International Journal of Economics, Commerce and Management

United Kingdom ISSN 2348 0386 Vol. IX, Issue 11, Nov 2021

http://ijecm.co.uk/

FINANCING THE ARTISANAL AND SMALL-SCALE GOLD

MINING SECTOR OF ZIMBABWE: A REVIEW OF OPTIONS

Matsiwira Last
Chinhoyi University of Technology, Department of Accounting and Finance, Zimbabwe
lmatsiwira@gmail.com

Mabvure Tendai Joseph

Chinhoyi University of Technology, Department of Accounting and Finance, Zimbabwe

Sifile Obert
Chinhoyi University of Technology, Department of Accounting and Finance, Zimbabwe

Abstract
The Artisanal and Small-Scale Gold Mining (ASSGM) Sector is registering a tremendous growth
both in Zimbabwe and Africa. In Zimbabwe, this sector is benefiting directly and indirectly over
three (3) million people, making this sector very important in employment creation since
Zimbabwe has formal employment shortcomings. ASSGM is contributing both at micro and
macro levels of the economy. At macro level, it is contributing more than 60% of gold to Fidelity
Printers and Refineries, 1.2% to the GDP of the country and 0.76% of government revenues
royalties. At micro level, it is helping in poverty eradication and providing income to the
unemployed. However, the ASSGM sector is facing financial challenges. This review paper
seeks to highlight other financing options that may be used by this sector since financing from
the Reserve Bank of Zimbabwe (RBZ), Government, banks and NGOs has shown little success
in this sector. There is need for training of small scale and artisanal miners in mining and
financial skills to enable them increase their production and manage their finances. The paper
noted that the following financing options have capacity to improve the ASSGM mining sector:
cooperatives, joint ventures and partnerships are sustainable in this sector.

Keywords: Artisanal and Small-Scale Gold Mining, Efficient Financing, Financing Options,
Sustainable Options, Zimbabwe

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INTRODUCTION
African Mining Vision (2017) revealed that Zimbabwe’s artisanal and small-scale mining
activities started around the 15th Century when the Mutapa Committee used to trade gold with
the Portuguese. These activities were not formalised and were mainly done to provide source of
income for the poor which helped them to eradicate hunger and poverty. With time, this sector
has evolved to become one of the pillars of the economy of Zimbabwe in employment creation,
forex generation, revenue generation and total gold output to the country (Pact and the Institute
for Sustainability Africa, 2015). Although the ASSGM sector has continued to survive for a long
period of time, it needs financing options for it to attain sustainable operations which will lead to
growth and expansion. This review paper analyses financing options which were availed to this
sector and comes up with options which may help this sector achieve optimum production. In
analysing different financing options that were availed to the ASSGM sector, the following
research questions were formulated:
1. What are the Financing Options that were availed to the ASSGM sector of Zimbabwe?
2. What are the Financing Options that are sustainable to ASSGM sector of Zimbabwe?
3. What can be done to improve efficient Financing of the ASSGM sector of Zimbabwe?

Background to the Study

Over the past 20 years, there has been an increase in the number of people who are
venturing in to the ASSGM sector in Zimbabwe and African Continent. A small-scale miner is a
miner who is registered and does not have more than 50 workers including contractors, and
operates on an area that do not exceed 40 hectares with an annual output of not more than
1200 tonnes (Zimbabwe Mines and Minerals Act Amendment Bill, 2015). Zimbabwe
Environmental Law Association ZELA (2020) discovered that both registered and unregistered
artisanal small-scale miners have over one (1) million people benefiting directly and over three
(3) million benefiting indirectly from ASSGM which makes this sector very important in
employment creation since Zimbabwe has formal employment shortcomings. This sector is fast
growing in Zimbabwe and the African continent. There are several factors which are fueling the
growth of this sector. Almaden (2015) and Banchirigah and Hilson (2010) revealed that the
growth of this sector over the past two decades is largely driven by poverty and a quest for
survival. In Zimbabwe the growth of this sector is mainly driven by decline in agriculture,
economic crisis and often poverty in rural areas (MMSD, 2002). In Africa, around 1990s, this
sector has almost ten (10) million people (International Labour Organisation, ILO, 1999) and
from 2000s, this sector has almost twenty (20) to thirty (30) million (International Institute for
Environment and Development IIED, 2013). The ASSGM sector is playing an important role to

