Improving Productivity In Gold Mining Commerce Essay

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The Zimbabwean economy is in a recovery path and the mining sector, particularly the gold mining industry is crucial to the growth and re-construction of our economy, however there has been some worrisome fall in gold output. Mukoshori (2012) reported that gold output plunged from 1053kgs in January to 953kgs in February earlier this year. The question then is what may be the cause of this unfathomable situation? Many a reasons may be given: lack of investment in the mining sector, illegal sanctions imposed on the government and government policies in the mining sector.

There is dire need to reverse this situation where we have downfalls in our gold output as this is pivotal to the turnaround of our economy. Productivity can be our panacea. Slack, et al (2007) refers to productivity as a ratio of what is produced by an operation to what is required to produce it. It is the measure of how well an entity or industry is using its resources (or factors of production). It is not just concerned about making use of resources but about making the best use of the resources available to the firm.

This productivity can be in the form of improving the small scale gold mining.The small scale miners play a vital role in the economy, herald on 6 June 2012 quotes the ZMF¡¦s president Mr Trynos Nkomo saying in 2005 they produced more than half of the gold output and they are hoping to repeat the feat this year. This paper aims to bring about practical strategies that stakeholders can adopt to improve the small sector gold mining in Zimbabwe.



2.1 Sourcing Finance and Equipment for small scale miners

Most small-scale miners lack the finance and resources to mine at their full capacity.Some of the small scale mines are seasonal in their operations and are closed during the rainy seasons. The miners do not have the equipment to drain the water which would have filled their open cast mines.

Most miners use manual mining techniques and they need to progress into semi-mechanic mining by purchasing pumps and washing machines. Funds are not only needed for the equipment but also to hire more hands and as well as retain skilled manpower so that their operations will realise full potential. Stakeholders in bringing the much needed funds and equipment can help to improve gold small-scale mining.

The government can set up pilot micro finance schemes in Zimbabwe solely for small scale miners. These loans will be given to members of the small scale mining community who can show solid business ability so as to avoid wastage of government resources.

Banks as stakeholders also have an important role in improving small-scale gold mining by bank rolling the small sector miners. Banks often see this sector as risky and can reduce the risk by requesting the miners to form co-operatives so as to ensure their continuity of operations and increase their base of collateral. They can also work with the ZMF to determine credit worthiness and eligibility of loan applicants. ZMF and the government can also act as insurers and they would chip in situations where a miner fails to honour the debt.

Funding will help the small-scale gold miners to erect proper mining infrastructure and buy equipment for extraction as opposed to the current scenario where most of them have make


shift structures that are susceptible to collapse. For productivity to increase it is imperative that the miners are committed to improving themselves, to avoid abuse of funds.

Government can hire out the equipment to small scale miners or they can implement a similar program like the Farm Mechanisation Programme in the small mining sector, so as to mechanise the sector. Banks can also avoid abuse of funds also by being involved with their clients through helping them in getting equipment by connecting the small-scale miners to the equipment providers.

2.2 Introducing a Productivity Board of Zimbabwe

Another strategy would be for the government to form an independent board whose mandate would be to carry out researches on ways to improve productivity not only in the gold mining sector but in all production sectors of the economy. The board need to be made as an act of parliament to give it independence. The board can be called something like the Productivity Board of Zimbabwe (PBZ) and will be made up of academicians and captains of industries in different sectors and will have different divisions (as depicted below) and each division will represent a sector of the economy and will be dedicated to improve productivity of that sector.


FIGURE 1: Productivity Board of Zimbabwe¡¦s Organogram

The role of this board¡¦s mining division would be to carry out researches on how to improve productivity in this industry. For small-scale mining this division may use Frederick Taylor¡¦s Principles on how to improve the productivity of a manual worker because most small-scale miners are manual workers. Relating to Taylor¡¦s principles (1911) in Drucker (n.d) the researchers will need to look at the miners tasks and analyse its constituent motions. They will then look at each motion, in relation to the physical effort it takes and the time it takes. The motions that are not necessary can be eliminated and each of the motions that remain essential to obtaining the finished product (gold in our case)) are set up as to be done in the simplest way, the easier way, the way that puts the least physical and mental strain on the miner, the way that requires the least time.

