Sinosure to underwrite $100m Zim loan facility

Mines and Mining Development Minister Walter Chidhakwa says Chinese company Xuzhou Construction Machinery Group (XCMG) is seeking insurer, SinoSure to underwrite the $100 million loan facility for small-scale miners before disbursements to Zimbabwe. Minister Chidhakwa said in an interview that XCMG told him that it has received informal commitment from the State funded insurance company and is now awaiting formalisation of the commitment. Gold mining is strategic to the growth of the domestic economy in light of the fact that together with platinum, the sector account for over half of the country’s foreign exchange earnings generated from mining.

“It is our hope that this is done early so that early 2016 we start disbursing the equipment,” he said.

The minister said the speed at which the deal will move now largely depends on the Chinese companies. The $100 million facility was consummated in 2014, but no money has been released under the much hyped equipment credit facility. XCMG from Zimbabwe wanted a Government guarantee, which was granted.

XCMG is the 5th largest mining equipment manufacturer in the world. Funding of small miners has become priority for Government amid phenomenal growth in output after decriminalisation of artisanal mining and significant reduction of royalties paid by the small miners. Latest figures from Fidelity Printers and Refinery show that small scall miners delivered 5.11 tonnes of gold in the nine months to September.

Over 50 000 small scale mines are set to benefit through the facility. The facility is administered at CBZ and attracts a 4,5 percent interest rate over a period of 36 months. Minister Chidhakwa said gold production is targeted at 20 tonnes this year owing to the much greater compliance with regulatory policy requirement to sell to Fidelity Printers and Refiners.

Government early this year instituted a Gold Mobilisation Committee to monitor transparency and accountability in the gold mining sector. Last year it also cancelled individual gold buyers’ licences after an upsurge in leakages mainly due to smuggling of the mineral outside the country. – Wires.