Mining ZimbabweLatest Mining News, Policy and Industry Updates

Zimbabwe’s mining sector continues to grapple with the challenges of transparency in revenue collection and distribution. While mineral extraction significantly contributes to national income, the absence of clear and accountable financial systems has impeded the sector’s ability to reach its full potential, Mining Zimbabwe reports.

By Rudairo Mapuranga

Speaking during a parliamentary engagement program hosted by Green Governance Zimbabwe Trust on Friday, Obert Bore of the Zimbabwe Environmental Law Association (ZELA) underscored the need for stronger legislative measures to enhance mineral revenue transparency in the mining sector.

Bore explained that the current Mines and Minerals Act lacks explicit provisions mandating mining companies to disclose financial transactions, including taxes and royalties paid to the government. While some companies—particularly those listed on international stock exchanges—voluntarily disclose this information, many others, especially Chinese-owned entities, do not. This lack of transparency undermines accountability within the sector.

“Illicit financial flows from mining are well-documented, yet there are no penalties in place to address them,” Bore stated.

He emphasized the importance of strengthening collaboration between institutions like the Zimbabwe Revenue Authority (ZIMRA) and the Environmental Management Agency (EMA) to address these issues.

Bore also highlighted the opportunities presented by the ongoing drafting of the Mines and Minerals Amendment Bill. He noted that the bill provides a critical opportunity to introduce penalties for illicit financial flows, enhance beneficial ownership disclosures, and promote contract transparency, as mandated by Section 315 of Zimbabwe’s Constitution. He also advocated for Zimbabwe to join initiatives like the Extractive Industries Transparency Initiative (EITI), which would align the country with global standards for governance and accountability in the mining sector.

“Stronger regulatory frameworks and independent oversight are essential for the future of Zimbabwe’s mining sector,” Bore concluded, urging Parliament to prioritize these reforms.

The Government of Zimbabwe has expressed satisfaction with Zimplats‘ progress in fulfilling its value addition and beneficiation commitments. This follows the company’s significant investments in expanding smelting and refining capacity at its operations, Mining Zimbabwe can report.

By Rudairo Mapuranga

Speaking to Mining Zimbabwe on the sidelines of a recent visit to Zimplats’ Selous Metallurgical Complex, the Minister of Mines and Mining Development, Hon. Winston Chitando, commended the platinum giant for making substantial strides toward meeting the goals outlined in the US$1.8 billion Memorandum of Understanding (MoU) it signed with the government. The MoU aims to expand mining capacity and establish key value addition infrastructure, including a new smelter and refinery.

Minister Chitando highlighted that Zimplats had already invested approximately US$1.1 billion of the total US$1.8 billion commitment. These funds have been allocated to increasing the company’s mining output, expanding its smelting facilities, and developing a state-of-the-art Base Metal Refinery (BMR), which will enhance the company’s ability to process base metals such as nickel, copper, and cobalt.

“Zimplats signed a US$1.8 billion agreement with the Government of Zimbabwe to increase and replace mining capacity and undertake value addition, specifically the expansion of smelter capacity and the establishment of refining capacity. I am very pleased with the progress they’ve made. They have not only signed the agreements but have also upheld the spirit of the agreement,” he said.

The Minister noted that the smelter is now fully operational and that the refinery is in an advanced stage of construction. Once completed, the refinery will enable Zimplats to process base metals, reducing the need for external refining and aligning with Zimbabwe’s push for local beneficiation.

“All the major components necessary for the operationalization of the refinery have been procured. Some items have already been assembled. We are now at the stage of the nickel section of the refinery, which will soon be producing nickel,” Chitando added.

The expansion of Zimplats’ smelting facilities has tripled its processing capacity, allowing the company to handle a larger volume of concentrates, not only from its operations but also from other platinum mines. Mimosa, for instance, is set to begin toll processing its concentrates at Zimplats’ smelter in January 2024.

The Minister emphasized that the establishment of the refinery marks a significant milestone in achieving the government’s vision for local value addition and beneficiation, which is a cornerstone of Zimbabwe’s broader economic strategy to achieve upper-middle-income status by 2030.

“Zimplats has made significant progress in fulfilling His Excellency’s vision of value addition and beneficiation in the country. The next steps are to complete assembly and operationalize the refinery, which will be a major milestone for both the company and the nation,” he said.

