Small scale gold mining has hit Zimbabwe by storm over the past couple of years. Being someone intimately familiar with Mashava I know this too well. Mashava is situated about 40 kilometres outside Masvingo CBD, Bulawayo-bound. The whole town literally sits on the great dyke thus there are numerous minerals found there. There are the famous asbestos mines, and there is chrome – actually one of the residential areas wholly sits on chrome. Then another residential area sits on nickel which has never been mined. Gold mining is lately one of the biggest activities there; gold is plentiful in Mashava. Anyways, this article looks at how you can start a small scale gold mine.
Gold mining has varying degrees of size and sophistication of operations. You will find that there are those now called artisanal miners – operations can start from at least being solo. Then operations can be much bigger to a point where people are employed and a wide array of machinery is used. To note also is that there is another business approach some choose. Some get into the business of specializing in gold buying – that is not really my focus here. We also have those who enter sponsorship deals where they bankroll mining activities of small scale artisanal miners. The catch will be that they get a certain percentage of whatever will be realized from the operation in question.
Then you have those who buy certain specialized equipment e.g. detectors and hire them out based on working agreements. An example of a working agreement is that the owner of the detector would get say, 50 per cent of what will be mined from a surveyed site. These are some of the common approaches in small scale gold mining. In this article, I will be more inclined one securing a claim and then starting a small scale gold mining operation.
There is so much required in terms of starting this business. The first and foremost is to identify your location of interest. This is followed by an approved prospector or pegger verifying whether or not the site is open. In the event it is not, they still can assist you in identifying another site. You will have to purchase a prospecting license from the respective mines office responsible for the province under which the site or mine falls.
Take Note: Supposing the land in which you want to peg the mine is less than 100 hectares, there is a need for you to request written consent from the owner of that land. If it is more than 100 hectares, it is the approved prospector or pegger who will inform the owner of the land regarding their intentions to prospect and peg a mine within their land. When it is more than 100 hectares, the owner of the land is ONLY informed.
If the land belongs to the state, the District Administrator or the respective Rural District Council will need to be informed.
After that, the approved prospector will sort out your paperwork. Later on, he or she will submit a registration notice which will be ratified after the Ministry of Mines visits the site. It is then that you will be given the certificate if everything checks out. So bear in mind that there will be a registration fee, a pegging fee, a site plan, beacon installation, and so on.
Machinery will definitely be needed in small scale gold mining. You can either purchase equipment or you can hire; you can alternately use your discretion to keep operating costs at bay. The list of required machinery is long; some of them are excavators, detectors, jackhammers, pumps, generators, sluice boxes, dredges, various kinds of plants (e.g. cyanidation plant, rock crusher plant, wash plant), gold concentrators, hydraulic jigs, and jaw crushers, just to mention a few.
Human capital will definitely be needed because there are several days to day processes that require manpower. The number needed will vary based on the scale of operations. Some of the areas will require qualified technical expertise.
This line of business is capital-intensive because of the many things required. Just the preliminary stages where you will be dealing with licensing and registration require lots of money. Just to give an example, prospecting license, registration fee, pegging fee, and site plan can cost an approximate total of US$1500. Suffice to say you will need to secure quite a lot of money to start this line of business.
The gold market is always there but there is one major issue. Gold prices fluctuate from time to time. There will be times when it is not ideal to either buy or sell gold. The 3 core metrics that determine gold prices are supply, demand, and investor conduct. Other factors are interest rates, inflation, and so on.
Important Things To Consider
Due diligence is highly important in your journey to starting a gold mine. It is highly advised that you make sure that all documents are in your name when the approved prospector does registration. You must also be sure the stamp of the Ministry of Mines is on those documents. The other thing to ensure is that the correct map is attached – again with your name on it. See to it that the block you are applying for is actually open lest you apply for one that was pegged already. You would be glad to know that you can register through several options namely as an Individual, Private Limited Company, Cooperative, or Syndicate. Registration can be somewhat of a lengthy process that can stretch for 3 months or so – patience will be needed.
If you play your cards well, the returns can be remarkable so give it a try. It is characteristically said that the average cost of producing 1 ounce of gold is US$1200. The price of gold today was US$1796.79 per ounce. So that gives you an idea of the profitability.