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CBZ partners ZMF to support artisanal gold miners

By Business Reporter – Wednesday 14 October 2020

LOCAL – HARARE (Mining Index) – ZIMBABWE’s leading financial institution, CBZ Bank Limited says its recent mining agreement with the Zimbabwe Miners Federation (ZMF) is expected to plug gold leakages.

Zimbabwe has the highest density of Artisanal and Small-scale Miners (ASM), who produce less than 5g of gold each at any given time. It is estimated that Zimbabwe produces 100 tonnes of the bullion annually, but most of it is lost through smuggling. From January to September this year, a total of 14,650.21 tonnes was produced, barely half of the anticipated annual target of 35 tonnes. 27.66 tonnes were delivered to Fidelity FY2019, a decline from 33.2 tonnes recorded FY2018.

In September, ZMF was granted a gold buying permit to buy gold on behalf of Fidelity Printers and Refiners (FPR). In order to mop up all the gold from the ASM sector and pay miners timely, ZMF can now ‘buy as little as a point of gold’ and pay cash in USD.

As a policy, Fidelity only buys a minimum of 5g of gold.

In an interview with Mining Index, CBZ Bank executive director Lawrence Nyazema said the general scheme and arrangement with ZMF is to amalgamate all small quantities of the bullion being produced by Artisanal and Small-scale Miners (ASM) to find its way into the formal system.

“Generally, the intention is to capture gold that could be circulating outside the formal market. Fidelity buys 5g and above. When you look at the small scale miners, there are some who produce smaller quantities of less than the 5g less than what Fidelity buys. It makes sense that Fidelity has a cut-off point,”

“The reality is that while we have small scale miners, not all gold is going to Fidelity. The minimum level of 5g was creating a gap in the market. We want miners to be able to sell at the nearest point to get paid instantly,” said Nyazema.

In May this year, FPR ran out of USD to pay miners due to limited flights that bring in foreign currency owing to the effects of Covid-19 pandemic.

Nyazema said the reason CBZ is an important partner in Zimbabwe’s mining sector is because of its widespread branch network, within proximity of ASM.

“We have over 50 branches nationwide in areas where small scale miners are concentrated,”

“We want to make it easier for gold miners to mine, and also make it easier for them to sell. It will bring more output. Success is when we achieve more than what we have achieved before,” he added.

The CBZ/ZMF partnership remains an open agreement with no capped timeframe, and is expected to pave way for more mining opportunities that may come.

ZMF personnel at all ZMF gold buying centres will hand over any bullion transacted equivalent to cash disbursed to CBZ-ZMF vaults for transit to Harare, with all transactions balanced on daily basis.

“Our role is an intermediary when money and other mining facilities are concerned. We have infrastructure that enables us to carry that general role of intermediary,” said Nyazema.

Miners in Zimbabwe have previously hinted the need for government to create a mining bank in order to address financial and operational inefficiencies in the mining sector.

Nyazema however said CBZ is ready to address some of the challenges being faced in the extractives sector.

Part of the agreement also focuses on ASM to acquire vehicles for production and equipment.

“We are not waiting for a specialist bank to be established. CBZ Bank is able to provide some of the services miners have been requesting for. The reason why they have been asking for the mining bank is because they have seen a gap in the market, the need to capacitate their mining operations and acquire mining equipment and trucks.”

He applauded ZMF for playing a critical role in structuring the ASM sector, which largely remains informal especially among the artisanal miners, viewed by most financial institutions as a risk when seeking credit.

Last week, ZMF signed three mining agreements with CBZ Bank, CMED and AliJapan786 Zimbabwe Limited to grow and develop the artisanal and small-scale miners in Zimbabwe.

ENDS// www.miningindex.co.zw

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