Miners yet to access $1billion credit facility
SMALL scale miners are yet to access the $1 billion credit facility aimed at reviving their operations affected by the outbreak of the global COVID-19 pandemic.
On May 1, 2020, President Emmerson Mnangagwa announced an $18 billion economic stimulus package to scale up production in all sectors affected by the COVID-19 pandemic.
Out of the $18 billion, a total of $1 billion was meant to support a credit facility to incentivise investment in large scale and small scale mining and speed up implementation of a computerised cadastre system.
But three months down the line, miners are yet to access the fund.
“Nothing has happened yet. We have presented our budgets to the Ministry of Mines and Mining Development as well as the Ministry of Finance but nothing has happened,” Zimbabwe Miners’ Federation Chief Executive Officer Wellington Takavarasha, whose organisation represents all small-scale miners in the country, said.
In its mid-term budget and economic review analysis, Zimbabwe Environmental Law Association (Zela) said it seems the government was not adequately prepared to roll out this program in the mining sector as “there is no progress to talk about since the 1st of May 2020 when it was announced.”
Zela is a public interest non-governmental organisation that seeks to promote environmental justice, sustainable and equitable use of natural resources, democracy, and good governance in the natural resources and environment sector.
According to the mid-term budget and economic review, the resources are already being disbursed to all key areas but the government did not share information on the criteria it has used to allocate the funds to the mining sector and how the priorities are linked to the $12 billion mining strategy.
In its analysis at the end of May, Zela noted that the funds allocated to the various sector of the economy including the mining sector were losing value rapidly due to the continued depreciation in the value of the local currency.
“Now that the amounts have depreciated further before their use, one would have expected the government to increase the funding commitments to generate a meaningful impact on reviving production in the mining sector,” the organisation said.
“Key raw materials needed for mining production require foreign currency and any delays in the implementation of the policy in targeted areas means that the $1 billion will not make any major difference as the local currency continues to lose value,” it said.
Mining is one of the country’s biggest foreign currency earners.
As a means to further growing the sector, the government has since put some strategies to achieve a US$12-billion mining sector by 2023.
Under the US$12 billion mining roadmap, gold is expected to contribute US$4 billion, platinum US$3 billion while chrome, iron, steel diamonds and coal will contribute US$1 billion.
Lithium is expected to contribute US$500 million while other minerals will contribute US$1,5 billion.
But without financial support, it could be hard to achieve the vision.
This article first appeared in the August 2020 issue of the Mining Zimbabwe Magazine