Mining ZimbabweLatest Mining News, Policy and Industry Updates

Contango Holdings Plc, the developer of the Muchesu Coal Project in Zimbabwe, has announced the receipt of an additional US$500,000 in royalty payments since February 2025.

By Ryan Chigoche

This brings total royalties received under the Mineral Royalty Agreement (MRA) with Huo Investments (Pvt) Limited to US$1,000,000.

The agreement stipulates a minimum annual royalty payment of US$2,000,000, with expectations that actual receipts will significantly exceed this amount.

The second tranche of US$1,000,000 is currently being finalised between the parties.

Commenting on the development, Carl Esprey, the CEO of Contango, said:

“We have now received US$1,000,000 in royalty payments under the MRA. These royalty payments strengthen the Company’s capital position and reaffirm the investor’s commitment to Muchesu. Work and capital investment have continued at Muchesu since our last update, including the commencement of installation of coke batteries. An additional RNS will be made addressing operational activities. It is, however, highly encouraging to report continued investment and expenditure at site by the investor, who remains the Company’s largest shareholder (20.42%).”

This strategic transition to a royalty-focused model marks a significant milestone for Contango, enabling the company to reduce operational risk while maintaining exposure to the long-term upside of the Muchesu Project.

The partnership with Huo Investments—an entity led by a prominent Zimbabwe-based Chinese investor—has already delivered substantial financial backing, which is accelerating production capacity on site.

Recent half-year results also confirmed strong progress at Muchesu, with ongoing infrastructure upgrades and capital deployment aimed at scaling output.

With its new structure in place and royalty revenues secured, Contango is positioning itself as a low-risk, cash-generative player in the Southern African coal sector.

Zimbabwe’s steel sector is on the brink of a long-overdue transformation but remains shackled by the outdated Iron and Steel Industry Act of 1942, a colonial-era statute ill-suited for modern industrial ambitions, Mining Zimbabwe can report.

By Rudairo Mapuranga

According to Martin January, Training and Operations Manager at the Zimbabwe School of Mines, the archaic law poses serious obstacles to investment, job creation, and sustainable growth — particularly as dynamic players like Dinson Iron and Steel Company (DISCO) ramp up operations.

“Zimbabwe stands at a critical juncture in its industrial development, where modernising the antiquated Iron and Steel Industry Act of 1942 could unlock significant economic opportunities for both businesses and workers,” January stated.

Originally enacted during World War II, the Act was designed to maintain state control over steel production through a monopolistic framework centred around the now-defunct Zimbabwe Iron and Steel Company (ZISCO). Today, that model persists in law but not in practice — to the detriment of emerging private sector giants like DISCO, which is investing over US$1.5 billion in a massive steel manufacturing complex in Manhize.

“With the once-dominant ZISCO now non-operational, the legislation must evolve to support dynamic private sector players like Dinson Iron and Steel Company while protecting national interests,” January explained.

The Act effectively centralises power over licensing, production quotas, and pricing decisions, creating barriers to entry and stifling the flexibility required in a competitive, export-oriented industry. January highlighted that the law’s preservation of single-player dominance is counterproductive. “The current framework, conceived in a colonial era of monopolistic state control, now inadvertently hinders job creation and economic growth.”

He added that DISCO’s project — expected to be the largest integrated steel plant in Africa — represents exactly the kind of high-impact development Zimbabwe needs to industrialise, yet regulatory bottlenecks persist. January is calling for a multi-licensing system that welcomes both large-scale operators and smaller downstream firms, creating a diverse and inclusive steel value chain.

“By transitioning to a multi-licensing system, we can foster healthy competition while maintaining strategic oversight — benefitting both large operators and smaller downstream businesses,” he said.

Crucially, January argued that Zimbabwe must redefine steel legally — not as a mineral, but as a manufactured product. This single change would open new doors for trade, beneficiation incentives, and alignment with regional industrial policies.

“Redefining steel as a manufactured product rather than a mineral would create new export opportunities, translating to more stable jobs in mining, processing, and fabrication,” he stated. He further called for the introduction of modern environmental standards to ensure that Zimbabwean steel remains globally competitive, responsibly produced, and community-conscious.

Beyond regulations, the real-world human impact of reform is enormous. “The human impact extends beyond direct employment,” January noted. “A revitalised steel sector could support thousands of indirect jobs in transportation, equipment maintenance, and related services — particularly in steel-producing regions like Redcliff and Manhize.”

