The Sunday Mail
GOVERNMENT has begun capacitating the Mining Promotions Corporation (MPC) exploration company as a precursor to broader plans to securitise local minerals in order to secure loans and negotiate with potential investors.
Market watchers believe that Government is currently negotiating from a position of weakness as it is unaware of the exact quality, quantity and type of existing mineral deposits.
Securitisation of minerals entails using forecast future mineral revenues to guarantee loan facilities from financiers.
Bretton Woods multilateral financiers are reluctant to extend financial support to Zimbabwe, citing the country’s “unsustainable” debt.
The external debt currently stands at US$6,1 billion.
Previous attempts to carry out a geological survey have been hamstrung by inadequate financial resources, especially for the Geological Survey department, an arm of Government that falls under the Ministry of Mining and Mining Development.
The department is seriously underfunded and cannot undertake a comprehensive mineral resource database.
Although Zimbabwe is estimated to have over 40 different mineral groups, there has not been any survey in recent times to ascertain the quantity and quality of the resources.
The last exploration exercise was done in 1964.
Mines and Mining Development Deputy Minister Engineer Fred Moyo recently told The Sunday Mail Business that Government was aware of the funding challenges crippling the Geological Survey and has tasked the MPC to come up with the figures required to sufficiently fund the crucial department.
MPC was formed by Government in 2013.
“The ministry will fund the department once the exploration company has presented their work programme. The MPC is compiling a work programme which will be funded by the Government,” said Eng Moyo.
The MPC is chaired by the Permanent Secretary in the Ministry of Mines and Mining Development, Professor Francis Gudyanga, with Zimbabwe Mining Development Corporation (ZMDC) chairman Mr David Murangari deputising him.
Mr Daniel Chatora is the acting chief executive officer.
The MPC’s mandate is to create a national mineral balance sheet so that investors get accurate information.
“We must know what we have in measurable ways. Investors will be better serviced (and) we will be a competitive investment destination,” said Eng Moyo.
Recently, Prof Gudyanga indicated in a speech read on his behalf during the joint launch of the Youth and Tourism Enhancement Project and the Governance and Institutional Strengthening Project (GISP) that mining has continued to be the cornerstone for economic development as stipulated in Zim Asset, but the Geological Survey department is gradually losing capacity to generate and maintain a comprehensive geoscientific and mineral resources database which was essential to investors.
“This is mainly due to obsolete and aging equipment and lack of technical knowledge. Most of the equipment was acquired through bilateral technical projects in the 1980s to the 1990s and is now obsolete or beyond repair.
“The department has also not been able to keep pace with new technological developments as a result of perennial underfunding (and) the natural attrition of experienced staff has not helped the situation,” said Prof Gudyanga.
In its 100 years of existence, the Geological Survey has accumulated a huge geological database of mineral resources but it is mostly in analogue format, making it difficult to easily access.
A number of bulletins and maps are said to be out of print and staff in the department is expected to undergo training and get software to generate new information and computerise existing geological and mineral resources data.
Eng Moyo confirmed the country has not done exploration “for some years now” but expressed satisfaction in the fact that “the programme is back on (track)”.
He said since Government has been unable to explore mineral resources, most local mining companies had to rely on exploring minerals on their own.
The method of exploration to be used by the MPC and the Geological Survey department will be guided by the strategic plan to be compiled by the MPC and approved by Government.
There are a number of mineral exploration methods that can be used which include geophysics, remote sensing and geochemistry.
While the Geological Survey department is at the centre of mineral resource evaluation, it works closely with key sister departments such as Metallurgy, Mining Engineering and the Institute of Mining Research.
The Metallurgy department does all the technical analysis of mineral samples from Geology to confirm their economic value while the Mining Engineering department analyses and decides how the resources can be exploited.
“These departments all need critical funding. It is therefore a broad spectrum of skills at play to construct a mineral resource database,” said Eng Moyo.
It is anticipated that some funds for mineral exploration would come from the African Development Bank (AfDB) under the GISP that is funded to the tune of US$8 million.