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the economy of Zimbabwe both at macro and micro levels. At micro level, it is helping to reduce
unemployment levels in the country and provide source of income mostly in rural areas for
women and children. It is alleviating hunger and poverty in most rural areas. At macro level, it is
contributing more than 60% of gold to Fidelity Printers and Refineries (RBZ Mid-Term Monetary
Policy Statement, 2019). According to RBZ MPS (2018), both large scale and small-scale gold
mines are contributing 28% on exports. ASSGM is contributing 1.2% to the GDP of the country
and 0.76% of government revenues royalties (Pact and the Institute for sustainability Africa,
2015). However, the sector’s contributions to the economy and its growth are mainly affected by
lack of financing options. Several financing options were tried in this sector with little success.

LITERATURE REVIEW
Although artisanal and small-scale gold mining industry is playing an important role on
the growth of Zimbabwe’s economy, the industry is still facing several financial problems. Figure
1 shows equipment and tool ownership at mine sites in Zimbabwe:

Figure 1 Tool Ownership in ASSGM Sector of Zimbabwe

Source: Pact and the Institute for Sustainability Africa (2015)

It can be clearly seen that there is lack of financing options in the ASSGM sector to
acquire mining equipment. Mine owners are not able to provide all the needed equipment.

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United Nations Industrial Development Organization, UNIDO (2018) noted that there were a
large number of sponsors in the sector and gold buyers are normally the ones providing
equipment and other support to ASSGM with less financing from government, donors and
financial institutions. Equipment provided includes compressors, explosives, and more
rudimentary tools like pickaxes, spades, hammers and chisels (UNIDO, 2018). Adebisi and
Olayinka (2013) argue that small businesses faced funding constraints, in developing
economies, which hampered their development and long-term existence. Several artisanal and
small-scale gold mines use simple mining tools such as: picks; hoes; chisels and shovels mainly
because they do not have enough funding to purchase mining machinery that improve their
mining methods and increase output (Munyoro et al., 2017). Henschel et al. (2005) revealed
that small scale mining poses great risks emanating from inappropriate working tools and this
poses great health risk with some causes ranging from inappropriate working equipment and
lack of protective clothing.
Mining Newsweek Magazine (2020) opined that both small-scale and large-scale mining
sectors need funding of over US$7 billion to renovate their machinery for efficient production
every five years. They observed that the major setback is that financial intermediaries are not
providing long term funding to this sector making it hard for the mining industry to access
funding for recapitalisation or to increase output or for growth and expansion or undertake new
projects. The Zimbabwe Chamber of Mines CoMZ (2020) discovered that most big and small
mines need to replace old fashioned machinery which are no longer productive and become
costly to repair. The Mashonaland West Province Report (2020) noted that the province has an
estimated figure of more than 13, 000 small scale miners including those who mine gold.
ZIMASCO has allocated their land to small scale chrome miners through the Tribute System
Agreement where small miners will mine the mineral and sell it to ZIMASCO. Only 203 small
scale miners were allocated the land and others failed because they did not have enough
capital and equipment to mine (Ministry of Mines Internal Report Mashonaland West Province,
2020). Zimbabwe Mining Newsletter (2020) revealed that the Ministry of Mines and Mining
Technology in 2017 forfeited more than 1000 mining claims for ASSGM in Matabeleland North
province, Zimbabwe because they have failed to pay US$ 100 for inspection fee during six
months of starting operations.

Review of Financing Requirements for the Artisanal and Small-Scale Gold Mining Sector
to Start Operating
There are a lot of financial requirements which the ASSGM sector has to meet before
they are allowed to start operating. UNIDO (2018) revealed that these financial requirements

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include: the services of an approved prospector of US$400, Environmental Impact Assessment

prospectus valued US$138, the value of carrying out Environmental Impact Assessment is
US$3,000 and it may exceed US$4000. Furthermore, the cost of a license to buy and keep
explosives is pegged at US$1,000. Legal authorization to operate a custom mill requires
US$12,300. Millers are to pay a cost of annual licensing (US$8,000), Environmental
Management Agency (EMA) needs to be paid their own fee (US$1,000 every 3 months), and
ZESA costs US$3,000 for work to be done, transformer costs US$11,000, and the cost of ZESA
wire per kilometre is US$4,800 (UNIDO, 2018).
For buyers to be registered and to start operating, they need to have US$3,500 or more
and they have to deposit 500g or more of gold every month. Cooperatives need to have at least
US$10,000 to be registered. According to UNIDO (2018), ASSGM are charged three (3) percent
mining royalties on gold and millers are charged the cost of annual licencing (US$8,000). Most
artisanal and small-scale miners, 70% to 80 % they do not afford to raise all the required capital
so they remain operating informally (The International Institute for Sustainable Development,
2017). The study points to the need to have funding to the ASSGM sector to raise the required
capital.

