Zimbabwe is endowed with vast mineral resources which are why mining is the largest forex earner. Gold is central to that statistic and that is why recently the government indicated ambitious targets for 2019 in the gold sector. There are at least 500 000 artisanal miners in Zimbabwe which go to show how small-scale miners play a critical role in the mining industry. Lack of adequate and consistent funding is the major setback for small-scale miners who end up using primitive mining methods. This translates into limitations with regards to the yields they produce and accidents tend to be rampant. That is why this recent development boost can really turn things around.
Owing to the importance of gold in the mining industry, Zimbabwe Miners Federation (ZMF) is bent on ensuring gold mining efforts are augmented.
The Partnership Deal
A Chinese company, Live-Touch Investments Pvt Ltd which is operating locally has committed to providing mining equipment worth USD500 000. This shall be in the initial phase and subsequent equipment shall be provided in phases till the sum total reaches USD2 million. The mining equipment shall be distributed to ZMF service centres spread out across the country. All this is projected to be completed by the end of 2019. Some of the major types of equipment to be included shall be bow mills, generators and separators. Lately, production capacities of small-scale miners have been plummeting and this deal is meant to enhance levels of production.
ZMF President’s Remarks
The ZMF President, Ms Henrietta Rushwaya highlighted that this timely intervention was much needed for the small-scale miners. She alluded to the ambitious target of 40 tonnes gold production set for this year. She expressed confidence in the fact that this deal will enable the surpassing of that target. The need to increase scales of production is central to the government’s plans for the mining sector. She said that the overall ambition is to boost investor confidence so that more strategic partnerships like this one can be entered into.
Live-Touch Investments CEO’s Remarks
The CEO, Mr Dongning Wang, said that they are committed to following through with the investment. He indicated that their confidence to make the investment is premised on the favourable investment climate prevailing in the country. He alluded to that investment climate having been made possible by the second republic. He highlighted that as investors it’s incumbent upon them to help host countries’ developmental initiatives. He applauded Zimbabwe’s current trajectory with regards to gold production. Their investment is meant to further enhance current local efforts by assisting small-scale miners.
This deal is a precursor to many other expected partnerships ZMF is planning on entering into with other investors. This shall be done through both public and private partnerships. The thrust is to increase gold production in the country so that we reclaim our position in the London bullion market.
Ambitious Targets For The Gold Sector
The target this year is to produce at least 40 tonnes of gold. The long term objective is to reach a production capacity of 100 tonnes annually by the year 2023. Production capacities of that magnitude will mean that revenue will be in excess of USD4 billion. Contribution to GDP will become 15% whilst contribution to total exports will become 35%. Over USD1 billion is required to achieve these targets which mean this USD2 million investment is a step in the right direction.
I, like many Zimbabweans, can’t help but be sceptical about such announcements of deals. Since the inception of the second republic, there have been many such deals mentioned by the government. Most of them have never seen the light of day implying that either it was window-dressing or they were derailed by greed. The lack of clarity on what the Chinese investors will receive in return is a cause for concern.
The other scepticism lies in China’s general approach to investments that they make in any country. There is a school of thought that China tends to sabotage host countries in which it makes investments by offering employment to its citizens at the expense of local ones. They are also known for doing very little when it comes to developing local communities in the vicinity of their investments. So at the end of the day mention of such deals where the Chinese are involved don’t usually inspire confidence.
We just wait to see if this partnership deal will see the light of day and whether tangible results will be visible. Regardless, gold remains a key mineral in Zimbabwe and efforts to increase its production are always a welcome development. So I guess time will tell.