Mining ZimbabweLatest Mining News, Policy and Industry Updates

The Minister of Mines and Mining Development, Hon. Winston Chitando, has reiterated the importance of prioritizing research to discover new sources of critical minerals and develop cutting-edge technology for their extraction, processing, and value addition.

By Rudairo Mapuranga

The Minister stated that realising value addition projects along the Critical Minerals Value Chain would offer numerous benefits to the people of Zimbabwe.

“The benefits include employment creation both directly and indirectly, increased revenue inflow from taxes and export of value-added materials, less dependence on the import of finished products as these will be made locally, and ultimately the realization of Vision 2030 of becoming an upper-middle-income economy,” Hon. Chitando said.

Minister Chitando highlighted the challenge in the processing and refining of minerals, noting that most of the world’s current processing capacity for critical minerals is concentrated in a few countries, which can create price vulnerability, leaving Zimbabwe as a price taker rather than a negotiator.

He emphasized the importance of Zimbabwean stakeholders coming together to invest in research and development to ensure the country benefits from its critical minerals.

“Another challenge is the processing and refining of the minerals. Most of the world’s current processing capacity is available in a few countries. This has the potential to create vulnerabilities and price fluctuations. It is in this light that the country must develop domestic refining and processing capabilities to enhance economic independence. We need to take a comprehensive and cooperative approach in order to overcome these challenges and take advantage of the potential that critical minerals bring. Prioritizing research and development is necessary in order to find new sources of critical minerals and create cutting-edge techniques for their extraction and processing. We, as the Government, therefore implore all stakeholders to work together to ensure the sustainable growth of the critical minerals value chain. Let us work together to harness the transformative power of these remarkable minerals and build a brighter future for generations to come,” Chitando said.

By definition, critical minerals are mineral commodities that have significant economic importance for key sectors in the economy, whose uses are essential, have a high supply risk, and have no viable substitutes. As we embark on an era of unprecedented technological advancements, critical minerals have become the cornerstone of modern society. These minerals find use in space technology, consumer electronics, health, aviation, agriculture, renewable energy, and defence, among others, which are deemed critical for the long-lasting functioning of a country’s economy. Their high supply risk is due to the very high import demand in particular countries. Zimbabwe is endowed with vast mineral resources, including those discussed here today—critical minerals. The country boasts deposits of highly sought-after critical minerals, particularly hard rock lithium, nickel, copper, graphite, and platinum group metals, among others. The criticality of any mineral changes with time as supply and the needs of a country shift. It is in this light that the Government has moved to ensure maximum benefit is reaped from the exploitation of most of the stages that make up the Critical Minerals Value Chain in Zimbabwe. Exploration, mine development, mining, mine closure, mineral processing, smelting, refining, manufacturing, and recycling are all included in the mineral value chain. There are several opportunities for Zimbabweans anywhere along the Critical Minerals Value Chain,” he concluded.

De Beers has unveiled a comprehensive five-year strategy to reposition itself as the top luxury jewellery group.

While the company already sells diamond jewellery through its global network of boutiques, CEO Al Cook plans to significantly expand the number of retail outlets to compete with luxury brands like Tiffany and Cartier.

“If I look at the future of diamonds, it is way beyond mining,” Cook was quoted by the Financial Times. “I’m really excited by the idea that we can really deploy our full strategy all the way to creating the world’s greatest jewelry maison [house], which would not be a natural part of a mining company.”

De Beers, known for driving demand for mined diamonds, aims to capture the interest of a new generation with its “Origins” strategy. This plan focuses on revitalizing marketing efforts to boost interest in natural diamonds and employing innovative methods to maximize reach and impact.

In a significant move, De Beers is phasing out its lab-grown diamond operations. This marks the end of a six-year experiment selling lab-grown diamond jewellery under its Lightbox brand, launched in 2018. Although the company will continue selling its existing Lightbox inventory for about a year, it will then reconsider the unit’s future.

Collaboration with retailers is crucial to De Beers’ new approach. The successful “Seize the Day” pilot campaign, launched in September 2023, demonstrated the potential of such collaborations, receiving support from over 22,000 retail stores. De Beers plans to build on this by developing strategic partnerships with major retailers, including Signet Jewelers in the United States and Chow Tai Fook in China.

De Beers already owns the Forevermark diamond brand, available in more than 2,400 jewellery retail stores. The company has also opened dedicated stores in 16 different markets, including prominent locations like Madison Avenue in New York City and the Houston Galleria, alongside its De Beers Jewellers website.

The move away from lab-grown diamonds comes as the diamond industry faces challenges from increasing consumer preference for cheaper alternatives and global economic instability. Last year, consumer demand for diamonds declined in both China and the US, which together account for about half of the global diamond jewelry market.

In response, De Beers made significant price cuts in January, lowering diamond prices by about 10% to revive sales. The company also revised its full-year production forecast down to 26 million-29 million carats from the previously guided 29 million-32 million. It increased expected average costs to $90 per carat, from $80, and announced a $1.6 billion writedown.

Despite these challenges, De Beers is targeting annual core profits of $1.5 billion by 2028. Last year, the company made just $72 million, although its traditional profit range has been between $500 million and $1.5 billion.

As De Beers prepares for its future, it seems ready to operate independently once again, as it did for most of its 136-year history. Anglo American acquired an 85% stake in De Beers in 2011, with the remaining shares held by the government of Botswana.

Pan-African mining company Bravura Group is confident that the softening of commodity prices will not affect their operations, even if prices remain low, due to their early planning before embarking on projects.