METHODOLOGY
The study used a documentary review approach to gather information. The information
in this study was gathered from secondary sources starting from 1990s to 2021. The study used
documentary evidence from 1990 up to 2021 because that’s when the ASSGM sector started
accessing funding aids from different investors (Government, RBZ, Ministry of Mines Loan
Fund, Banks and NGOs) and that’s when the ASSGM sector started to be recognised in
Zimbabwe. The information was extracted from the reports published by major stakeholders in
the gold mining industry of Zimbabwe. These stakeholders include: Zimbabwe Chamber of
Mines (CoMZ), Pact and the Institute for Sustainability Africa, MMMD, Zimbabwe Mines
Federation, Zimbabwe Ministry of Mines, Zimbabwe government publications, RBZ and Fidelity
Printers and Refineries, academic publications in the ASSGM sector of Zimbabwe and reports
in the ASSGM sector of Zimbabwe.

FINDINGS OF THE STUDY

Financing Options that are availed to the ASSGM sector of Zimbabwe
Ministry of Mines Loan (Mining Industry Loan Fund)
ASSGM sector is not yet recognised under the Mines and Minerals Act and Gold Trade
Act which is responsible for the production and sale of gold (African Mining Vision, 2017). Even

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though this sector is still to be recognised, the Ministry of mines has created a loan fund
specifically for this sector. MMSD (2001), revealed that around 1990 up to 2006, the loan was
availed to small-scale miners and was governed by Mining Affairs Board. The loan has a value
of ZW$2 million per annum. This funding was not enough for the whole sector, the amount was
just adequate to capitalise four mines at ZW$500,000 each. Furthermore, the Mining Industrial
Loan Fund (MILF) loan facility from the Ministry of Mines was affected by hyperinflation in 2006
(Pact, 2015), apart from being inadequate for the whole ASSGM sector.

Financial Institutions (Banks)

ASSGM sector has received less funding from banks in Zimbabwe. Lack of collateral has
been a major challenge causing ASSGM sector to have less funding from financial institutions
(Munyoro et al., 2017). In Zimbabwe the following banks have funded ASSGM sector with little
success: ZimBank (now ZB Bank), Barclays (now First Capital Bank) and the Commercial Bank of
Zimbabwe (now CBZ Bank). These banks have funded ASSGM with capital that was below
ZWL$300,000 per miner (Dreschler, 2001). Financing from banks in Zimbabwe did not benefit the
whole ASSGM sector because most small-scale miners have no or less collateral (Dreschler,
2001). Similarly in Ghana, the following banks provided funding to ASSGM: National Investment
Bank, Stanbic and SG-SSB, they provided commercial loans which were highly collateralised with
above average rates and stiff settlement plan with a considerable amount of capital around US$1
million to be given the loan, most ASSGM did not afford to this funding facility and only few has
accessed it (Hilson et al., 2014) due to high collateralisation. However, Hilson and Ackah-Baidoo
(2011) found out that Grameen bank has successfully provided small scale loans for ASSGM who
were operating in Ghana, Yale Mining Camp and recommended social collateralisation, that is
providing funding to people who are operating together in groups than one operating alone, a
group is likely to pay back the loan than a sole miner. The Grameen Model was also applied in
Tanzania and there was relative success (Hilson & Ackah- Baidoo, 2011).

Donor
In Zimbabwe the major donor working with ASSGM is Intermediate Technology
Development Group (ITDG) (Dreschler, 2002). It has assisted ASSGM sector with capital and
technical support. The major achievement of ITDG was the setting up of the Shamva Mining
Centre. The Mining Centre provide several services to the ASSGM in the Shamva area. This
project was widely considered as a positive step in improving mining productivity, exchanging
mining technology and encourage ASSGM to formalise, since it only permitted formal miners
access to milling services (Spiegel, 2015). The following were offering support to ASSGM in