Once fully operational, the Base Metal Refinery will make Zimplats one of the few platinum miners in Zimbabwe capable of carrying out full beneficiation on-site. This will contribute significantly to the country’s industrialization and economic growth.

The government’s focus on value addition and beneficiation, particularly in the platinum sector, is expected to boost Zimbabwe’s export revenues, create more local jobs, and enhance the country’s standing as a leading player in the global mining industry.

Zimplats’ US$1.8 billion investment is a testament to the company’s commitment to aligning with the government’s economic goals, ensuring that the benefits of mining extend beyond extraction to sustainable development.

Global mining companies have slashed spending on grassroots exploration to a historic low. The share of global budgets allocated to early-stage exploration, primarily for nonferrous metals, dropped by 8% in 2024, bringing the total to just 22%, or $2.79 billion, Mining Zimbabwe reports.

By Rudairo Mapuranga

According to S&P Global’s latest report, the sharp decline signals a major strategic shift as companies increasingly prioritize expanding known deposits over pursuing new discoveries.

In contrast, the late 1990s to early 2000s were characterized by a robust focus on uncovering new mineral resources. Between 1997 and 2004, nearly 50% of exploration budgets were allocated to grassroots initiatives. However, over the last two decades, exploration firms have steadily reduced their early-stage spending, choosing instead to allocate more funds to late-stage and mine site exploration.

Cesar Pastrana, data analyst at S&P and the report’s lead author, highlighted the negative impact of this trend on the pace of new discoveries.

“The number of new finds, particularly for key metals like copper and gold, has been declining consistently. The amount of contained metal within these discoveries has also dropped significantly over the years,” Pastrana said.

This slowdown in early-stage exploration has raised concerns about the future availability of critical resources. Copper and gold, essential for industries ranging from electronics to energy, are particularly affected by the reduced exploration focus.

Factors Behind the Shift

Several factors have contributed to this shift in priorities. Following a sharp decline in metal prices after 2012, mining companies adopted a more cautious, risk-averse approach to their investments. The reduced focus on grassroots exploration reflects a broader industry trend of limiting financial risk by extending known mineral deposits rather than pursuing high-risk, high-reward new discoveries.

“This reallocation of budgets allows companies to boost their resources from existing projects, but it limits the potential for uncovering new large-scale deposits. We are seeing more reserves come from older mines, which isn’t a sustainable strategy in the long term,” Pastrana said.

According to the S&P report, late-stage exploration experienced the largest budget cuts in 2024, with spending dropping to $4.71 billion. This represents a marked decline from recent years, breaking a three-year trend of increasing investment in late-stage projects. Late-stage exploration now accounts for 38% of the global budget, the second-largest category after mine site exploration.

Meanwhile, mine site exploration—the least risky of the three stages—saw modest growth, rising by 2% in 2024. This stage, which focuses on extending existing operations, has emerged as the most attractive option for many companies operating in a tight capital environment, particularly those focused on gold and copper projects.

Regional Trends

A significant portion of the decline in grassroots exploration spending has been driven by Australia, a leading global mining hub. According to S&P, the country’s allocation toward grassroots gold and copper projects fell sharply by 32% and 25%, respectively, in 2024. Rio Tinto, Australia’s largest grassroots explorer, slashed its spending in the region by 57%, signalling a major pivot in strategy.

Australia’s cutbacks were mirrored in Latin America, where countries like Ecuador, Mexico, and Chile each reduced their grassroots exploration budgets by over $20 million.

The Future of Exploration

S&P Global’s report highlights the risks of this trend for the long-term sustainability of mineral resources. Pastrana emphasized that while focusing on known deposits can temporarily boost reserves, it ultimately limits the industry’s ability to discover new resources, raising concerns about the supply of critical minerals in the future.

“The industry’s cautious approach, shaped by volatile metal prices and constrained financing, is causing companies to play it safe,” Pastrana said. “This could jeopardize the long-term availability of key metals, making it harder to meet future demand.”

As the global mining landscape continues to evolve, the challenge will be balancing financial risk with the need for new discoveries. For companies and investors, navigating this dynamic environment will be critical to ensuring resource sustainability in the years to come.