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Gold miners edge closer to clinch deal

Gold miners edge closer to clinch deal

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Zimbabwe’s small scale miners are edging closure to sealing a deal with Chinese companies that will supply mining machinery, a move which is expected to boost gold production in the country.

The development has seen gold miners bullish about the prospects of reaching 100 tonnes target by 2023.

Multiple government and mining sector sources said this week small scale miners in conjunction with the Ministry of Mines and Mining Development are at an advanced stage of clinching a deal with the Chinese firms to supply of basic mining machinery to improve the gold output.

“We would like to revisit those areas which we mined in a rush (surface mining) so that we can extract everything on that area. With the basic equipment together with incentives, the 100 tonnes target is within reach,” one well-placed source told Business Times.

Gold Miners Association of Zimbabwe CEO Irvine Chinyenze told Business Times that Zimbabwe could reach 100 tonnes by 2023 if the mining deals with the Chinese firms were to be concluded within the prescribed time frames.

“So far small scale miners are enjoying some best moments in their mining careers as there are incentives and timeous payments at an international gold price.,” said Chinyenze. “I can’t give you the details on the [equipment] deal as this would jeopardise our negotiations but what I can tell you is that the current mining conditions and basic mining equipment would turn a 100 tonne dream into a reality.”

He said the small scale miners have achieved imaginable numbers without equipment.

The country’s sole buyer of gold, Fidelity Printers and Refiners acting general manager Peter Magaramombe said the gold sector needs massive investment.

“Instead of depending on gold rushes we should be attracting long term, ‘patient’ investment into gold mining so that we can ramp-up production. A resolution of current challenges which include equipment investment for small scale, tackle leakages and reopening of closed mines will redirect the country towards the 100tonnes a year target,” Magaramombe said.

Monetary authorities are urging gold miners to increase production in an effort to get high returns from the prevailing international gold prices.

The country’s gold exports receipts shot 132% to US$184.2m in July 2021 from US$79.3m in the same period last year.

Overall, gold export receipts rose 42% to US$648.4m for the seven months from US$457.2m due to 5% incentives, scrapping of taxes on small scale miners and timeous payment in line with the international gold prices.

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Smugglers were believed to be taking out close to 2.5 tonnes every month but with new policies in place, the majority of them are leaving the country in search of greener pastures.

Small-scale miners were also confirmed to be selling their gold to Fidelity Printers and Refiners.

The small scale miners are delivering above 400 kg weekly and more is expected.

Small scale miners, who were behind large scale miners up to May in terms of gold deliveries, eclipsed large mining houses after a scintillating performance in June and July where they delivered over 1.4 tonnes each month.

Small scale miners now account for 52% of this year’s gold output with 6.6 tonnes with large scale accounting for 6.06 tonnes from the 12.7 tonnes delivered by July.

Business Times

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