is dependent on each region becoming self-sufficient through utilisation of natural resources; of which gold is key.
Magaramombe said closing the skills gap through advisory/extension services to gold miners and ensure Safety Health; Environment and Quality standards are adhered to, thus helping to curb mining related accidents which have been prevalent on artisanal and small scale workings and increase in export earnings through increased production and export of gold.
He said formalisation of artisanal and small scale operations which help increase the country’s tax base and ramp up tax collection and promote Ease of Doing Business within the gold sector.
Gold Miners Association of Zimbabwe CEO Irvine Chinyenze said the authorities should do more to support the sector.
“Gold funding has been insignificant and there is a need for the authorities to increase the amount to capacitate the small scale to increase production. We are the golden geese that lay the eggs and we should get higher amounts.
“Though we welcome the development, there is a need to increase the amount to above US$50m from the proposed US$20m,” Chinyenze said.
Despite gold deliveries rising 45% to 25.36 tonnes during the 11 months of the year from 17.44 tonnes delivered to Fidelity Printers and Refiners, small scale miners are largely not formalised and keep selling to the parallel market in fear of paying tax.