Rudairo Mapuranga

The group, which is currently undertaking exploration activities at the Selous Platinum Group Metals (PGM) project, the Manhize Iron project, and preparing to process lithium dumps at the former Kamativi tin mine, is confident that it will become one of the leading miners in Zimbabwe.

Speaking at a media briefing in Harare on Tuesday, Bravura Group General Manager Mr Gbenga Ojo said his company prides itself on planning ahead and had already anticipated softening commodity prices before starting their drilling campaigns or the manufacturing of the lithium processing plant for the Kamativi dump.

He said the company focuses on in-house investments and is not dependent on contractors to ensure that work is not disrupted due to contractual challenges.

“Before embarking on our projects, it is important to note that our choice of commodities—platinum, iron ore, and lithium—was strategic. The budget and finances required for these projects were secured beforehand. Regarding commodity prices and their impact on our projects, we have strategies to mitigate competition. One key strategy is our vertical integration. Historically, many mining companies have collapsed during commodity price crashes, which typically occur in five-year cycles. We anticipated this before starting. By being vertically integrated, we avoid issues like dependency on contractors, which became evident during COVID-19 when many companies faced crises due to contractor agreements. In our case, our drills are in-house, avoiding such contractual challenges. In conclusion, we have the budget and have analyzed the costs, taking into account the commodity cycle. Although there’s currently a dip, we remain confident in our strategies and operations.”

For Zimbabwe to benefit from its minerals, the focus must be shifted to industrialization as a key point in the value addition of the country’s minerals.

By Rudairo Mapuranga

Speakers at the Chamber of Mines of Zimbabwe Annual Mining Conference in Victoria Falls emphasized that industrialization will ensure that Zimbabwe becomes a leading nation in growth and economic recovery, greatly benefiting from its resources.

Heresy Herry from Nedbank highlighted the finite nature of mining and stressed the importance of developing value chains and sub-industries to sustain future generations.

“I think what’s crystal clear, based on the presentation by the PGM, is that mining is a finite resource. The only thing that’s going to sustain our great-grandchildren are the value chains and the sub-industries that will create their farm. But I’ve been coming here for the last six to ten years, and I’ve never seen the Minister of Industry as part of this symposium. As we talk about creating a $12 billion industry, there must be a complementary document that gets us from the $12 billion that Isabella was talking about to the $7.3 trillion. Let’s take a cue from what’s happening in India. They have no diamonds to speak of, but they’ve been able to create an industry.”

Hon. Supa Mandiwadzira elaborated on the need for industrialization and the importance of local value addition.

“I thought it was very interesting to see what we now understand and know about the platinum PGMs industry. But I think context is always important. It would have been better if they told us how much the three players made in terms of profits over the last five years, so we can understand whether the problems they are presenting are due to market depth or a lack of planning. It’s related to the question raised earlier about projections and pricing forecasts. Additionally, the industry is beginning to use greener PGM replacements, such as recycling, and there is a concern about the rise of EV vehicles, which means it’s a dying industry. The question is whether the government should take so much money from a dying industry while prices are still high.

“The industry has made a lot of money, and we know the statistics. What value chain industries have they created? They supported local suppliers for the platinum industry, but they still import from South Africa and China. Have they deliberately supported local manufacturing to replace these imports with locally produced materials? Lastly, there’s a concept of contractors reducing their costs by 10% during crises. This should work both ways: when the industry is making more money, they should also increase payments to contractors. It has to be fair.”

Trevor Barnard, CEO of Kuvimba Mining House Group, stated that the obvious strategy is to add value through the downstream processing of minerals, ensuring they are value-added before export.

“There are abundant mineral resources within Zimbabwe, and there is a growing global demand for them. We expect this demand to increase threefold by 2030 and beyond. Investment partners are willing to join us in these ventures. The obvious strategy is to add value through downstream processing of these minerals, ensuring they are value-added before being exported to the market,” Barnard said.

According to Paul Jourdan from Africa Mining Vision, Zimbabwe has the capacity to produce an industry that can sustain the SADC region.

“For Zimbabwe to benefit, industrialization should be on the country’s agenda. We need to leverage our critical minerals to improve infrastructure, including rail, road, and power, not just for mining but for our people. Fiscal linkages need improvement, and a sovereign wealth fund capturing surplus resource rents, similar to those in Norway and Kuwait, is crucial. Investing in dual knowledge is essential for forward and backward linkages. Basic exploration should be state-led, with properties auctioned for the best return. STEM skills and RDI investment are vital for achieving the big prize: industrialization through backward linkages, including capital goods, consumables, and services. Economies of scale necessitate cooperation among African countries. Stronger economies, like South Africa and Zimbabwe, with their industrial capacities, should lead, displacing foreign imports with local production.

The African or SADC green mineral strategy addresses global warming and the transition to a low-carbon economy. Our renewable energy resources, among the largest globally, can drive industrialization and improve living standards. Unconnected populations offer a leapfrogging opportunity, similar to the adoption of cellular lines over landlines. Mining and processing should integrate green minerals into global value chains while prioritizing local value chains for industrial opportunities. Local production of renewable energy equipment, like solar panels and windmills, is feasible with regional cooperation, providing economies of scale. The objective is to industrialize Africa, leveraging our green mineral endowment and renewable energy resources. We need to address greenhouse gas emissions, focusing on critical infrastructure, fiscal linkages, and localizing mining supply chains. This approach will drive our industrialization and development, ensuring a sustainable and prosperous future for Africa,” Paul Jourdan said.