Exploration key in achieving US$12 billion mining industry
The issuance of Exclusive Prospecting Order (EPOs) for the country to discover world-class deposits is of paramount importance for the mining industry to achieve the President’s projected US$12 billion mining annual revenue by 2023.
Rudairo Mapuranga
The mining sector truly has the potential to transform the economy which is expected to become an upper-middle-income earner by 2030, however, its major reliance on small-scale and artisanal mining will mean the vision like previously proposed blueprints will die a laughable death.
According to the US$12 billion roadmap, gold producers are expected to reach a target of US$4 billion while platinum and diamonds will weigh in US$3 billion and US$1 billion, respectively. Chrome, Nickel, and Steel are expected to generate US$1 billion, coal and hydrocarbons are also expected to produce US$ 1 billion. Lithium at the moment is expected to produce US$0.5 billion while other minerals are forecast to produce US$1.5 billion.
Without shooting down on their involvement in the resuscitation of the economy of Zimbabwe, small scale and artisanal miners cannot sustain mechanized mining of world-class operations. The country’s over-reliance on micro miners becomes a headache towards the achievement of the US$12 billion mining industry.
According to RioZim Chief Geologist Mr Patrick Takaedza, the country is not supposed to entirely depend on micro mining as artisanal miners are not capable of mining deep with low-grade mining being of significant challenge to them.
“Exploration is a very expensive and risky business which the small-scale miners have no capacity to undertake. The big companies who have that capacity will not invest in 10ha size claims for the simple fact that such a small area will never hold significant resource to recoup investment or produce for a couple of years”
“Recent thrust in exploration is to find deposits that are subsurface without any surface expression which the small-scale miner has no capacity to find”.
“Exploration diamond drilling costs approximately US$100 per metre. This means that EPOs focus on long term sustainability of the mining industry while small scale miners are just focused on near-surface, less than 100m reefs which sooner or later will get depleted and exhausted”
“Production will need to be replaced by deeper reefs or much lower-grade deposits and neither of these are attractive to the small scale. Artisanals will never sustain the mining industry because of these two simple facts. They can’t mine deep and they can’t mine lower grades’’ Takaedza said.
Although a notion has been pushed by micro miners and prospectors to ban issuing of EPOs, the notions must not be taken with seriousness because the basic concept of growing the mining industry is through mineral exploration.
Globally, to replace minerals that the country is mining, around 10 per cent of all capital expenditure in mining goes towards exploration, however, in Zimbabwe, it is near to 0 per cent with the Finance Ministry throwing up ridiculous budgets for exploration.
Clearly, Zimbabwe has lagged behind the rest of the world in terms of mining. The country used to be one of the largest producers of gold in Africa but currently, it is nearly close to nowhere because no new deposits are being found like in other countries in Africa.
Can Gold Contribute $4bn?
The only exploration happening in Zimbabwe at the moment is a way to see if old mines can be reinvested for example Caledonia mining, a company foreseen to be at the forefront in achieving the projected gold target is exploring mining properties in Chiundura which are Connemara North and Glen Hume. Connemara North is the northern section of the currently closed Connemara mine, which was previously owned by First Quantum Minerals while Glen Hume has historically produced significant quantities of gold. The country is therefore not prepared to look for new deposits but trying to explore the viability of old mines.
According to Chamber of Mines Chief Executive Officer Mr Isaac Kwesu, the country is hamstrung by lack of exploration leading to the country failing to discover new world-class deposits.
“We have significant, extensive gold deposits in Zimbabwe, although we have not been exploring much. The country has remained largely under-explored and has not been using modern exploration techniques, thereby limiting the discovery of new, richer deposits and this tends to slow down development and growth of the gold industry to a larger extent,” Kwesu said.
The production of gold has been disappointing in the past two decades with nothing there to show that the country can achieve the 100 tonnes target with gold production pick coming only in 2018 where 35 tonnes were recorded. The only serious investment for the country to achieve its target is by taking exploration have serious.
Is the Platinum target achievable?
Zimbabwe, which has the world’s third-biggest platinum group metal reserves has struggled to develop its mining potential with investors from Russia, Cyprus, Nigeria, and Kazakhstan yet to bring projects into production.
Platinum is earmarked to contribute US$3 billion, an amount based on optimisation programmes of the current three producing mines — Zimplats, Unki, and Mimosa which according to experts is near to impossible. The country should invest in exploration for Platinum concession holders to start operating by giving them economic incentives that encourage them to qualify and quantify their claims’ mineral potential and mining viability.
Without looking into how platinum mines can develop, the “use it or lose it” policy will be the only achievable government policy with platinum concession holders or new players not able to explore for new deposits and mining viability.
Is lithium target achievable?
Although Zimbabwe is one of the fifth largest lithium producers, it exports less than three tonnes of lithium per annum with only one operating mine in Bikita Minerals. Although three other projects like the Arcadia lithium project, Shamva, and Zulu expected to add into the country’s productions no significant change will be recorded for the sector to fetch half a billion.
Lithium exploration becomes the only viable means for the sector to contribute to the US$12 billion mining roadmap.
US$1 billion Diamond production achievable?
The country has only three operating diamond mining firms struggling to reach half a billion in revenue. One of the diamond operating mines Murowa diamonds reportedly running out of diamonds and depleting high-grade gems.
World largest diamond producer, Russia’s Alrosa is still carrying out exploration to find out the viability and richness of the diamond resource in the country.
The country should serious consider investing in the diamond industry if the US$12 billion mark is to be achieved by 2023.
The rewards of successful exploration and development can be large if a mineral deposit is discovered, evaluated, and developed into a mine. For a mining company, successful exploration and development lead to increased profits. This means the country needs to consider seriously investing in exploration through issuing more EPOs if the country is to achieve the projected US$12 Billion mining sector.
This article first appeared in the Mining Zimbabwe Magazine of June 2021