Govt sets up $100m gold sector fund
Africa Moyo Senior Business Reporter
Government plans to establish a $100 million gold sector venture fund as it seeks to boost output and build reserves.
The fund is designed to assist miners to re-tool so they ramp up production.
This was said by Finance and Economic Development Minister Professor Mthuli Ncube last week during his interface with Young Professionals in Harare.
Prof Ncube encouraged the suave young professionals who included investment banker, Mr Simba Mhungu — who has worked for top global firm Goldman Sachs in the United States — to consider setting up venture capital businesses to support various sectors of the economy.
“The Minister of Mines (and Mining Development Winston Chitando) and I have decided to set up a $100 million gold sector venture fund,” said Prof Ncube.
“Why? I need gold for gold reserves for a start. So we need to support these entrepreneurs in the sector, mainly focusing on equipment, re-tooling and so forth.”
Venture capital refers to a type of private equity provided by firms to small, early-stage, and/ or emerging firms that are deemed to have high growth potential, or those that have demonstrated high growth prospects.
Experts believe the fund would drive the gold sector to achieve high output targets of up 100 tonnes in the next five years.
With limited financing, the gold sector has performed wonders this year, spurred by small-scale miners, and has already delivered 28 tonnes as at September.
The national target for the year is 30 tonnes and expectations is that the target would be surpassed by December.
Last year, 24,8 tonnes of gold were delivered to Fidelity Printers and Refiners (FPR), the gold buying arm of the Reserve Bank of Zimbabwe.
Currently, miners are tapping from the Gold Development Initiative Fund (GDF) set up by the Reserve Bank of Zimbabwe.
This year, the RBZ set aside $150 million from $74 million last year.
Chamber of Mines of Zimbabwe CEO Mr Isaac Kwesu said he will comment on the venture fund once he gets its “attributes and features”.
“I have no immediate answer because I haven’t studied it. I cannot comment without knowing the attributes and features of the venture fund, such as who is financing it,” said Mr Kwesu.
Zimbabwe Miners’ Federation (ZMF) spokesperson Mr Dosman Mangisi said the setting up of a venture fund would be a “positive move” given that the bulk of small-scale miners are using rudimentary tools such as picks and shovels.
“Most small-scale miners are not mechanised and if this fund is set up, it will be good for them as they will increase output and even help in achieving the 100 tonnes gold output that Government is talking about.”