The gold sector received major impetus after the Reserve Bank of Zimbabwe (RBZ), disbursed $100 million out of the $150 million Gold Development Initiative Fund (GDIF) and plans to review the facility upwards following overwhelming applications by small-scale miners.
Addressing gold miners at the Matabeleland Gold Mining Conference in Gwanda recently, Fidelity Printers and Refiners (FPR) head of GIDF Matthew Chidavaenzi, said the Central Bank was highly satisfied with the uptake of the gold support scheme by small-scale miners.
“We have had excess support from miners. We were given $150 million and already we have disbursed $100 million but the pipeline applications, which we are currently vetting, are in excess of $50 million,” he said.
“So, it means that already we have surpassed our target but I think what gives me hope is that my board of directors, the Governor (John Mangudya) of the RBZ and even RBZ officials who are here today have indicated clearly that the Governor is willing to keep supporting this fund.”
Chidavaenzi said the GDIF division was seized with processing huge numbers of loan applications by small-scale miners from various parts of the country.
“We currently have a huge backlog with regards to clearing loan application but we have set ourselves a target that by September 15 we should be done with anyone who applied for the loan,” he said.
The GDIF facility was launched by the RBZ in 2016 as part of initiatives to capacitate small-scale miners and boost gold production. This has seen small-scale miners break production records and delivering more gold than large-scale heavy weight mining power houses. At its inception, the facility, which is administered by FPR was $20 million but the Central Bank kept on increasing the fund due to its high uptake by the miners.
About 60 percent of the fund has been allocated to Matabeleland region and Midlands Province only with Matabeleland accounting for $40 million of which Matabeleland North Province received $28,7million and Matabeleland South Province $11 million.
Chidavaenzi said the high uptake of the gold support scheme has over the last two years contributed to the increased yellow metal output in the country.
“Most gold has been coming more from small-scale miners, which explains that there is a corresponding increase, as they get more funding they are also able to produce more. So we feel the fund to date, it has worked as it should. What we now need to do is to keep giving because there are still more that can be supported,” he said.
Zimbabwe’s annual gold output increased to 24,8 tonnes in 2017 from 21,1 tonnes the previous year driven by a rise in deliveries from small scale miners. Chidavaenzi said the move by Government to roll-out gold service centres at all the country’s gold mining districts, would play a pivotal role in mopping up the yellow metal.
“One thing about gold is that there is need for presence. Gold miners require services closer to where they are working so the more we put gold centres closer to the people. It then speaks to less risk to the miners carrying a lot of gold and also being subjected to long distance can cause a little bit of challenge from a risk perspective. So I think these gold centres as a tool for gold mobilisation are very important because it then speaks of being closer to the market,” he said.
RBZ principal analyst Dishoni Limbikani, confirmed that there were plans to increase the GDIF facility as it has proven to be effective in increasing gold production in the country.
“At the moment the fund, which is managed by fidelity is at $150 million and l can tell you that it has not been exhausted though we have passed $100 million mark but we know that there is still demand,” he said.
Small-scale miners have contributed at least 60 percent of the gold deliveries since 2016. The apex bank is confident the gold centres will change the whole scene.
“We need to continue supporting the sector and the understanding that as a country, ‘Zimbabwe is open for business’. I mean there are better days ahead of us with all these initiatives. So we welcome and are happy that these centres are going to be rolled out,” said Limbikani.