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ESG Compliance Crucial for Attracting Investment in Zimbabwe – ZELA

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ESG Compliance Crucial for Attracting Investment in Zimbabwe – ZELA

Large and medium-scale miners in Zimbabwe must comply with both national and international responsible mining practices to attract significant investment and ensure that minerals are not flagged on the international market, Mining Zimbabwe can report.

By Rudairo Mapuranga

Speaking at a Zimbabwe Environmental Law Association (ZELA) Media workshop on responsible mining and sustainability reporting in Kadoma on Tuesday, Tafara Chiremba emphasized the importance of Environmental, Social, and Governance (ESG) standards in fostering long-term benefits for the government, mining companies, and surrounding communities.

“It is important for mining companies to have standard ESG reports because it helps them attract the right investment, secure markets, and maintain their social license to operate,” Chiremba stated.

ESG reporting is increasingly vital for Zimbabwe’s mining sector, with adherence to global standards like the Global Reporting Initiative (GRI), the Initiative for Responsible Mining Assurance (IRMA), and the Extractive Industries Transparency Initiative (EITI) becoming essential. These frameworks promote ethical practices, environmental protection, and community development, ensuring that Zimbabwe’s minerals meet international sustainability expectations.

Proper ESG compliance also helps mitigate the risk of reputational damage, ensuring that Zimbabwean minerals are not blacklisted in global markets where responsible sourcing is prioritized. Furthermore, it positions companies to be more competitive, attracts favourable investment, and drive sustainable growth in the sector.

In a world increasingly focused on sustainability, adopting ESG standards is not just a responsibility but a strategic necessity for Zimbabwe’s mining firms to thrive globally.

Fidelity Gold Price Breaches the US$80/g Mark

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Fidelity Gold Price Breaches the US$80/g Mark

Today, Fidelity Gold Refinery (FGR) gold prices breached the US$80 per gram mark today, the highest price ever paid for bullion, Mining Zimbabwe can report.

By Ryan Chigoche

The FGR bullion price has been hovering between US$70 to US$78 per gram for some time, failing to breach the US$80 per gram mark. However, this new FGR price benchmark is expected to further increase gold deliveries to the country’s gold buyer.

After reaching a historic level of US$2,480 per ounce last July, the price of gold set a new record at US$2,530 (US$90 per gram) on August 20 on the global market. Since the end of 2019, the price of gold has increased by 73%, as in late October 2019, an ounce cost US$1,459.

With this new gold price, FGR has closed the gap with global market prices, which have been on a bull run, attributed to heightened demand for safe-haven assets.

The increase in the FGR price will most likely encourage gold deliveries, which were down 2.7%, with purchases amounting to 3,400.34 kg, as small-scale miners continued their recovery in gold deliveries.

Although there was a dip in deliveries to the state entity in August, the figures represented a significant increase of 37.12% from the 2,479.78 kg achieved in August of the previous year.

In terms of deliveries, small-scale miners have maintained their output over the past three months despite fluctuations in large-scale mining activities. As of August, small-scale deliveries were up 1.27% to 2,373.05 kg, a new nine-month high, as government-led mobilisation efforts continue to pay off, coupled with an improved payment regime from Fidelity. These deliveries made up 69.79% of the August monthly total.

While Zimbabwe has not been able to fully capitalise on the rally in global prices to significantly boost its earnings, gold is expected to contribute to next year’s projected economic growth of 6%, alongside lithium, iron and steel production, and a rebound in agriculture.

The gold sector is already a major contributor to Zimbabwe’s economy, accounting for about 40% of the country’s total export earnings.

AMMZ to Host Technical Visit and AGMs at Blanket Mine

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AMMZ to Host Technical Visit and AGMs at Blanket Mine

The Association of Mine Managers of Zimbabwe (AMMZ) is set to host a joint technical visit to Blanket Mine, along with its Annual General Meetings (AGMs), from November 21st to 24th, 2024, at the Holiday Inn Hotel in Bulawayo.

By Patricia Rwafa

This visit offers a unique opportunity for members to gain firsthand insights into the operations and innovations at one of Zimbabwe’s premier mining sites.