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Shamva: EU Micro Projects, they availed capital for different mining schemes for small scale
miners including the setting up of Shamva Mining Centre, COMIC RELIEF, they availed money
for capacity building to National Miners Association of Zimbabwe (NMAZ). TDH, they helped in
the setting up of Shamva Mining School. The school helped in the training of women miners up
to the level of certificate of competency. Other donors who have helped ASSGM in Zimbabwe
include: Gesellschaft für Technische Zusammenarbeit (GTZ), it was providing capital to miners
who were doing alluvial Riverbed Gold Mining in Insiza. It also provided funding to small scale
miners at national level and Stichting Nederlandse Vrijwilligers (SNV) the NGO from Netherlands,
it has helped ASSGM with different mining skills in the Insiza and m ingwane rural districts
( reschler, 2001), AFSM (Austria), this NGO was funding small scale chrome cooperative miners
who were mining chrome on the Great Dyke and they extended their loan funding to small scale
gold miners (MMSD, 2001). They are few NGOs that are working with ASSGM sector in
Zimbabwe mainly because others are not willing to be associated with bad publicity connected
with small scale mining especially with regards to environmental degradation (MMSD, 2001). The
ITDG project was initially a success (Spiegel, 2015), but it did not find long term success due to
early change of leadership from foreign leaders to local leadership (Mugove, 2001). In 2005
UNIDO worked with Ministry of Mines in Kadoma to train ASSGM, and this program was initially a
success which resulted in the creation of microfinance which was offering credit facility to ASSGM
sector in the area. Although it was a success, there is no information on the number of small-scale
miners or individuals who benefitted from the funding moreover, it’s very difficult to recognise
those who benefitted from the funding facility, particularly between female miners (UNIDO, 2018).
This funding also did not find long term success as it was affected by hyperinflation which crippled
the whole country during that period (Pact and the Institute for Sustainability Africa, 2015).

Reserve Bank of Zimbabwe (RBZ)

RBZ is the only buyer and exporter of gold in Zimbabwe, thruogh Fidelity Printers and
Refineries. RBZ monitored a loan facility of US$100 million. It was a commercial loan facility to
finance the purchase of equipment for small-scale miners (International Monetary Fund, 2015).
In 2015, ASSGM sector has about 40 000 registered miners, Zimbabwe Mines Federation
(2020) and of the registered 40 000 miners, only 307 miners benefited. In an attempt to increase
gold output from ASSGM in 2017, RBZ extended a loan facility of US$ 74 million. This loan
facility was disbursed to 255 small scale miners (RBZ MPS, 2018). This was noted as a
remarkable achievement by RBZ since gold from small scale sector exceeded that of primary
producers amounting to 53% of the total gold output 24,843.87kgs. Even though there was an
increase in gold output, only 2.5% of the formal ASSGM accessed this funding. Apart from

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giving capital which does not cover the whole ASSGM sector, Fidelity Printers and Refineries is
paying using the following procedure: for a Sample Grade of 90% and above it’s paying
S$55.45/g, 85% but below 90% it’s paying S$54.58/g, 80% but below 85% it’s paying
S$53.99/g, 75% but below 80% it’s paying S$53, 41/g and a Sample below 10% but above
5% its paying US$52.25/g (Fidelity Printers and Refiners, 2021). For Fire Assay, gold above
100g it's paying US$55.74/g cash. For Fire Assay transfer price, a sample of not more than 10g
is deducted (Fidelity Printers and Refiners, 2021). For the gold below 100g, it is not paying in
S$ but it’s using the Exchange Rate of that period. Artisanal and Small-Scale Gold Miners pay
2% royalties and Primary Producers (Large Scale) pays 5% royalties (Fidelity Printers and
Refiners, 2021). This is fueling parallel market in the ASSGM sector. Other gold is now being
smuggled outside the country where there are higher prices. The Finance and Economic
Development Minister, Hon Mthuli Ncube revealed that closer to 34 tonnes of the yellow metal
were smuggled to Rand Refinery in South Africa whereas President Emmerson Mnangagwa
also disclosed in 2019 that he discovered that US$60 million worth of gold was sold through
informal channels to a Dubai-based company (Mining Newsweek Magazine, 2020)

