The Small Scale Miners Association of Zambia (SSMAZ) which is mostly composed by local miners have called on ZCCM-IH and Zambia Gold Company to set competitive prices for gold to attract more small scale miners to sell to them.
Speaking in an exclusive interview with the Zambian Business Times – ZBT, SSMAZ Board Chairperson Simon Njovu said many small-scale miners were willing to sell gold to ZCCM-IH but the buying price is not attractive.
Njovu said the price being offered by ZCCM-IH is K500 per gram while private buyers are offering K1,200 per gram. He said as a result, a lot of small-scale miners are not attracted to ZCCM-IH and are opting to sell to private buyers because of lower and uncompetitive prices being offered.
“ZCCM-IH needs to set a good price for gold to attract more small scale miners to sell to them, it should offer 70 percent off the market price being indicated at the London Metal Exchange (LME) to small scale miners,” Njovu said.
He said ZCCM.IH has so far bought only 100 kilogrammes of gold from small-scale miners in the country. “When you look at LME operations, Zambia does not have any representation there but yet it stands to be one of the largest mineral exporter in Southern Africa,” Njovu added.
He said, “While base and precious metals mining are mature markets, we are witnessing the start of a new era for gold, lithium, copper and cobalt production as demand for these four materials undergoes higher growth from such developments as lithium-ion batteries.
“Above all, we need to see the ministry of Mines increase policy intervention and support to small scale and local mining industry to see growth and create more jobs,” Njovu said.
He disclosed that for the past 50 years, small-scale miners have been using shovels and other small tools. There is need to have financial products and policy support that are tailored to our local mining industry. The country will ultimately benefit once the mining industry is under the control of locals.
Njovu further challenged the Bank of Zambia (BoZ) not work in isolation but involve small-scale and local miners to come up with monetary policy interventions and regulation that would lead to the financial services industry being responsive to the needs of local miners.
Njovu said the central bank must create a committee to look at precious metals recovery program through the private sector in small-scale mining. “We also ask ministry of mines to open up more testing and control points for precious metals to maintain prices.
The banking industry must be re-designed to offer loans for acquisition of mining equipment. This lack of financing has been one of the major setbacks to developing local mining and locally owned mines in Zambia,” he added.
The Bank of Zambia has also started building gold reserves and failure by ZCCM IH (One of the two key companies selling gold to the central bank) to offer competitive prices risk the country failing to build credible size of reserves to help defend the Kwacha which has a history of perpetual depreciation.
