Gold mining remains a vital component of Zimbabwe’s economy, with the country producing a record 36.48 tonnes in 2024 and aiming for 40 tonnes in 2025. While gold mining offers significant financial opportunities, it also presents substantial risks.
For companies in the gold sector, effective risk management is important. Mining is one of the most critical and high-risk industries globally. From exploration and extraction to construction and production, each stage of mining is accompanied by significant risks, ranging from environmental damage to equipment breakdowns and workforce safety hazards. Mining insurance is an essential tool for mitigating these risks and ensuring that your operations remain financially sustainable in the face of unexpected events
Selecting the correct level of mining insurance
When selecting mining insurance, it’s essential to work with insurance experts like Firstlink that understand the unique risks and challenges of the mining industry. Some general factors to consider though are:
Main Risks Covered by Mining Insurance
1. Property Damage and Business Interruption
Expensive equipment and infrastructure is susceptible to damage due to fire, accidents, natural causes or theft. Insurance policies covering property damage ensure that the company can replace or repair damaged assets, minimizing operational downtime. Business Interruption insurance will cover the loss on insurable gross profit or extra costs for maintaining production that are incurred during downtime of main machinery or plant.
Mining machinery is subject to sudden and unforeseen breakdowns, and malfunctions. Machinery Breakdown insurance provides coverage for repair or replacement, ensuring that production does not suffer due to equipment failure.
Bullion insurance covers against the loss of mined gold at an insured site or in transit. The ‘all risk’ cover provides physical loss or damage protection, inclusive of theft and transit risks.
The mining industry poses significant hazards to workers, including accidents, falls, and exposure to hazardous materials. Group Personal Accident insurance covers medical expenses, lost wages, and provides a death and permanent disability benefit if employees are injured on the job.
Various types of Bonds and Guarantees assist miners in managing cash flows. A Customs bond can allow a miner to get in mining supplies without paying duty at day one but only as and when the supplies are taken from the bonded warehouse for use in the operations. If a new mine wants to build its plant and seeks out a loan from banks, at times it maybe difficult to get one unless there is some form of insurance guarantee or debtors insurance. Other covers such as Advance Payment Import policy, Export Credit Insurance and much more are available to assist miners in various ways to bridge funding gaps, attract investment, or secure credit.
These include other covers such as Motor Insurance, Electronic Equipment, Liability insurance and much more.
Investing in mining insurance is not just about compliance; it’s a strategic decision that offers peace of mind, enhances investor confidence, and protects valuable assets from unforeseen events.
At Firstlink we assist mining entities and related companies to structure adequate cover for their operations. Our clients also benefit from our bespoke 360° Risk Management service. Talk to us today on (0242)744048/79, 0772434103, 0772392075 or 0773589694.
We are the leading Insurance broker in Zimbabwe providing bespoke risk management and insurance solutions to clients.
