Mthuli Ncube draws down IMF SDRs to set up US$10 million gold facility

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By Alois Vinga

FINANCE Minister, Mthuli Ncube has drawn down an International Monetary Fund (IMF) grant extended to Zimbabwe last year to set up a US$10 million gold facility in a bid to spur growth in the most lucrative economic sector.

Last year Zimbabwe received around US$1 billion from the IMF under Special Drawing Rights (SDRs), an international reserve asset to supplement official reserves and boost liquidity to member countries in the wake of the devastating impact of the Covid19 pandemic.

The unveiled facility is in line with commitments made by the Treasury in the 2023 National Budget blueprint.

It is from these resources (IMF SDRs) that the Treasury is targeting strategic sectors such as mining expansion and value addition. The mining sector has potential to generate foreign currency earnings and create jobs that will have a multiplier effect in growing the economy.

“The US$10 million Gold facility is broken down as follows: USD$5 million Artisanal Gold Small Scale Miners Fund (AGSMF); and USD$5 million Gold Service Centre Revolving Facility (GSCF),” said Ncube.

He said the gesture is aimed at supporting value addition programmes for the small-scale miners and the gold mining sector at large.

Ncube said GSCF is a one stop shop that offers technical services to miners, access to milling centres, access to capital and a ready market for produced gold by small scale miners to Fidelity Gold.

“It is a holistic approach to service provision, in terms of provision of technical support, transport, milling services, on-site technical guidance to the miners, laboratory services, equipping the miners, purchasing gold realised by the miners and assisting miners repair their broken-down equipment as well as supply of consumables,” he said.

The treasury boss acknowledged that Artisanal Miners produced more than 18 tonnes of gold accounting for 64% of the total gold produced justifying the needs for adequate capacitation to ensure that the country achieves the US$12 billion mining industry by end of 2023.

“To this end, the setting up of a USD$5 million Gold Service Centre Revolving Facility (GSCF) and USD$5 million Artisanal Gold Small Scale Miners Fund (AGSMF), will go a long way in capacitating the small-scale miners through the construction of Gold Service Centres as well as providing them with the requisite tools of trade for their day-to-day operations,” Ncube said.

The implementing agency for the USD$5 million Gold Service Centre Revolving Facility (GSCF) will be the Zimbabwe Mining Development Corporation (ZMDC).

In this regard, ZMDC will be responsible for the construction of the Gold Service Centres. The disbursement for the GSCF will be done through the BancABC Bank.

On the other hand, the USD$5 million Artisanal Gold Small Scale Miners Facility (AGSMF) will be accessed through the Mining Loan Fund (MLF) which is administered by the Ministry of Mines and Mining Development.

Eligible Artisanal Small-Scale Miners will be required to submit their applications with the requisite information to the Mining Loan Fund.