The Sunday Mail
Govt concludes US$100m Chinese equipment deal
MORE than 45 000 small-scale gold miners, most of whom have been struggling to acquire appropriate equipment for their mining operations, will soon take delivery of equipment sourced by Government through a US$100 million China Development Bank facility.
Government guaranteed the facility to expedite release of the funds.
Artisanal or small-scale miners are key to economic growth efforts in terms of employment creation, foreign currency earnings and attracting inward investment.
Mines and Mining Development Minister Walter Chidhakwa told The Sunday Mail Business that Government was seized with modalities of shipping the equipment from China to Zimbabwe.
He, however, could not be drawn into revealing when the equipment will arrive.
“No, I cannot give you dates (of when the equipment is arriving), but all I can say is that the paperwork has been done.
“At the moment, we are working on the modalities of bringing the equipment. We got this equipment under the US$100 million facility for small-scale gold miners so that they boost their operations,” said Minister Chidhakwa.
It is understood that priority will be given to artisanal miners who have been consistently delivering significant quantities of gold to Fidelity Printers and Refiners.
Official statistics indicate that the output from small-scale gold miners, which used to contribute 4 percent to the country’s GDP in the 1990s, had risen to 16 percent by the end of 2013.
Last year, estimates suggested artisanal miners would contribute 17 percent to GDP.
Since 2010, small-scale miners have been contributing approximately 26 percent of total gold production in Zimbabwe.
Of the six tonnes of the yellow metal produced between January and July 2014, 1,3 tonnes — translating to 21 percent — were produced by the artisanal miners.
But throughput in the sector has been adversely affected by lack of mechanisation.
Zimbabwe Artisanal and Small-Scale Miners Council board member (legal affairs) Mr Paul Mangwana said gold output was depressed because of the lack of appropriate technology to haul ore from shafts.
Most miners use buckets to lift ore to the surface, an operation that is considered both labour intensive and commercially unsustainable.
Further, the maximum load that can be lifted through this method is quite low as they use 20kg buckets.
“It, therefore, means that we need technology to haul the ore from the shaft. ZAMSC intends to engage its technical partners such as Appropriate Technology Africa so that they provide small-scale miners with cheaper but efficient equipment to get ore from the ground.
“We are planning to ensure that part of the US$100 million availed to small-scale miners would be used to purchase the equipment,” said Mr Mangwana.
He also said there was need to increase the number of milling centres to reduce incidences where miners lose their ore to robbers on their way to plants.
There are related complaints that some milling companies charge exorbitant prices ranging between US$10 and US$30 per hour, while others are demanding half of the ore as payment.
“The challenge is the quality of the ore, if you get a tonne of ore, which gives you three grammes and at US$35 per gramme, you would have spent US$10 to get about US$100,” said Mr Mangwana.
Meanwhile, Minister Chidhakwa has urged large-scale gold miners to rationalise their production cost structures to ensure profitability.
Some miners were considering lobbying Government to review gold royalties and taxes to ensure viability.
Government revised gold royalties for small-scale producers from 7 percent to 5 percent but retained the 7 percent charge for bigger gold miners.
Royalties for platinum remain at 10 percent.
“Matters of tax are handled by the Finance Minister, but as a ministry we have not received complaints from gold miners saying royalties are high. In fact, royalties for gold are actually lower than those for diamonds and platinum. I, therefore, urge gold miners to look at their operating costs; some of them are actually ridiculous.
“If they are unhappy with royalties, they will come to us but I contend that they must reduce their operating costs,” said Minister Chidhakwa.
Major gold mining firms in Zimbabwe include Metallon Gold and Freda Rebecca (both owned by London-listed Mwana Africa plc), as well as African Consolidated Resources and RioZim Ltd.
Minerals and precious metals account for 52 percent of the country’s export income.
