eBusiness Weekly
Golden Sibanda
Zimbabwe is headed for an investment flood in mining with unnamed foreign investor having reportedly expressed interest to sink in a staggering $50 million into the gold mining industry, as investor interest in the mineral rich southern African country continues to boil over.
It was not immediately clear whether the investor was interested in Greenfield or Brownfield projects, but officials reckon this comes on the back of ever-growing foreign investor interest in Zimbabwe’s mining sector.
Zimbabwe has the second largest gold reserves per square kilometre in the world with 13 million tonnes of proven reserves of which only 580 tonnes have been exploited since 1980, Reserve Bank of Zimbabwe Governor Dr John Mangudya disclosed recently.
The southern African nation is also home to more than 40 top minerals in the world including gold, platinum, diamonds, nickel, coal, chrome lithium and coal-bed methane gas. Fewer than 10 percent, Government says, of the minerals are commercially exploited.
Mines and Mining Development Minister Winston Chitando, said recently he was due to meet the investor this week to discuss ways in which the foreign investor could be assisted. However, he declined to reveal the investor’s identity or finer details.
Minister Chitando said while capital had been an issue constraining the mining sector in Zimbabwe, the pro-business new dispensation had created confidence among foreign investors and there was huge interest for investment into the country.
This comes days after the mines minister earlier last week addressed an oversubscribed meeting with 27 major foreign investor companies and fund managers with billion dollar portfolios in London last week to explain opportunities in Zimbabwe.
While the venue for the meeting with the London Stock Exchange investors could only take 27, a total of 42 investors registered for the meeting. Minister Chitando said a similar session in Toronto (Canada), regarded world’s capital city of mining capital, was over-subscribed.
The $50 million deal
Given the foreign investor frenzy in Zimbabwe since the new dispensation came to power in November last year and subsequent peaceful harmonised July 30 elections, Minister Chitando said the issue of capital needed to develop mining assets in Zimbabwe had largely been addressed.
“Capital is an issue which to a large extent has been addressed. I can tell you . . . there now is capital inflow. I sent a note to Isaac Kwesu (CEO Chamber of Mines) that there is actually an investor coming on Monday who has $50 million, which he wants to invest in gold; so you see this is the time to point out opportunities” he said.
“We now have this capital coming,” Minister Chitando said.
This comes as Government is working on several interventions to boost gold mining, including setting up gold service centres, capacitating small-scale miners and putting in place a gold support facility.
Gold output has been growing exponentially on the back of targeted support initiatives by Government, particularly to small miners with deliveries to sole authorised buyer Fidelity Printers and Refiners reaching 28,7 tonnes in the nine months to September.
Minister Chitando said Government was confident gold deliveries would hit 34 tonnes this year, 13 percent ahead of the initial target of 30 tonnes. Through various support measures Government is aiming to increase bullion production to 100 tonnes annually by 2023.
The yellow metal is Zimbabwe’s second biggest export earner after tobacco and together with platinum, gold accounts for over 50 percent of the country’s annual foreign exchange inflows.