Announcing on its LinkedIn, X, and Facebook pages, AMMZ, also known as the technical arm of the Zimbabwe mining industry, stated that members wishing to attend should register by November 21st.

“Members wishing to participate in this prestigious event can register using the QR code provided in the flyer or the link below:”

https://lnkd.in/dTwGvKr5

The visit aims to provide a comprehensive understanding of the challenges and successes in modern mining operations, covering the latest technological advancements, environmental sustainability initiatives, and workforce development strategies.

Participants will have the chance to learn directly from industry experts and gain valuable insights into the future of mining in Zimbabwe.

In addition, attendees will have an exclusive opportunity to network with seasoned professionals leading Zimbabwe’s large-scale mining operations, gaining insights into the industry’s challenges and achievements.

AMMZ highlights the critical role of such visits in developing mining professionals and fostering knowledge sharing among its members. Direct exposure to Blanket Mine operations will allow members to enhance their technical skills and implement proven strategies in their respective areas.

The association encourages all interested members to utilise this opportunity to network with peers and industry leaders while expanding their technical expertise.

To further enhance the experience, both AMMZ and the Chamber of Mines have invited their members to attend the upcoming AGMs.

Program Overview:

Day 1:

  1. Technical Visit at Blanket Mine
  2. Registration at Holiday Inn
  3. AMMZ SHE Awards – Cocktail Evening

Day 2:

  1. Conference and Presentations
  2. AMMZ AGM – Closed Door
  3. President’s Dinner

Day 3:

  1. Golf at BCC
  2. Evening Dinner at BCC

ZITF Introduces Supplier-Buyer Interactions at Mine Entra 2024

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ZITF Introduces Supplier-Buyer Interactions at Mine Entra 2024

The Zimbabwe International Trade Fair (ZITF) is taking significant steps to foster direct engagement between mining service providers and procurement managers by introducing dedicated interaction hours at this year’s Mine Entra, scheduled for October 9-11, 2024, at the Zimbabwe International Exhibition Centre in Bulawayo.

By Rudairo Mapuranga

Mine Entra’s Buyers’ Programme is a new initiative designed to create a streamlined connection between suppliers and key decision-makers from various mining companies.

According to ZITF CEO Dr Nick Ndebele, the initiative is a game-changer for the mining industry, particularly in how it brings buyers and sellers together in one space.

“In the past, suppliers typically had to visit buyers at their workplaces, but this year, we are reversing the process. We are bringing procurement managers and other decision-makers to the suppliers. This initiative ensures that key stakeholders in the mining industry can meet face-to-face, greatly enhancing the chances of forming meaningful business partnerships,” Dr Ndebele said.

The Buyers’ Programme will feature pre-scheduled meetings that suppliers can arrange through a digital platform, ensuring they connect with buyers most relevant to their products or services. Additionally, the event will include speed networking sessions, where suppliers and buyers can briefly introduce themselves and their offerings, potentially leading to more in-depth discussions later.

Dr Ndebele emphasized that direct access to procurement managers and mine officials is crucial for suppliers aiming to grow their businesses.

“This programme is about more than just networking; it’s about creating real opportunities for suppliers to meet those who have the power to make purchasing decisions. We believe this will lead to significant business growth and stronger industry relationships,” he added.

By hosting high-profile procurement officials at Mine Entra, ZITF is ensuring that suppliers have a chance to pitch their services to key industry players conveniently and efficiently. This initiative is set to strengthen Zimbabwe’s mining value chain and contribute to the growth and industrialization of the country’s mining sector.

Mine Entra 2024 is expected to attract over 250 exhibitors, including international participants, offering a unique opportunity for local and global businesses to showcase their innovations in mining technology and services.

US$14M Legal Battle Poses Challenges for Makomo Amid Corporate Rescue Efforts

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US$14M Legal Battle Poses Challenges for Makomo Amid Corporate Rescue Efforts

Just over a year since resuming operations, Makomo Resources finds itself embroiled in a US$14 million legal dispute with Barak Fund SPC Limited, which claims Makomo owes this amount following its entry into corporate rescue in 2021.