Parliament of Zimbabwe









Taylor (1911) in Drucker (n.d) also says that whenever they have looked at manual work they found out that a great many of the traditionally most hallowed procedures turn out to be waste and do not add value to production. This may be true as some scale miners still use the same procedures that were used long back. The tools that the miners use may also need redesigning as they may be wrong tools. It does not matter that the miners may have been using those tools as far back as centuries ago. The researchers will have to look at the shape, size or even the handle of the tool as they may not be the best for the job.

Consultation for this board can be made to countries like Australia who have a similar commission and it can be adapted for the Zimbabwean situation. Topp, et al (2008) expresses the role of the Australian Productivity Commission as simply to help governments make better policies in the long interest of the Australian community. The PBZ can play the same role for the Zimbabwean government in small-scale gold mining industry.

2.3 Introducing a new ACT and legalising gold panning.

The small-scale mining industry would be greatly improved if they can have their own act possibly called the Small-Scale Mining Act. Small scale miners would be registered under this act. Ghana has a similar act and they established this act in 1989 according to Amankwah &, Anim-Sackey (2004). Small-scale sectors complain of being subjected to a large number of Acts and Laws, being required to maintain a number of registers and submit returns, and face an army of inspectors.

Under this new act procedures would be simplified, bureaucratic controls effectively reduced, unnecessary interference eliminated and paper work cut down to the minimum to enable the miners to concentrate on mining. This will ensure that the small scale miners are organised,


kill the black market and destroy price distortions and all the gold that is panned will be recorded officially.

The miners will be able to get funding as they will be registered and licensed. Gold panners fall under small-scale miners and under this act they may became registered as legal miners. The Herald on 17 July 2012 says there are plans in making the gold panning legal under the current mine and minerals act but it would be great if they had their own pierce of legislation as this would cater for all the small-scale miners.

Under this new act there must be clause that those given claims if they do no work on their claims by a certain period the government would reclaim the claim. This will help in making sure that those given claims are working on them and not just for capital appreciation. Most scale miners are blamed for pollution and damaging the environment. Under the new act a Land reclamation fund like in Ghana will be set up from retention on the value of gold sold from the small scale miners. This will be used to correct all the land damage that will be as a result of small-scale mining.

The new act would surely improve productivity as arresting of gold panners will become a thing of the past, small-scale mining will become organised and there will be a specific act governing the small-sector miners.

2.4 Education, Training and Workshops for small scale miners

Miners have to be educated and necessary skills acquired in order to perform mining activities in a safe and environmentally friendly manner.The absence of knowledge and skills is demonstrated and evidenced by miners¡¦ continuous use of basic production, processing and marketing techniques that were used decades ago.


Without knowledge most of the miners who use gold mining techniques without any mechanical aids will continue to shun more sophisticated recovery equipment as they will lack the skills to operate such machinery, making it difficult to increase their gold outputs.

Workshops on record keeping and financial management would be of tremendous help to small scale miners. These workshops may need to be done in our mother tongue as some of the small scale miners would be uneducated; attendance of these two should be a pre-requisite for future lending. Beneficiaries should be required to adopt them.

Government can organise these workshops with NGOs like USAID and these workshop will surely increase productivity as miners will learn new ways of increasing production, how to financially record their transactions and on how to make sound business ideas and also how can they make their business ideas. During these workshops the miners would be able to meet fellow miners and share ideas on how to increase their gold output.

2.5 Improving relationships with large mining companies

Small scale miners have to improve relationships with large mining companies as this is beneficial to them. Large companies need to cede portions of mining concessions where the total reserves are too small and therefore uneconomic to mine on a large scale to the mining ministry for licensing to the small scale miners along the lines of statutory law.

