THE reopening of the Kasenseli Gold Mine in Mwinilunga that has been lying idle for three years has injected great hope in the economy.
On Sunday, President Hakainde Hichilema commissioned the opening of Kasenseli Gold Mine after the resolution of major issues that led to the closure around October 2021.
Although long overdue, this marks a great milestone in the country’s mineral diversification.
This will be the first gold project implemented by the government in that Kasenseli Gold mine will be operated by ZCCM-IH’s Zambia Gold Company, in partnership with the Chibwika Chiefdom Development Trust.
The project has already created approximately 215 jobs during the initial exploration phase with the number expected to be in the range of 800 in the second phase.
An initial investment of K300 million will be pumped in thereby moving production to 100 kilograms of gold per year.
Being a green field project, another K600 million will be invested in exploration efforts which will enhance production capacity.
The long-awaited reopening of Kasenseli Gold Mine in Mwinilunga District of North-Western Province has opened a new chapter in Zambia’s quest to diversify the country’s mineral mix.
The country has since time immemorial been dependent on copper as the main source foreign exchange earnings resulting in critical instability in the foreign exchange market when copper prices on the international front falls.
The state under the new arrangement will through Zambia Gold Company Limited hold 95 percent stake in Kasenseli Mine.
Kasenseli holds the future of gold mining in the country due to its rich alluvial gold reserves and capable of helping the country in meeting its developmental milestones.
The other key factor in the new arrangement is that Zambia Gold Company and partners will allow mines and small-scale miners to process material from their plant and buy it from the local people once refined to spread the benefits.
This model will help spread the economic benefits to the local communities and will help in stabilising both fiscal and monetary objects as the government sets ambitious targets of staining key macroeconomic objects.
In the coming year , the Government is looking to attain a real Gross Domestic Product (GDP) growth rate of 6.6 percent; reduce inflation to the 6-8 percent target band in the medium-term and maintain international reserves above three months of import cover.
Other macroeconomic objectives will be to increase domestic revenue to at least 21.3 percent of GDP,reduce the fiscal deficit to 3.1 per cent of GDP while limiting net domestic borrowing to 1.9 percent of GDP.
Galvanising the gold mining sector among other new minerals will help the country attain and even surpass the key macroeconomic objectives looking at the lucrative nature of gold.
In the recent past , gold prices on the international market have been on the rise backed by the desire by global investors’ appetite to store value in gold as the world faces economic slump.
According to the latest market by Mining-com , gold is currently trading at US$2,612.83 per ounce from a low of US$1,800 in the same period last year
This should give the country impetus to explore for gold and Kasenseli given its mineral expanse is well placed to turnaround the country’s economic fortunes.
Given that the Bank of Zambia will be the offtaker, Kasenseli Gold Mine among others will help in stabilising the markets while boosting the country’s import cover thereby arresting the falling Kwacha.
With the country ‘rumoured’ to have 21 points across the country having gold deposits ,they can benefit more if key policy strategies aimed at regularising mining of the precious mineral.
The urge by the government to formalise gold mining through the facilitation of the formation of cooperatives with Zambia Gold Company being the buy of local gold and sell it to the Central Bank ,the economic turnaround will be on the horizon.
The formalisation of the trading of gold will help the Government collect more taxes from trade of gold unlike the current situation where the country is getting little benefits.
The envisaged establishment of gold marketing centres, with pilot projects already set in motion in Mumbwa and Rufunsa districts should be expedited for the country to benefit from the global price.
There is no doubt that the formalization drive is expected to bring structure to gold trading, a sector that has previously been seen as fragmented and informal, with Zambia’s potential as a gold producer largely untapped.
As Finance and National Planning Minister Situmbeko Musokotwane observed ,establishing official gold marketing centres will curb illegal mining while increasing revenue and foster better management of the nation’s resources.
A better managed gold mining sub-sector is crucial in creating a robust economy which calls for measures by the Government to ensure what is lined up to link gold mining to the economy is realised.
The reopening of Kasenseli Gold Mine should be the beginning of galvanising the upcoming industry .
Failure to effectively run Kasenseli will spell doom for the promising industry which called for measures that ensures successful running of the mineral resource.
Look out for another article next week on the review of another interesting sector.
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