Gold service centres: The great mining fuss

11 Jun, 2017 - 00:06 0 Views

The Sunday Mail

Tendai Chara
THE announcement by the Ministry of Mines and Mining Development that the first gold service centre was to be opened in Zhombe in the Midlands area aroused great excitement in the local mining sector in 2015.Enthused, the gold mining and services sector gave the pronouncement a seal of approval as it anticipated a revolution in the small-scale gold mining sector.

Barely a year after the pronouncement, the anticipated pilot project suffered a stillbirth due to a lack of funding. In 2016, the Silobela Community Development Trust-run Peace Mine then made history by becoming the country’s first ever functional gold service centre, gave the mining sector another fresh wave of hope.

A gold service centre is an establishment where all the functions related to gold mining – from extracting to processing and sales – are coordinated from. A typical gold service centre would be comprised of a clinic, offices of the Government’s official gold-buying firm Fidelity and firms that sell or hire mining equipment.

The centres will offer such services as gold milling, collection points and assists with environmental impact assessments. Geologists, engineers and metallurgists will also be stationed at such centres. Millers and officials from the School of Mines will also set up bases at the centres to teach miners on health and safety issues.

Downstream beneficiaries such as hotels and grocery shops among others will also benefit from such a centre. Gold service centres are aimed at boosting gold production and to curb leakages.

They are also meant to formalise the artisanal miners and to promote self-reliance and beneficiation in the small-scale gold mining sector.

Small-scale miners often face challenges such as lack of basic infrastructure, equipment, lack of geological information, unskilled labour, scarce financial support and lack of collateral. The establishment of the centre at Peace Mine was hailed as a positive development, which was set to become an example of how gold centres can address most of the challenges that are faced by small-scale miners. Although the Silobela centre lacked most of the basic features of a proper gold service centre, this community initiative was given a thumbs up and applauded as a step in the right direction. Before the setting up of the Silobela centre, locals engaged in illegal gold panning activities and conducted their business in a dangerous environment in which they were often arrested.  Gold buyers often took advantage of the panners and offered low prices.

The setting up of the centre was a major transformation as the miners sold their gold on sight. The gold was being sold directly to Fidelity, therefore, avoiding leakages.

In a major setback, the Ministry of Mines and Mining Development last year ordered the closure of Peace Mine as an ownership wrangle pitting the Silobela Community Development Trust and the Silobela Community Ownership Trust took its toll.

Before the closure, the mine was producing an average of 5kgs of gold every month. As a result of the closure, Government has so far lost more than 75kgs of the precious metal.

When The Sunday Mail Society visited the mine last month, the shafts were waterlogged and electricity has been disconnected. Water pumps are still underground, collecting rust in the process.

Before the closure, Peace Mine had two connecting shafts and was one of the most mechanised small-scale mines in the country. The mine boasted industrial compressors, drills, water pumps and jack hammers, among others.

The mine not only empowered locals but also created employment with 40 people, mostly war veterans, being employed as guards. Some of the trust’s notable achievements include the electrification of the centre at a cost of US$20 000 and the acquisition of a US$75 000 processing plant.  Electric compressors were also acquired at a cost of US$16 000. The modern processing plant had a crusher, bow mill and a separator, which was capable of processing two tonnes of ore per day.

Peace Mine scooped a number of awards run by the Zimbabwe National Chamber of Commerce and the Zimbabwe Chamber of Small to Medium Enterprises.

Despite these achievements, the mine remains shut, depriving hundreds of thousands of people decent livelihoods. The closure is a setback to Government’s initiative to bring sanity to the mining sector. Mr Wellington Takavarasha, the president of the Zimbabwe Miners Federation is on record saying the mine will only be opened after the necessary safety measures have been put in place.

Mr Aurther Mzingeli Nkiwane, the chairman of the Silobela Development Community Trust bemoaned the current state of affairs at Peace Mine. “We were a shining example of how gold service centres should be managed. Unfortunately, some people elected to derail our efforts as they seek to satisfy their egos,” Mr Nkiwane said.

The licensing of artisanal miners has, however, brought sanity to the small-scale gold sector and is enabling Government to mop up all the gold currently in the hands of informal and unregistered miners.

According to the Zimbabwe Miners Federation, between 70 and 85 percent of the rural population is into mining with 70 percent involved in gold mining while 30 percent is into chromite, tantalite and other semi and precious minerals. ZMF further states that illegal gold panning provides a livelihood for about 500 000 people and that about two million people depend on mining.

In 2014, Government allocated US$100 million to small-scale miners in the national budget. The Mining Industry Loan Fund was allocated US$460 000, which was earmarked for the acquisition of mining equipment. An Act of Parliament is set to officially formalise the operations of artisanal miners.

According to the Zimbabwe Miners Federation, small scale miners contributed almost half of the nation’s total production between 2012 and 2013. The African Development Bank reports indicate that gold deliveries from small-scale miners have steadily risen compared to large scale producers. To avoid gold leakages and to ensure increased gold deliveries, Government established the Gold Compliance and Enforcement Co-ordination Unit. The unit co-ordinates all the compliance and enforcement operations across all gold producing areas in the country.

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