Mineable land sometimes is only ideal for small scale mining and is not amenable to large scale mining as small scale miners have very low overheads, due to the use of unsophisticated or inexpensive equipment. In addition production costs per ounce of gold are relatively low.

Most large companies are blamed for land degradation in areas where they mine and they pass this blame to small-scale miners in their areas. This can be reduced by certification. The idea is to certify gold that is produced in acceptable conditions. The concept is being


promoted by the Alliance for Responsible Mining (ARM), ARM aims to apply social and environmental standards and improve working conditions in small-scale mining. Certification serves as a tool to help to organise artisanal miners and formalise their business. ARM and the Fair Trade Labelling Organisation (FLO) have set standards for fair trade gold (Morazan and Muller, 2012)

2.6 Organising small- scale miners

The miners will need to be organised into Co-operatives, enterprises and companies. This will increase their capital base, allow maximum utilisation of existing equipment and help in improving their skills base. Co-operatives would help in ensuring continuity and widening of skills depth.

It would however be best to register these small scale miners as companies as this will help in getting funding. Organising small-scale miners will help in changing the attitude of people towards small scale miners as the will seem organised and on a mission.

Importance of mining in groups can be highlighted by illegal panners who operate in groups called syndicates or ¡¥sindalo¡¦ in local language, they realised that more can be done in groups rather than as individuals. Certification can only be implemented where small-scale miners become organised, however the particular way they organise should fit their needs and not be predefined by other agencies (Morazan and Muller, 2012)

Being organised is a one of the fundamentals of improving the small-scale gold mining. ZMF has a role to play in making sure that its members understand the importance of getting into co-operatives. The co-operatives have to be made of local members so as to enjoy the benefit of being in a group.


2.7 Exploration

The government¡¦s geological survey department has to carry out surveys of probable land for small-scale mining. Small-scale miners cannot survive on the basis of current reserves only. Due to limited reserves individual miners are not in a position to conduct exploration activities (Amankwah &Anim-Sackey, 2004). They often rely on local information.

Geoscience and mapping data collected for mining purposes can contribute to improved land use planning. This can help dress issues relating to competing land uses, which in turn helps to avert negative impacts on agricultural production and food security.

Exploration done by the government will reduce land degradation as scenarios where everyone is digging up land for gold is averted. This is important if the small scale mining is to continue to be in existence in the future as the miners lack exploration funds and equipment. This will help in avoiding a situation where we have improved the small-scale mining industry only to have it collapse in the next few years.

2.8 Other roles by Government.

The government is the major player in improving the small-scale gold mining sector. They can do the following to improve the sector:

„h Slashing of mining tariffs from small-scale miners would boost production in that the miners¡¦ financial burden would be reduced. Another way would be to exempt these miners from paying their taxes from mining activities for a certain period like the first five years of operation

„h In Farming there are floating trophies awarded to farmers who would have exceled that year. Similarly such can be organised for small scale miners to instil competition among them so as to promote productivity.



Benefits of productivity are many to the nation and to the miner. The miner can be able to meet his obligations, remain competitive or improve his competitiveness in the market place. Small-scale miners need to be made aware of benefits to them of improving productivity, so that they become aware of its importance. To the nation itself, jobs are created, its fiscus increased as well as its GDP, however productivity is a relative measure. The (2007) says that for productivity to be meaningful it needs to be compared with something else, that is, there is need for comparability.

Also minerals are non-renewable resources that are subject to exhaustion in the course of production. The exhaustible nature of mineral resources places a limit on growth of this industry and hence its sustainability. The small scale gold mining needs to develop in a sustainable manner.

Lastly if the strategies outlined above are to be carried out in a practical and committed way gold production would increase and this will enable Zimbabwe to be re-admitted into the London Bullion Market.