The Government of Zimbabwe

In 2020, the President of Zimbabwe unveiled a ZWL$18 billion relief funding to help
individuals, businesses small and large scale and industries to easy the effects of Coronavirus
pandemic. The Economic Recovery and Stimulus Package’s objective was to rejuvenate the
economy and revive the health sector crisis that was caused by Covid 19 (ZELA, 2020). The
mining industry was allocated ZWL$1 billion, a loan facility to the gold industry targeting both large-
and small-scale miners. This money was managed by Zimbabwe Mines Federation. Part of the
money was set to be available in foreign currency. However, miners in different parts of the country
were yet to benefit from the recovery and stimulus package (ZELA, 2020). The government of
Zimbabwe raised a US$40 million gold mobilisation fund to assist ASSGM (UNIDO, 2018).
According to RBZ Mid-Term Monetary Policy Statement (2017), the ASSGM industry is receiving
US$ 40 million Gold Support Facility that is being funded by Fidelity Printers and Refiners. Around
mid-2017, US$30.2 million was distributed to the small-scale miners. UNIDO (2018) revealed that
there is no exact number of ASSGM who have benefitted from this facility. According to Zimbabwe
National Budget (2015), the government has raised US$100 million loan facility to assist ASSGM
operations. The Government of Zimbabwe entered into an agreement with the Chinese company
called Xuzhou Construction Machinery Group. They agreed that the company will offer ASSGM
mining machinery on credit bases. It also proposed to offer tax benefits to financial intermediaries
that are acknowledging Geologically-Surveyed Reports as collateral for ASSGM borrowing

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requirements. However, this loan facility is yet to yield fruits, Mr. Moyo, Mines Deputy Minister
noted that the government has failed to meet its 30% bargain of the deal requirements and it has
reduced the funding (Nsingo, 2021). The deputy minister further revealed that though the deal is
still there, no small-scale gold miners are yet to benefit due to security issues and the funding will
now be administered in small trenches to ASSGM (Nsingo, 2021).

Cooperatives
Dzimunya et al. (2018) noted that cooperatives are easy to control, they allow
organisation between ASSGM and helps to bring favourable working atmosphere for capacity
building. It would be easy for different investors in the ASSGM sector to provide funding,
education and training to cooperatives members than to an individual miner. In Tanzania there
are successful cooperatives: the Mwanza Regional Miners Association and the Tanzanian
Women Miners’ Association (TAWOMA). The TAWOMA is actively involved in identifying
market links, creating favourable environment for relationships between small and large-scale
miners, advocating for and training small scale miners as well as giving input to legal reforms
(United Nations Environment Programme, UNEP, 2012). In Zimbabwe, the Austrian Foundation
for Small Mines (AFSM) have funded small scale chrome miners who were working in
cooperatives on the Great Dyke and selling the ore to ZIMASCO. The funding was also
extended to small scale gold miners (ZEPARU, 2018).

Partnerships
Small-Scale Miners may partner Primary Producers (Large Scale) which will help in
financing them (Zvarivadza, 2018). In Zimbabwe there is ZIMASCO (Zimbabwe Mining and
Smelting Company) Tribute System for chrome mining. The mine partnered with local small
scale chrome miners. They assisted them in identifying high-grade ore bodies, provision of
mining machinery, transport system to ferry ore to the processing plant and the milling plant.
The small-scale miners pay the tribute holder based on tonnage of ore and waste. This has
helped small scale chrome mines and this method also helped the company to achieve its
corporate social responsibility (Pact and the Institute for Sustainability Africa, 2015).

Joint Ventures
Joint ventures are mainly done for a single project. Joint ventures lead to the pooling of
resources such that the miners become capable of buying the necessary equipment for their work
(Zvarivad a & Neingo, 2015). In Bolivia Coeur d’Alene Mine Corporation that have resources
entered into a joint venture with 15 000 formal artisanal cooperatives (The International Institute

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for Sustainable Development, 2018). Mandizha (2015) noted that funding from government and
NGOs will be easily accessed since these organisations will be communicating with
representatives alone rather than giving funding to an individual. For example, the Centre for
Natural Resources Governance (CNRG) is working with artisanal miners in Penhalonga,
Zimbabwe, by registering claims for them and providing working tools because they are
associations (Mandizha, 2015). This establishes an easy communication rapport as the NGOs,
governments, and international donors consult representatives of the associations who use the
funds in the correct manner. Combined effort of the members of each association leads to the
responsibility and protection of the mining area given to that particular association.

