Govt in $70m equipment deal for miners
GOVERNMENT is negotiating payment terms of a $70 million equipment deal for small scale miners with the South Korean Government.
Mines and Mining Development Deputy Minister Fred Moyo said this week that the equipment was meant to boost mineral production.
The equipment is meant, largely, for small scale gold miners.
Deputy Minister Moyo said discussions for the deal were still in process.
The discussions cover the finer details on implementation of the equipment supply project for the miners, final price and terms of payment.
The Herald Business understands that other beneficiaries will include mines under Zimbabwe Mining Development Corporation and small scale miners in chrome mining.
The mining sector was designated by Government as the driver of short to medium economic growth and generates over half of Zimbabwe’s annual foreign currency.
“We are working on the details of the contract in terms of the payments, prices, implementation and insurance requirements,” he said.
Prior to this, the Government had reached an agreement with Xuzhou Mining Construction Machinery Group of China for the supply of $100 million mining equipment for the small scale miners.
Government decided to engage South Korea for the mining equipment after failing to agree terms with China Export and Credit Insurance Corporation to insure the $100 million loan facility.
Part of the equipment will be given to State owned ZMDC to revive some of its mothballed mines, including five gold producers and a number of small gold miners with strong potential across the country.
ZMDC has a number of potentially viable, but closed mines including gold mines such Jena, Elvington and Kamativi tin mine.
The mines have been constrained by lack of capital to revive them.
Capacitating small scale gold miners is critical considering their contribution to the sector.
In 2015, small scale gold miners accounted for about 43 percent of the 21,4 tonnes of gold produced.
Gold production by small scale miners has benefited largely from support initiatives and incentives extended by the central bank and the decriminalization by Government of activities such as panning.
Treasury has also helped drive production through reduction of royalties for small scale miners and funding for acquisition of equipment.
However, lack of adequate and sophisticated equipment and machinery to extract and process ore continues to hamper the sector.
Governor of the Reserve Bank of Zimbabwe Dr John Mangudya is on record saying that Zimbabwe`s gold reserves are under exploited
Zimbabwe has an estimated gold reserve of around 13 million tones which provides scope for tapping into the resource to grow the economy.
The equipment is also expected to benefit small scale chrome miners who acquired previously claims tributed claims on a substantive basis.
Government, through the Ministry of Mines and Mining Development, is in the process of acquiring 40 000 hectares of chrome rich idle ground for distribution among the small scale miners.
Although initially treated with disdain, many governments in developing countries, particularly in Africa now appreciate their importance.
According to a study by the ministry of Mines there is need for governments, development partners and financiers to support this sector.