As gold output climbs, insurance cover lags behind

Nqobile Bhebhe, Features Writer

ZIMBABWE’S mining sector, a key backbone of the economy and the country’s largest foreign currency earner is undergoing significant transformation, with evolving risk trends increasingly shaping the insurance landscape, particularly for artisanal and small-scale miners (ASM).

The sector accounts for over 75 percent of export earnings and has, in recent years, witnessed a surge in artisanal mining activities, especially in gold.

Artisanal miners are now estimated to contribute more than 60 percent of the country’s gold deliveries to Fidelity Gold Refinery (FGR), overtaking large-scale producers.

For instance, in 2025, the country officially delivered a record 46,7 tonnes of gold to FGR, the country’s exclusive buyer of the yellow metal surpassing the previous high of 36,5 tonnes achieved in 2024.

Artisanal and small-scale miners powered this milestone, delivering 34,87 tonnes, which accounted for 74,5 percent of total gold output.

However, while their contribution to national output has grown significantly, insurance penetration within the artisanal segment remains critically low, exposing miners, financiers and the broader economy to substantial risk.

Artisanal mining is inherently hazardous. Shaft collapses, underground flooding, equipment accidents and exposure to harmful substances are common dangers.

In addition, miners face risks such as theft of ore, fire outbreaks and unexpected regulatory disruptions. For many small-scale operators who rely on daily production to survive, a single accident can wipe out years of hard work and plunge families into financial distress.

Despite these realities, insurance penetration among artisanal miners remains very low, officials say.

A combination of limited awareness, mistrust of financial institutions and the perception that insurance premiums are unaffordable has kept many miners outside the safety net. Yet the cost of remaining uninsured often proves far greater when disaster strikes.

Insurance cover can provide protection against workplace accidents, equipment loss, public liability claims and even life risks. With tailored micro-insurance products now increasingly available, there is room for the insurance sector to design packages that speak directly to the needs and cash flow patterns of artisanal miners.

Insurance and pension’s consultant Mr Tinashe Moyo said increasing mine accidents, shaft collapses and flooding incidents have heightened underwriting risk in the mining portfolio.

“Artisanal mining is largely informal, with limited adherence to safety standards. From an insurance perspective, this increases claims exposure, particularly under accident, liability and life cover policies,” he said.

Frequent mine collapses particularly during the rainy season have resulted in fatalities and equipment losses, complicating risk assessment for insurers.

Large-scale mining houses typically carry comprehensive cover, including property damage, business interruption, machinery breakdown, public liability and environmental impairment insurance.
In contrast, most artisanal miners operate without any formal insurance.

Young Miners Foundation chief executive officer Mr Payne Farai Kupfuwa said it was critical for artisanal miners to be insured given the pivotal role they play in the sector.

“Implementing insurance policies for artisanal and small-scale miners in Zimbabwe is a complex issue, but it is a crucial step towards improving safety standards and financial protection. Insurance companies might be hesitant to underwrite policies for ASM due to the high-risk profile of the sector,” said Mr Kupfuwa.

“However, with proper risk assessment and tailored policies, it is quite feasible. As Young Miners Foundation, we have done research and engaged a number of insurance companies and they are willing to tailor-make insurance policies that suit the small-scale miner.

“Some insurance providers are already offering mining insurance products that cover machinery breakdown, property damage, business interruption, medical aid and funeral policies. We have engaged different funeral insurance companies.

“The benefits of insurance cover could significantly improve safety standards and financial protection. Downtime is always high due to accidents — when equipment breaks down or when people are injured. That downtime affects production,” he said.

On safety compliance, Mr Kupfuwa said: “Insurance companies may require policyholders to adhere to safety standards, promoting best practices and reducing risks.”

He added that insurance could also drive sustainability and formalisation within the sector.
“Insurance could encourage formalisation and regularisation of the sector, increasing Government revenue and promoting sustainable mining practices. Of course, the challenge is that some insurance premiums are high and might be unaffordable for artisanal and small-scale miners. But if policies are tailor-made to suit their level, it can work.

“And there is lack of awareness. Artisanal miners might not understand the benefits of insurance or the available processes. We are working to ensure there is awareness using our structures to propagate the importance of insurance to young miners in particular.