Leasing and hire purchase (asset financing)

Most small-scale gold miners use this method when it comes to acquiring the service of a
machine in Zimbabwe. This mainly helps ASSGMs to have equipment that they may not be able
to buy due to financial challenges. Dzimunya et al. (2018) noted that for improvement of ASSGM
environmental, access for hire-purchase funding to acquire mining machinery such as:
jackhammers; compressors; generators; stamp mills and ball mills and concentrating tables within
ASSGM should be aided by the government. ZEPARU (2018) revealed that the Tanzanian
government offers equipment on hire purchase which enhance the operations of ASSGM sector.
ZEPARU (2018) also noted that to enhance funding to ASSGM, there is need for favorable prices
for their gold, monitor illegal gold trading, trading of gold using official channels and provision of
correct market information and access to equipment leasing arrangements.

Venture Capital
Financing to ASSGM sector from Venture Capital may be good to this sector since most
of them do not have access to equities markets. This funding is mainly used to help small to
medium firms for growth and expansion who are failing to acquire funding from formal financial
institutions. In Kenya, the use of venture capital for Small to Medium Enterprises proved to be
profitable even in an unfavorable market environment. Memba et al. (2011) noted that the SMEs
that used venture capital experienced an improved growth and their findings encouraged more
SMEs to use Venture Capital financing in Kenya. Venture capitalists brings both funds and
expertise in to the ASSGM sector. This funding is mainly provided by wealthy individuals.

Revolving funds
Another option that may be employed by artisanal and small-scale gold miners is
accessing funding from revolving fund schemes. The Government of Zimbabwe and Non –

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Governmental Organizations (NGOs) first engaged in revolving fund around 1990s, the scheme
was implemented to finance low-cost mining equipment (pumps, generators and crushers), with
payback periods of between one to three years (Planet Gold Report, 2020).

Improving Efficient financing of the ASSGM sector in Zimbabwe

Formalisation of the ASSGM sector
Lack of formalisation of the ASSGM is prohibiting most financial institutions to fund this
sector. This ASSGM sector in Zimbabwe has only 50 000 registered miners, Zimbabwe Mines
Federation (2020), but it has over 500 000 miners, African Mining Vision (2017). There were
several efforts that were done by the government of Zimbabwe to encourage formalisation
including: decentralisation policy approach (Statutory Instrument 275 of 1991), EIA and
Ecosystems Protection (Statutory Instrument 7 of 2007), Mining Industry Pension Fund
(Statutory Instrument 14 of 2016), The Gold Trade Act (Chapter 21:03) this Act singles out RBZ
and Fidelity Printers and Refineries as the only buyer and exporter of gold in Zimbabwe, Mining
(General) (Amendment) Regulations, 2021 (No. 25) ( Statutory Instrument 46 of 2021),
recentralisation and reconfiguration of power, Operation Chikorokoza Chapera and Operation
Mariyawanda (UNIDO, 2018) but they did not yield results since less than 10% of ASSGM are
formal. Lack of formality is causing ASSGM sector to remain a high-risk zone. Planet Gold
(2020) argued that legal status of ASSGM operations is a fundamental barrier to access finance
since some are in the informal (and sometimes illegal) sector. Most formal lenders are unable to
enter into finance agreements with operations that lack legal status (Planet Gold, 2020).

Familiarisation of ASSGM sector with Financial Institutions

A study by Almaden (2015) and another by Banchirigah and Hilson (2010) revealed that
ASSGM is poverty driven activity. In Zimbabwe ASSGM has started mainly in poverty affected
rural areas and urban areas. It has started as an informal sector. This sector mainly comprises
of children, man and woman with less financial knowledge. Some of the ASSGM might be
aware of banks but are not aware of the necessary paperwork needed for them to be given
funding. World Bank Global Findex Study (2017) revealed that even when artisanal and small-
scale miners have access to financial institutions, they are not familiar with how to obtain
funding from them. There is need for financial institution and third-party intermediaries like social
enterprises to train, educate, deliver loans and monitor the repayments. ASSGM enterprises
may only be aware of local financial institutions but have limited financial knowledge and have
less need for large funding since their investments are still small and they are not able to
manage large loans. Traditionally ASSGM sector is mainly dominated by youths and less

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educated people, so giving them finance is very risk since they are perceived as people who do
not know how to invest. Planet Gold (2020) also said many ASSGM operators are unfamiliar
with the formal finance structures and do not have the formal business and management
training that would enable them to make their business case to financial entities. They also lack
data, such as geological information to estimate the size of the gold reserve, which can help
finance providers evaluate the future profitability of the business

