Government too broke to unlock $100mln Chinese loan, small-scale miners in limbo

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by The Source

THE government should release the $100 million loan facility allocated to small-scale miners last year by the Chinese company, Xuzhou Construction Machinery Group to boost the sector, Parliament heard on Monday.

Chrome Mining Sector in Zimbabwe: The Chininga Report

Chrome Mining Sector in Zimbabwe: The Chininga Report

The loan facility was signed by the Zimbabwe Mining Development Corporation in June last year and is aimed at supporting the small-scale mining sector to acquire equipment, to improve viability, mining standards and boost mineral production. But government is struggling to raise 30 percent of the amount required to unlock the facility.

Presenting oral evidence before the mines and energy portfolio committee, the Women Association in Business Alliance in Zimbabwe (WABAZ) said artisanal miners were finding it difficult to access the loan to carry out meaningful mining activities.

“Mining is generally capital intensive and requires significant investment and hence the need for access to financial resources for investment in expensive modern mining technology for any meaningful gains to be made in mining,” WABAZ chairperson Judith Mhizha said.

She said women in mining must have equal access to the fund and that there should be clear on criteria of who benefits and how women can apply.

“The criteria for women should take into account previous historic misbalances and aim at uplifting them to the same level as men in the field,” she said.

She said there was need for government to recapitalize the central bank and Fidelity Printers to enable the latter to provide competitive prices for gold and also set realistic targets that enable small scale women miners to have access to remit their gold.

“By capitalising these institutions, the benefits of smuggling may be extinguished and all gold produced in Zimbabwe can be channeled through Fidelity printers,” she said.

Mhizha said women artisanal miners were also complaining of high regulatory taxes, fees, levies and royalties.

A small-scale miner is required to pay $1,500 for registration and a milling license which costs $8,000.

The Environmental Management Authority also requires an environmental impact assessment certificate before mining activities commences which costs between $3,000 and $10,000.

EMA also requires two certificates on hazardous chemical and waste management which range from $500 to $1,000.

Rural district councils also charge between $200 to over $1,000 to miners.

“This then acts as a barrier to entry and thus hindering informal miners from formalizing operations,” she said.

The women miners are also unhappy about levies charged by Fidelity Printers comprising six percent commission, seven percent royalty and two percent presumptive tax which Mhizha said was too high.

They also called for different licencing fees for artisanal, small-scale and big mines.

About 26 percent of total gold production in the country since 2010 has been coming from small-scale miners, according to official data, while at least 65 percent of known gold deposits are estimated to be in the hands of small scale miners.