“Subsidised premiums or incentives could make insurance more affordable. It shouldn’t be expensive. Awareness campaigns should be ongoing to educate miners about available products and how they work,” said Mr Kupfuwa.

Many artisanal miners operate without full registration, formal contracts or structured financial records — key requirements often demanded by insurance companies.

This informality not only limits access to insurance products, but also makes it difficult for insurers to accurately assess risk profiles.

In an interview, Gwanda-based artisanal miner Mr Themba Ndlovu said while miners are aware of the benefits, one of the key challenges of low insurance uptake is that much of artisanal mining operates informally, making it difficult for miners to meet the documentation and compliance requirements often demanded by insurance companies.

“Mining is risky business and we know that. Accidents happen, equipment gets damaged or stolen. In those situations, insurance would help,” he said.

“But the challenge is that most of us operate informally. Some insurance companies want proper registration documents and financial records, which many small miners do not have. That makes it difficult to access cover,” said Mr Ndlovu.

He added that affordability is another concern.
“Premiums can be high for someone who depends on daily production. When gold deliveries fluctuate, it becomes hard to commit to monthly payments. But at the same time, we know that not having insurance is also a big risk,” he said.

Climate change has also emerged as a major risk factor. Increased rainfall variability has led to flooding of pits and shafts, while prolonged dry spells heighten dust-related health hazards and fire risks.

Environmental liabilities are another growing concern. Artisanal mining, often conducted without proper environmental safeguards, exposes operators to potential fines, rehabilitation costs and third-party liability claims.

“Insurers are increasingly cautious about providing environmental cover to small-scale miners due to the absence of formal environmental management plans,” added Mr Moyo.

A major constraint in extending insurance to artisanal miners is informality. Many operate without registered entities, audited financials, geological surveys or proper valuation of equipment and reserves — all critical for underwriting.

As a result, most artisanal miners remain uninsured.
“We are always talking about formalisation and professionalisation of small-scale mining to regulate. By formalising and professionalising, we reduce the risks and increase access to insurance,” said Mr Kupfuwa.

While some micro-insurance providers and mining associations have introduced simplified products — such as personal accident cover, funeral policies and limited asset protection — uptake remains low.

“Insurance penetration in the artisanal mining sector is minimal. The majority are uninsured against operational risks, health hazards and liability,” said Mr Moyo.

This gap means that when accidents occur, families often rely on community fundraising, while equipment losses can push miners out of business entirely.

Another emerging trend is the rise in theft and armed robberies targeting gold producers. Artisanal miners, who often transport gold in small quantities and operate with limited security infrastructure, are particularly vulnerable.

Insurers now impose stricter security requirements — including the use of licensed security firms and secure storage facilities — before granting cover. Failure to meet these standards often renders artisanal miners uninsurable under conventional policies.

Government has intensified formalisation efforts within the ASM sector through licensing, training and improved gold-buying systems. While welcomed by insurers, compliance gaps persist.

“Insurers prefer dealing with registered mining entities with traceable operations. Formalisation will significantly improve insurability,” an industry executive said.

Zimbabwe’s insurance sector is simultaneously grappling with capital adequacy requirements and currency challenges, which affect its capacity to underwrite large mining risks.

Mining is considered a high-severity risk class and often requires reinsurance support from international markets.

However, reinsurers demand strict compliance standards, conditions that many artisanal operations struggle to meet resulting in higher premiums and tighter policy conditions.

Despite these challenges, analysts say the growing economic importance of artisanal mining presents an opportunity for innovation.

Micro-insurance models and group policies facilitated through mining co-operatives and mobile-based premium payments are being explored to increase coverage.

“There is room to design simplified, affordable products that respond to the realities of artisanal miners. Formalisation and financial inclusion will be key drivers,” added Mr Moyo.

As artisanal miners continue to dominate Zimbabwe’s gold output, surpassing established large-scale producers, the disparity in insurance coverage remains stark.

Experts warn that without improved insurance penetration, the sector remains vulnerable to shocks that could reverse productivity gains and deepen social vulnerability.

Strengthening safety compliance, accelerating formalisation, improving access to financial services and developing tailor-made insurance products are seen as critical steps towards building a more resilient and inclusive mining insurance climate in Zimbabwe.