Miners, banks tackle finance barriers

ARTISANAL and small-scale gold miners have engaged Government and financial institutions in Bulawayo over barriers to accessing formal finance, with stakeholders calling for more flexible funding mechanisms to enable miners to expand operations and embrace mercury-free processing technologies.

The National Dialogue on Access to Finance for Artisanal and Small-Scale Gold Miners (ASGM), held in Bulawayo on Thursday, brought together policymakers, regulators, financial institutions, development partners, mining associations and miners to explore ways of making the sector more bankable.

The dialogue, organised under the planetGOLD Zimbabwe Project, was held under the theme: “Unlocking

Responsible Finance for Formalised ASGM: Pathways to Investment, Business Growth and Mercury-Free Mining.”
planetGOLD Zimbabwe Project manager Ms Nyaradzo Mutonhori said access to flexible financing was critical if miners were to adopt mercury-free gold processing technologies.

“Today, we are convening a dialogue on unlocking access to financing mechanisms for the artisanal and small-scale gold mining sector to facilitate the adoption of mercury-free gold processing technologies,” she said.

Ms Mutonhori said the planetGOLD Zimbabwe Project was supported by the Global Environment Facility and led by the United Nations Environment Programme in collaboration with the Government through the Ministry of

Mines and Mining Development and the Ministry of Environment, Climate and Wildlife, through the Environmental Management Agency.

She said the project was targeting a reduction of mercury use by 4,85 tonnes by the end of its implementation period in line with the Minamata Convention on Mercury.

“The adoption of mercury-free gold processing technologies is contingent upon artisanal and small-scale gold miners being able to access flexible financing mechanisms that enable them to afford and purchase these technologies,” she said.

Ms Mutonhori said the dialogue was also aimed at addressing financial literacy gaps and finding ways of de-risking the ASGM sector to make it more attractive to banks and other financial service providers.

“Together, we are working on solutions to address the challenges facing the sector, particularly issues around financial literacy and de-risking the artisanal and small-scale gold mining sector so that it becomes more attractive and viable to financial service providers and banks,” she said.

She said financing mechanisms should ultimately focus on ensuring that miners became bankable and could access funding to invest in mercury-free processing technologies.

For the Ministry of Mines and Mining Development, the challenge is not new, with the Mining Industry Loan Fund acknowledging that lack of financing remains a major obstacle to the growth of the small-scale mining sector.

Acting manager of the Mining Industry Loan Fund Mr Ranga Mhazo said financial institutions often considered small-scale mining a high-risk sector, making it difficult for miners to secure loans.

“ASM financing is a perennial problem and, in fact, a global challenge, where there is a significant financing gap for small-scale miners,” he said.

“Financial institutions often regard the small-scale mining sector as high-risk and are therefore not willing or flexible enough to provide funding to small-scale miners. This is largely because many miners do not have the required collateral or fail to meet the criteria set by banks.”

Mr Mhazo said the financing gap had created a vicious cycle in which miners were unable to obtain the capital required to unlock the value of their mineral resources.

He said the Mining Industry Loan Fund was responding to the challenge by providing mining equipment to small-scale miners at competitive prices on a hire-purchase basis.

“This allows miners to access the equipment they need and go to work, enabling them to generate income from their mining operations while making monthly repayments,” he said.

Mr Mhazo said the fund was also reviewing its criteria and requirements to ensure they were aligned with the needs of miners and the prevailing business environment.

“We want to make it easier for miners to access mining equipment, with less bureaucracy and through a more efficient process,” he said.

The fund currently has generators, compressors, jaw crushers, separators and slurry pumps available for miners, with Mr Mhazo saying the equipment portfolio would be adjusted according to the needs of the sector.

Financial institutions, however, said formalisation remained critical for miners seeking access to loans.
FBC Bank business development officer Mr Malvin Chirisa said the bank was attending the dialogue to better understand the challenges confronting ASGM operators and develop appropriate financing solutions.

“As FBC Bank, we are coming in as partners not simply as a bank, but as a financial partner to artisanal and small-scale gold miners,” he said.

Mr Chirisa said the bank recognised the contribution of small-scale miners to Zimbabwe’s economy and had expanded its approach beyond financing mineral extraction alone.

“We have shifted from funding extraction alone to supporting the entire mining value chain. This includes exploration, production, transportation and infrastructure,” he said.

He said FBC offered working capital loans of up to 12 months and asset finance of up to 36 months.

However, formalisation remained a key requirement.

“For us to be able to fund miners, they need to be formally registered and have a valid mining claim. They should also have an Environmental Management Agency certificate and a geological report confirming the presence of gold in the area where they are mining,” he said.

Mr Chirisa said miners seeking to open accounts were required to provide basic documentation, including a national identity document, EMA certificate, mining certificate, mining identification and proof of residence.

He said accounts for small-scale gold miners did not attract a monthly service fee, with the bank charging a two percent transaction fee and a two percent withdrawal fee on mining proceeds.

While financial institutions emphasised formalisation and documentation, women miners said collateral requirements continued to present a major obstacle.

Zimbabwe Miners Federation national secretary for women affairs Ms Jescah Mazivazvose, who is also a gold and chrome miner in Shurugwi, said women were particularly affected because few owned houses or mining claims in their names.

“As women, I think one of the major barriers we face is the issue of collateral,” she said.

“There are very few women who have houses or mining claims registered in their names. So, when you approach financial institutions, they require such assets as collateral, and this becomes a major challenge for us as women miners.”

Ms Mazivazvose called on stakeholders to provide miners with more information and financial literacy support to enable them to understand the requirements for accessing finance.

“At times, we simply do not know what we are supposed to do, particularly when it comes to planning and knowing the right steps to take,” she said.

She said the dialogue had equipped her with skills and information that could help improve her mining operations.

“Through this workshop, I believe I have gained quite a number of skills and valuable information that I can take home. This knowledge will help me improve my operations, run my mining business better and ultimately grow my mining activities,” she said.

The dialogue comes as the Government seeks to formalise and modernise the ASGM sector while reducing the environmental and health risks associated with mercury use.

Stakeholders said improving access to finance, strengthening financial literacy and formalising mining operations were key to unlocking the sector’s potential while enabling miners to transition to cleaner and more efficient gold-processing technologies.

The discussions also highlighted the need for stronger collaboration between Government, financial institutions, development partners and miners to develop financing models that reflect the realities of the ASGM sector.