malvernmugadzikwa
Oliver Kazunga
Business Writer
The country’s gold industry boasts of more than 4 000 registered deposits, but is failing to develop and achieve output targets because of lack of financing from local banks.
The Chamber of Mines of Zimbabwe (CoMZ) president Isaac Kwesu said this during a workshop organised by the Parliamentary Portfolio Committee on Mines and Mining Development in Kariba this week. The gold industry requires in excess of US$1 billion in the next five years to sustain growth and development of the sector and achieve output targets.
“Local financial markets have limited capacity to finance such huge capital requirements on the back of liquidity challenges,” he said.
Kwesu said where funding was available, it was expensive, adding that foreign investors were demanding gold producers to use their gold as security to secure funding.
The gold industry has huge growth potential to contribute to the Government’s milestones due to attractive gold prospectivity.
In 2019, the Government launched the US$12 billion mining economy by 2023 from which the year metal’s contribution is expected to reach US$4 billion from about US$2,7 billion prior to the launch of the strategic roadmap.
Last year, the value of the mining sector clocked US$5,3 billion and this year the industry’s contribution is targeted at US$8 billion underpinned largely by gold, platinum and diamond.
Kwesu said there is a need for the Government to relax the marketing arrangement and allow gold producers to export their gold and use it for capital raising.
And in terms of gold production per square kilometre, he said Zimbabwe is ranked above traditional big producers including the United States of America, Canada, Australia and Brazil.
“The country has, however, remained largely underexplored, impacting negatively on grades due to limited new discoveries. (the last major gold discovery was Freda Rebecca in 1984 and started producing in 1988).
“Output for the full year 2022 is expected to hit 40 tonnes, buoyed by favourable prices, ongoing expansion projects and Government incentives.
“Despite the increase in output, Zimbabwe’s share of gold production in Africa remains low at around 4 percent (despite doubling from around 1,9 percent in 2010, 2,5 percent (2014) and 3,8 percent (2016),” said Kwesu.
Bongani Ndlovu