He also emphasised the value of building local capacity: “By linking investment incentives to skills development and technology transfer, we can ensure Zimbabwean workers gain valuable expertise for long-term career growth.”

January’s remarks echo broader concerns from the private sector and industrialists like DISCO CEO Ben Xu, who have repeatedly stressed that Zimbabwe’s steel potential cannot be fully realised without a modernised, investor-friendly legal framework.

With the African Continental Free Trade Area (AfCFTA) opening regional export markets and Zimbabwe’s industrial projects gaining momentum, the call to repeal or overhaul the Iron and Steel Industry Act of 1942 is growing louder. As January put it, these changes are not just about enabling private profits — they are about reshaping Zimbabwe’s entire steel economy and positioning the country as a competitive player in global trade.

Small-scale chrome miner and former Chrome Miners Association chairman, Shelton Lucas, has called for urgent investment in the country’s railway infrastructure, arguing that the lack of efficient rail transport is undermining the competitiveness of Zimbabwean chrome producers in global markets, Mining Zimbabwe can report.

By Rudairo Mapuranga

Lucas, speaking to Mining Zimbabwe, noted that while South Africa — Zimbabwe’s biggest competitor in chrome — is already supported by an extensive rail network with City Deep in Johannesburg as a key logistics hub, Zimbabwe continues to rely heavily on road transport, making its chrome exports significantly more expensive.

“From Mvurwi to Beira or Maputo by road, transport costs range between US$50 to US$60 per tonne. With proper rail investment, this could drop to between US$10 and US$20 per tonne,” Lucas said. “That difference is enough to transform our competitiveness and attract more buyers and investment in both chrome concentrates and ferrochrome.”

He added that Zimbabwe’s chrome sector is being priced out of key export markets due to high inland transport costs, which cut into producer margins and discourage beneficiation and value addition.

“When we talk about value addition in Zimbabwe, we must also talk about cost reduction through infrastructure. Railways are the artery of bulk mineral movement. Without rail, we can’t talk of serious growth,” he said.

Lucas said improved railway infrastructure could stimulate downstream investments in smelting and ferrochrome production, as investors would see Zimbabwe as a logistically viable destination.

His sentiments echo those of Dinson Iron and Steel Company (DISCO) CEO, Ben Xu, who recently told delegates at the Chamber of Mines Annual Conference in Victoria Falls that rail is not just an option, but a necessity if Zimbabwe is to become a global player in mineral exports and steel production.

“Zimbabwe is a landlocked country, but we want to make it trade-linked,” Xu said. “To link markets effectively, logistics are critical. Whether it’s steel, lithium, iron ore, or chrome, we need to ensure these products can move efficiently to ports and buyers.”

Xu warned that the country’s growing mineral output — particularly from iron ore, steel, lithium, and chrome operations — could soon overwhelm existing road-based logistics systems. He said DISCO has taken the lead in proposing the “Grand Railway Solution,” a special purpose vehicle (SPV) designed to partner with the National Railways of Zimbabwe (NRZ), government, and the private sector to modernise and expand rail infrastructure.

“Steel is not a light product. It’s not ideal for long-distance road haulage. To move large volumes efficiently, we must depend on the railway network,” Xu said. “DISCO is not a railway company, but we have initiated the Grand Railway Solution and are engaging with government to move the project forward quickly.”

The proposed solution would enable bulk cargo transport at a lower cost, making Zimbabwe’s exports more competitive in the region and beyond.

Lucas added that beyond cost savings, rehabilitating the railway system would decongest roads, reduce carbon emissions, and extend the life of road infrastructure, aligning with Zimbabwe’s environmental and climate objectives.

“We should look at this not just as a mining issue, but as a national economic strategy. From the farmer to the smelter, everyone wins when rail works,” Lucas said.

Currently, Zimbabwe’s mining companies pay a premium to haul minerals to ports in Beira, Maputo, or Durban, eroding profit margins and reducing incentives for beneficiation. Analysts estimate that a functioning railway system could save chrome and steel producers millions annually and make Zimbabwe a serious mineral export hub in Southern Africa.

As DISCO ramps up production at its US$1 billion steel plant in Manhize, targeting 600,000 tonnes annually, the urgency to fix rail becomes even clearer. Both Lucas and Xu agree: the time for talk is over, and the railway renaissance must begin now.

“If we don’t fix rail soon, we risk collapsing the entire vision for a value-added mining economy,” Lucas warned. “Zimbabwe’s future in chrome and steel depends on this.”