Miners need US$12 billion for projects, investors told

Kudzanai Sharara in London, UK

Zimbabwean miners require close to US$12 billion for current and new projects, according to Chamber of Mines of Zimbabwe chief executive officer Isaac Kwesu.

Speaking during a panel discussion at the Zimbabwe Capital Markets and Investment Promotion Conference held on Tuesday Kwesu said there is “a huge funding gap that our operating miners require financial solutions either for replacement or new capital for projects” .

The funding gap comes at a time local banks have a lending pool of just US$3 billion.

Further, the deposits in the banking sector are demand deposits not suitable for the long term facilities required by the mining sector.

Recently, Bankers Association of Zimbabwe President Lawrence Nyazema revealed that 90 percent of deposits are in current accounts, which “means these funds must be accessible on demand”.

“As we speak right now, we have a US$11.8 billion funding gap, half of which is required by PGM miners.”said Kwesu.

According to Kwesu PGM miners already in operation require US$2 billion while new PGM mines require US$4 billion.

The Gold sub-sector is in need of US$1,5 billion, coal US$400 million, Kwesu said.

The funding gap in the mining sector comes as Finance, Economic Development and Investment Promotion Minister Mthuli Ncube told the same Conference that Zimbabwe
“currently lack investment banks capable of driving a multitude of investment possibilities.”

The Minister said an investment bank would unlock a range of investment opportunities and empower local businesses.

Minister Ncube highlighted the need for “introducing additional new instruments such as catastrophic bonds, green bonds, infrastructure bonds, diaspora bonds, and SME Infrastructure bonds.”