The Reserve Bank of Zimbabwe, Harare. Picture: JAMES OATWAY
The Reserve Bank of Zimbabwe, Harare. Picture: JAMES OATWAY

Harare — Zimbabwe and Sakunda Energy signed a $63m agreement to explore for gas, the country’s Mines Minister Walter Chidakwa said.

Zimbabwe Mining Development Corporation (ZMDC), a state-owned company, will own 40% of the venture to explore in Lupane, 364km west of the capital, Harare, Chidakwa said in an interview on Friday. Sakunda will provide the equipment.

Previous efforts to extract gas there have failed because the government and its companies haven’t been able to raise funds for the project, first mooted in 2010. "We know that there’s a significant quantity of gas underground, with a purity of 95% to 96%," Chidakwa said. Sakunda has signed a non-disclosure agreement with ZMDC, he said.

Meanwhile, Zimbabwe may confiscate unused mining licences from companies and liberalise gold trading as ways to boost output. Large mines are "sitting on lots of unused claims", the country’s Chamber of Mines said in a document outlining initiatives of the proposed Command Mining programme.

Revisiting the Gold Trade Act "to allow for the ease of handling and transportation of gold to buying centres" and speeding up mine registration are among other recommendations.

Zimbabwe, whose economy has halved since 2000, is looking for ways to boost output growth to almost 10% next year, mainly through agriculture and manufacturing, and by giving more people access to banking services.

The country, which has the world’s biggest platinum reserves after SA, is experiencing a liquidity crisis that’s led to limits on daily cash withdrawals and resulted in civil servants being paid late last month.

A $40m central bank fund will buy machinery for small-scale miners, while banks will be encouraged to accept gold-sale records and geological survey reports as collateral under Command Mining, the document showed. Gold producers in Zimbabwe include RioZim, Metallon and Caledonia Mining.

Zimbabwe also mines chrome, coal, diamonds and nickel, among other minerals.

Bloomberg

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