“Most beneficiaries are not aware that $74 million was disbursed in 2017 and that the funding has been doubled to $150 million in 2018. Furthermore, there is need for awareness raising on issue of collateral, especially acceptance of cattle as collateral security” Themba Sibanda, Zimbabwe Miners Federation organising secretary
Faced with severe foreign currency shortages, the Reserve Bank of Zimbabwe (RBZ) is banking on the propulsive role gold to drive export earnings. In its 5-year plan, RBZ has a target to produce 30 tonnes of gold annually by 2020 (2015 Monetary Policy Statement). Previous peak gold production was 27 tonnes, produced in 1999, at a time when contribution from Artisanal and Small-Scale Mining (ASM) was meagre, around 5%. As part of the measures to boost gold production, RBZ identified the need to harness the potential of ASM by funding mechanisation of small scale mining. Through the 2018 Monetary Policy Statement (MPs), RBZ announced that ASM gold sector funding has been doubled to $150 million. The same MPS revealed that in 2017, $74 million was disbursed to 255 small scale miners. Remarkably, last year (2017), ASM gold production surpassed that of large scale producers, accounting for 53% of the total gold production: 24,843.87kgs. Along with the “no questions asked policy” on gold deliveries to Fidelity Printers and Refineries (FPR), gold mobilisation fund is credited for boosting gold production in the ASM sector.
Find below some basic facts in numbers that can help to answer whether increased funding by RBZ to the ASM gold sector is a jack pot for miners: an analysis of the 2018 Monetary Policy Statement;
- 1 symbolises that RBZ through FPR is the sole gold buyer and exporter in Zimbabwe
- $74 million was disbursed to small scale miners in 2017 255 small scale miners benefited from $74 million disbursed in 2017
- The number of women who benefited from the RBZ’s loan facilities is not known as the number of beneficiaries is not disaggregated to show how many women and men benefited from the facility
- There are about 10,000 registered small-scale miners in the country according to Zimbabwe Miners Federation (ZMF). Percentage wise, RBZ fund was accessed by 2.5% of the registered small-scale miners.
- Averagely each miner got around $290,000 from the $74 million disbursed by RBZ to 255 small scale miners.
- 2,960 is the number of small scale miners that would have received support from the RBZ since most small-scale miners need around $25,000 to mechanise their operations. Basic equipment includes a compressor, jack hammer, generator, small hammer mill and a water pump.
- $75 million is supposed to be received by women in ASM gold sector If RBZ comply with constitutional requirement, Section 13 (3) to afford women equal development opportunities, because $150 million funding is earmarked for 2018.
- The number of opportunistic investors who shifted into gold mining to take advantage of the loan facility is not known as beneficial ownership of the loans was not disclosed. The risk being that some businesses which benefited from the loan could be driving illicit financial flows by illegal using gold as a currency to finance their imports due to foreign currency shortages.
- No amount has been set side to encourage rehabilitation and closure of gold mines. Much as the nation experts to benefit from increased gold production by earning much needed foreign currency, generation of jobs and incomes, environmental challenges should not be a blind spot. Innovation is needed, for instance, the conversion of 10% export incentive scheme to a fund that can be used to incentivise mine rehabilitation.
- $150,000 is the value of equipment support given to Zvishavane-Mbrengwa small scale miners association in 2015 by Mimosa Mines’ corporate social investments. Can RBZ take a leaf from this and help to strengthen small scale miners’ associations who are critical players to formalisation of the ASM sector through self-regulation.