A GROUP of Israeli investors have forged a consortium — Yaron Goldstone Mine — with local entrepreneurs to develop two gold mining and processing projects in Bulawayo and the Midlands valued at $5 million.
The local consortium partners include former football administrator Henrietta Rushwaya, who has been appointed chief executive officer of Yaron Goldstone Mine, and Matabeleland resident Thomson Mpala.
The 15-member delegation, which jetted into Bulawayo on Tuesday, toured one of its two investments in Zimbabwe at Montgomery, about 15km from the city centre where a gold Clean-In-Processing plant has been installed at an estimated cost of $1,5 million.
The second project is situated at Shangani Gold Mine complex where the consortium has pumped in $1,5 million to purchase and instal three stamp mills to process gold ore mostly bought from small-scale miners.
The investors toured the Shangani project on Tuesday soon after touching down in Bulawayo.
The remainder of the $5 million investment, according to officials, has gone towards the development of the mining projects, administrative and operation costs.
Yamin Yaron, the head of the foreign delegation, told Southern Eye that apart from the initial $5 million investment for the two projects, the investors were prepared to pump in a further $100 million in the next few months provided there was a friendly and conducive business environment.
Yaron added that the Israeli investors were gaining confidence in the investment climate in the country.
“We are looking at investing close to $100 million in different sectors of the economy including mining, but this is dependent on how we will be accepted,” he said.
The country has been criticised for having the worst business environment largely due to the indigenisation law which calls for foreign companies to cede 51 % of their shareholding to locals.
The law has been blamed for scaring away investment, but Yaron said his delegation was not worried about complying with the law although he added an environment enabling the smooth facilitation of investment was necessary.
Rushwaya said the consortium had already embraced the country’s indigenisation laws as it had included locals in the two gold mining projects in Bulawayo and Shangani.
She confirmed the Israeli investment partners had come to see the projects, but were considering channelling more funds in expanding the projects in Bulawayo and Shangani.
“These projects are in response to the government’s calls to have raw materials mined in the country processed within so that in the process we create more jobs for locals. The idea is to have finished products produced locally in the gold mining sector.
“Since industry has been very low in Bulawayo and the Midlands, we are playing our part in generating employment and keeping the wheels of the economy moving in these parts of the southern region,” she said.
Unemployment countrywide is estimated at over 80%.
Analysts point out that the country is desperate for foreign direct investment to grow the economy which this year slowed down to 3,4% from the initial target of 5% largely due poor performance of agriculture and manufacturing sectors.
The sectors are battling to attract foreign capital inflows which have seen companies struggling to stay afloat.
Despite the recorded 17% growth in mining this year, the sector is also under threat with players now reluctant to invest in exploration projects largely due to shortage of working capital.