A NEW dawn is beckoning for players in the mining sector as the government moves towards boosting gold production to 24 tonnes this year.
A raft of measures has been put in place to ensure that the target is achieved. They include the recent announcement by the central bank governor, John Mangudya, to decriminalise gold possession.
Under the new set up, artisanal miners who are not holders of gold permits will freely trade in the mineral.
However, for the government to fully harness the gold there is need to mechanise the small-scale mining sector by providing it with gold milling plants, among other mining equipment.
It is in this vein that the Zimbabwe Miners Federation (ZMF) has entered into a partnership with a local mining engineering company, Yagden Engineering.
The engineering company will supply mining equipment which includes milling plants to small scale miners at zero deposit.
Silobela area in Kwekwe District has already benefited under this arrangement after receiving the first gold milling plant which has been set up at Peace Mine owned by the Silobela Community Development Trust.
Since then, gold production at the mine has risen to 7 kg per month from 3 kg per month.
With the assistance of Yagden Engineering, Peace Mine is sinking a new shaft which is expected to further raise gold output from the mine.
ZMF president Appolonia Munzverengwi says with the assistance of Yagden Engineering small scale miners can push their production to 15 tonnes this year.
Artisanal miners produced 7, 2 tonnes of the 17, 3 tonnes of gold produced last year.
“We intend to double our production so that by the end of this year we would have reached 24 tonnes. Considering our numbers as small-scale miners, we can surpass the target and even produce more than our big brothers in the (Zimbabwe) Chamber of Mines. The big players will realise that we’re a force to reckon with.
“Our partnership with Yagden Engineering of capacitating small-scale miners through availing mining equipment will be critical in raising gold production. We hope to open three more service centers in different parts of the country which will go a long way in us meeting our gold production targets. The centres will also help plug leakages so that all gold finds its way to Fidelity Printers and Refineries,” she said.
Munzverengwi says three service centres modelled along the Peace Mine plant are set to be opened in Mashonaland East, Mashonaland Central and the Midlands.
Yagden Engineering technical director, Wayne Williams, urged the government to be more involved and support the local engineering companies in empowering small-scale miners.
He says the country has the capacity to enhance production if all players work together.
“We can do much as local engineering companies if we get support from government who are in fact the biggest beneficiaries of the gold. The equipment we manufacture is state-of-the-art modern equipment which has high recovery levels and easy to set up unlike stamp mills.
“The central bank should therefore come on board, finance or even partner us so that we set up service centres where we offer small-scale miners our equipment and they in turn mill their gold. We then have RBZ personnel buying the gold from the service centres and miners getting paid on site,” Williams says.
He says the engineering company has the capacity to double its production and employ more people, if there is increased demand for its products.
An industrialist who produces for the construction, farming and mining sector, Tatenda Karimazondo, who is the operations director of Midlands Metals, says the mining sector lacks cohesion.
“There is no cohesion in the mining sector. What’s needed is for all the players in the sector to come together and map a way forward. The government is talking of 24 tonnes of gold, a figure which could be doubled if there are concerted efforts from all players,” he says.
Karimazondo says Fidelity Printers and Refineries and the Ministry of Mines and Mining Development should come up with a register of small-scale miners. Industrialist can also come up with an arrangement where they supply gold milling plants to these players based on their gold remittances.
“I believe all serious small-scale miners should have their own milling plants and that means more money in their pockets. For us it makes more business sense because there are more than 100,000 such miners in the country. This means more volumes as well as back up spares,” says Karimazondo.
With industry on its knees due to a plethora of economic challenges, there is need for the government to move in and support the remaining industries through incentives and putting in place protectionist policies. The country’s economic challenges have seen industry operating with antiquated equipment, inadequate working capital, punitive power tariffs and lately the firming of the greenback against regional currencies, among other challenges.
Buy Zimbabwe chief executive officer, Munyaradzi Hwengwere, says the government should walk the talk in as far as protecting local industry is concerned.
“The government should at least buy 50 percent of its requirements from local suppliers. If we support the local manufacturers the benefits cascade down to the ordinary person. At the moment the country’s trade deficit is $3 billion which is unsustainable and the only way to arrest this is through goodwill from the government itself which is the biggest spender in the economy.
“We would want to see them supporting local industry by buying at least 50 percent of their requirements locally be it cars or other requirements and this will go a long way in stimulating local industry and increase capacity utilisation.”
A Confederation of Zimbabwe Industries (CZI) manufacturing survey index shows that capacity utilisation was 34, 5 percent last year down from just over 37 percent prior year.
The South African government has taken numerous steps to support localisation, including the designation of a range of sectors like clothing and textiles, buses, rolling stock and power pylons for local procurement by the state under the Preferential Public Procurement Finance Act.
With capacity being shown in the local mining engineering sector, there is a need to lobby government to protect the sector by directing local mining companies to procure from such firms. This will stimulate the sector as well as direct benefits to the local mining industry and the fiscus.