Small-scale miners eye US$35m funding

goldBusiness Reporter
SMALL-scale gold miners have taken steps to unlock at least US$35 million in funding facilities from Government amid indications that there have also been numerous pledges of assistance from other financiers and investors. Gold Miners’ Association of Zimbabwe president Mr Morgan Mugawu said in an interview that small-scale miners were scheduled to meet in Kwekwe last Saturday to discuss the logistics.

The miners met as part of their annual general meeting during which the issue of financial assistance from Government, local banks and investors was expected to top the agenda.

Mr Mugawu said his members were set to meet officials from the Ministry of Mines and Mining Development as the small-scale gold miners met to form smaller organised groups. The groups would be formed to access US$5 million each in the seven mining regions, namely Harare, Bulawayo, Ka- doma, Kwekwe, Gweru, Gwanda and Mutare.

“As a group people will make a proposal of what they require and then the Ministry of Mines and Mining Development will come in and see how they can assist them,” Mr Mugawu said.

He said providing financial assistance to small-scale gold miners was critical considering that they account for about 60 percent of the annual bullion produced in Zimbabwe.

Zimbabwe produced a total of 14 742 kilogrammes of gold last year and output is projected to reach 17 000 by the end of this year if weakening global prices do not weigh down production. In that regard, the association has made arrangements with other potential financiers such as banks and local investors who have reportedly committed to assist small gold miners. As such, Mr Mugawu said small-scale gold miners sought to organise themselves into small manageable units to make disbursement and administration of the funding facilities easier.

While Government would provide US$5 million in funding per region, banks and other investors want small organised groups of miners to provide funding and critical equipment.

“The investors need an association that is organised and an association that has clear structure to be guaranteed that when they provide funding the miners will pay back,” Mr Mugawu said.

He said the banks and investors wanted a specific model of organisation to provide support and were actually ready to extend assistance starting with Midlands region of Kwekwe. But Mr Mugawu said as they restructure to form small groups of miners in each region they would not do away with the requirement for members to produce at least 400g per month.

Funding shortage to procure new and modern equipment remain the biggest challenge to increasing gold production in Zimbabwe even among big and established gold mining companies.

He pointed out that the Environmental Management Authority was also expected to attend the meeting in Kwekwe to raise awareness among the miners on environmental issues.

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