Training of all ASSGM in Mining Skills

There is need for training of ASSGM on the mining skills. Training in mining skills will
help them to grow and expand and give them the ability to pay back the loan from lenders. Their
ability to manage finance will enhance their chances of acquiring more funding from financial
institutions. Mlambo (2016) noted that there is need of training on simple financial accounting
and mining skills for artisanal and small-scale miners. Figure 2 shows miners’ training skills and
experience in gold:

Figure 2 Miners Training Skills and Experience in Gold

Source: Part and the Institute for Sustainability Africa (2015)

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Part and the Institute for Sustainability Africa (2015) noted that 70% of ASSGM lacks
experience in mining skills. It can be noted from Fig 2 that most ASSGM lack experience
especially from tertiary institutions and they mainly have on the job skills and experience

Training of ASSGM in Financial Skills

Zimbabwe Miners Federation (ZMF) (2020) revealed that most Artisanal and Small-
Scale Miners operate without any financial track of their mine performance. In most cases,
miners dig into their mining revenue fulfilling their personal expenses. ZMF (2020) further
argued that non-existence or poor financial management is one of the internal business
challenges that are faced by artisanal and small-scale miners in which they lack proper
management of handling business finance to fulfil financial goals of the mine. ZMF (2020)
recommended artisanal and small-scale mine owners to have financial documents which will
help them in making decisions that are in favour of the development and growth of their mines.
Zvarivadza (2018) noted that registered ASSGM should be given necessary training and
educative material for miners to acquire knowledge and to undertake their activities safely.
Training programs which suit the requirements for ASSGM need to be developed, workshops
should be arranged where ASSGMs gather together and share work experiences (Zvarivadza,
2018). The International Institute for Sustainable Development (2018) noted that technical
expertise like advising, training and educating ASSGM ensures their compliance with the
country’s mining policy and legislation.

CONCLUSIONS
The ASSGM sector remain one of the sectors which is contributing immensely to the
economy of Zimbabwe. Even though the ASSGM sector is important to the economy of
Zimbabwe, it has few financing options. The research revealed several financing options which
are availed to the ASSGM sector of Zimbabwe and most of them has shown little success. Apart
from showing little success, the financing option availed to the ASSGM sector are not covering
the whole sector. Lack of formalisation of the ASSGM sector is causing this sector to remain
very risk and most financial institutions are not offering funding to this sector. Other NGOs like
the American Jewish World Volunteer Service, the Austrian HORIZON3000 and the British VSO
only showed willingness but never helped this sector due to lack of proper mining development
programme and some are not providing funding due to bad activities that are associated with
this sector (MMSD, 2001). The study recommends for training in the mining and financial skills
for ASSGM so that the sector will expand and grow and have the ability to manage their funds.
The study further proposes for the use of other financing options like cooperatives, joint

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ventures and partnerships which has shown some prospects of success in some countries they
were tried including Zimbabwe; hence they were noted as sustainable options. The government
of Zimbabwe should come up with some incentives to financial institutions who offer loans to
ASSGM sector. Fidelity Printers and Refineries should buy all the gold using cash the (United
States Dollar) using international market prices to eliminate parallel market and smuggling of
gold out of the country. In the future, the Ministry of Mines of Zimbabwe should come up with
policies that recognises the ASSGM sector, there is need for Ministry of Mines and Home Affairs
to work hand in hand on enforcement of formalisation and reduction in crime rate in the artisanal
and small-scale mining sector. There is need for policy consistence on formalisation issues and
decision makers and law enforcement agencies in the ministry of mines and home affairs should
be solid in implementing the policies in the ASSGM sector to reduce smuggling and crime rate
to increase funding from financial institution and attracting potential investors.

AREAS FOR FURTHER RESEARCH

There is a need for general research on the effects of corruption, (gold smuggling) and
crime rate in Zimbabwe’s ASSGM sector. The research needs to focus on actors who are
involved, the effects it poses to the economy and potential investors and the mechanisms that
may be employed to prevent gold smuggling and reduce crime rate. Despite several efforts and
mechanisms that were introduced by the government of Zimbabwe, the ASSGM has remained
largely informal, less than 10% of artisanal and small-scale miners are formal. There is rise in
smuggling and criminal cases due to lack of formalisation. Some of the criminal cases are
mainly caused by Machete Wielding Gangs (Mashurugwi). The government of Zimbabwe is
losing a lot of money due to smuggling.

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