Zimbabwe Seeks Funds for Gold Mining

Zimbabwe's Chamber of Mines is engaging international investment banks to secure funding for the gold mining sector.

Its president, Victor Gapare, said that a detailed report on the sector had been compiled for potential investors.

"We recently financed a study on the gold mining industry in Zimbabwe by the London-based world-renowned consultancy GFMS World Gold Analyst," said Mr. Gapare.

"This report has highlighted the opportunities available in the industry in Zimbabwe and has been distributed to most investment banks in Europe and North America."

He added that the report had also been distributed to the Far East. Miners will have to negotiate their capital requirements with the banks involved, Mr. Gapare told Herald Business in an interview. The gold sector requires about US$1 billion over the next five years.

"We plan to do similar studies on platinum, chrome and nickel this year, followed by coal early next year," he said.

Inadequate working capital has hampered the industry's growth, which rose by 47% last year. This year it is expected to record a 44% growth.

The sector experienced challenges over the past 10 years, along with other key economic sectors—manufacturing, agriculture, tourism and financial services.

But confidence is returning to the sector, after the establishment of the inclusive Government in 2009. The liberalization of the gold sector in the same year was a further positive element.

Currently, the mining sector accounts for 6%–7% of GDP.

The report said gold output was projected to increase on the back of new mines opening and the recapitalization of old mines

While the outlook for the mining industry was positive, the report noted, industry remained beset by significant challenges, including erratic power supply and capital constraints.