Miners scramble for Gold Development Fund
The Gold Development Fund (GDF) that was introduced by the Reserve Bank of Zimbabwe to capacitate small-scale gold miners, has been oversubscribed resulting in $80 million being disbursed to miners last year alone.
The GDF is availed by the Reserve Bank of Zimbabwe (RBZ). Initially, $40 million had been set aside for the GDF, but due to overwhelming demand for financing by gold miners, the cap was removed and $80 million has been snapped up so far.
Interestingly, $54,3 million had been taken up by September 30, 2017.
Fidelity Printers and Refiners (FPR) head of gold operations Mehluli Dube, told The Herald Business last week that both small and large-scale miners benefited from the GDF.
“By end of December (last year) $60 million had been disbursed to small-scale miners and $20 million to large-scale miners, totaling $80 million,” said Mr Dube.
A combination of favourable international gold prices and the impact of the GDF saw Zimbabwe hauling 24,8 tonnes of gold last year.
The output was 1,8 tonnes more than the 23 tonnes delivered in 2016. FPR – the gold buying arm of the RBZ – used $980 million in the purchase of the 24,8 tonnes of gold.
It is expected that in the next two years, the GDF will become self-sustaining as the first beneficiaries start making repayments.
The RBZ is understood to have committed to supporting the GDF going forward, to enable miners to ramp up production.
Mr Dube could not reveal how much has been set under the GDF for this year, but acknowledged that miners will still access funds.
“The Gold Development Fund is still available to support miners this year. However, we are yet to unveil the exact amount that we will be disbursing,” said Mr Dube.
A number of mines that were on the verge of closure were resuscitated by the loans availed under the GDF.
At the same time, gold deliveries for this year were boosted by a combination of miners’ loyalty emanating from the support under the GDF, and the increased visibility of FPR on the market as evidenced by the public relations efforts, which have seen their teams visiting major gold producing areas.
Further, the continued payment for gold in cash for most parts of last year – a combination of 60 percent in US dollars and 40 percent in bond notes) and spot payments, have assisted in enticing miners to deliver to FPR.
But there were challenges with payments towards end of year due to cash shortages obtaining in the country.
Sources say FPR is now paying 70 percent in cash – US dollars and the balance is transferred into accounts.
FRP officials also launched gold mobilisation outreach meetings where artisanal miners were told of the importance of delivering gold through the formal channels.
Only those miners who deliver gold to FPR can access funds under the GDF.In 2014, the gold sector generated US$687 million in terms of export earnings, which rose to US$737 million in 2015 and US$914 million in 2016.