Gold miners seek easier access to formal finance

ARTISANAL and small-scale gold miners are engaging Government and financial institutions in Bulawayo on Thursday over barriers preventing them from accessing formal finance to expand their operations and adopt mercury-free technologies.

The National Dialogue on Access to Finance for Artisanal and Small-Scale Gold Miners (ASGM), being held at a local hotel, comes as many small-scale mining operations continue to struggle to secure formal loans because of informality, inadequate business systems, limited financial literacy and lack of collateral.

The dialogue, organised under the planetGOLD Zimbabwe project, is bringing together policymakers, regulators, financial institutions, development partners, mining associations and ASGM operators to explore practical ways of making the sector more bankable and improving access to investment.

The meeting is running under the theme: “Unlocking Responsible Finance for Formalised ASGM: Pathways to Investment, Business Growth and Mercury-Free Mining.”

ASGM plays a significant role in Zimbabwe’s economy and provides livelihoods and employment, particularly in rural communities, but a significant number of operators remain outside the formal financial system.

According to the organisers, informality, weak business systems, limited financial literacy, lack of collateral and inadequate understanding of financiers’ requirements continue to prevent miners from accessing investment and credit facilities.

The situation has left some miners dependent on informal financing arrangements, which can limit productivity and investment in safer and environmentally responsible mining methods.

The dialogue is therefore expected to examine how formalisation can be used as a gateway to finance while ensuring that financial support contributes to responsible mining practices.

The planetGOLD Zimbabwe project is supporting regulatory reforms aimed at encouraging formalisation, strengthening miners’ business and financial management skills and facilitating access to existing financing mechanisms.

Working with the Ministry of Mines and Mining Development, Zimbabwe School of Mines, financial institutions and other stakeholders, the project seeks to improve the investment readiness of ASGM groups and facilitate access to finance for at least 20 groups.

The initiative comes at a time when access to affordable finance remains critical for miners seeking to move away from rudimentary operations towards more productive and environmentally responsible enterprises.

The dialogue will provide a platform for miners to engage directly with financiers on the products available, eligibility criteria and lending requirements.

Financial institutions are also expected to explain why some miners fail to qualify for loans and what changes could make ASGM operations more bankable.

The discussions will also focus on the management of environmental, social and governance risks associated with financing ASGM.

Another key issue will be how financing mechanisms can support the adoption of mercury-free technologies.
Mercury use remains a major environmental and health concern associated with artisanal and small-scale gold mining, making access to finance for cleaner technologies an important component of efforts to formalise the sector.

The dialogue will also interrogate the policy and regulatory environment governing ASGM financing.

Among issues expected to come under discussion are the Mining Industry Loan Fund and FGR Starter Packs, Government incentives for miners, and how formalisation and environmental compliance can help unlock access to finance.

The involvement of miners themselves is expected to give the discussions a practical dimension, with representatives of mining organisations expected to outline the challenges they encounter when seeking finance.

The discussions are also expected to provide a platform for stakeholders to move from broad commitments to practical measures that can unlock finance for the country’s small-scale gold mining sector.

For a sector that contributes significantly to livelihoods and gold production, improving access to formal finance could be a crucial step towards transforming ASGM from predominantly informal operations into sustainable, productive and environmentally responsible enterprises.