By Ryan Chigoche

Makomo, once Zimbabwe’s largest coal miner, resumed operations last year after securing a contractor. It currently supplies coal to the Zimbabwe Power Company, positioning itself to regain prominence in the US$12 billion mining industry. However, if Barak Fund’s lawsuit is successful, it could significantly impact the company’s recovery efforts.

The lawsuit alleges that Grant Thornton, the corporate rescue practitioner, failed to conduct a forensic investigation mandated by the court, resulting in a US$13.5 million loss for Barak. Although US$2.8 million has been paid to other creditors, Barak’s claim remains “contingent,” preventing payment. Makomo’s legal team denies these accusations, asserting that the corporate rescue practitioners followed statutory requirements and that Barak’s request to remove Grant Thornton lacks legal merit.

Potential Impacts on Makomo Resources:

If the court rules in favour of Barak, the financial strain on Makomo could be severe, diverting funds away from operations, maintenance, and workforce management—crucial elements during the corporate rescue. The company’s ability to manage existing debts could be compromised, hindering recovery efforts.

The legal costs and financial liabilities may delay important projects and expansion plans, while the lawsuit itself poses reputational risks. Negative perceptions could harm relationships with stakeholders, customers, and potential investors, and might deter new investments critical for the company’s recovery.

Moreover, the legal scrutiny may force Makomo to adjust its operations, leading to increased costs. The focus on legal matters could detract senior management from pursuing long-term goals, and employee morale may suffer due to the ongoing uncertainty.

Additionally, any operational disruptions caused by the lawsuit could affect Makomo’s coal supply to key customers, jeopardizing relationships and impacting pricing strategies.

As the legal battle continues, the outcome will have significant implications for Makomo’s future and its corporate rescue efforts. Meanwhile, the company remains Zimbabwe’s largest privately-owned coal producer, with substantial supply to the country’s power stations and other sectors.

In 2013, Makomo became Zimbabwe’s leading thermal coal producer, surpassing Hwange Colliery Company. It operates on its 7,000-hectare Entuba coalfields in Hwange, with a life span of 30 years and resources for underground operations for over 100 years. Makomo is 60% owned by a group of six indigenous businesspeople, with the remaining shares held by foreign investors.

Junior Chamber Attracts Investors

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Junior Chamber Attracts Investors

Investment promotion and protection company Taplane Business Solutions Centre is looking to partner with the Junior Chamber of Mines of Zimbabwe (JCMZ) to support small to medium miners in professionalizing their operations to world-class standards and securing funding, Mining Zimbabwe reports.

By Rudairo Mapuranga

Speaking to Mining Zimbabwe, Taplane CEO Alain Diffo said his company has identified significant challenges related to the capitalization of most mines due to difficulties in finding the right partners.

He stated that Taplane is bringing the right investment partners and is looking to JCMZ to organize small to medium-scale mines to elevate them into large-scale operations.

“We are very interested in mining, which is why we are here at the Junior Chamber of Mines. There are significant challenges related to the capitalization of most mines, and we often struggle to find the right partners in countries that can demonstrate their resources backed by financial arrangements. We have access to those arrangements and are looking to the Junior Chamber of Mines to organize small to medium-sized mines, as we aim to elevate them to large-scale operations,” he said.

He added that miners intending to partner with Taplane should have business plans outlining the growth ambitions of their mines.

“For instance, if we find individuals in need of capital, we would require a business plan that outlines the mine’s lifespan. Based on that information, we can pursue foreign direct investment. We hope that Zimbabwe will embrace the opportunities with Taplane Business Centre, as we have established strong relationships with various international organizations that are often hesitant to invest in countries like Zimbabwe due to uncertainty. Our task now is to create a platform that brings Zimbabwean businesses together, showcasing their capacities and selecting a few that can receive sponsorship,” he said.

The government, through its “open for business” mantra, has been encouraging international investors to invest in the country’s mining sector as part of its efforts to contribute significantly to achieving an upper-middle-income economy by 2030.

Zimbabwe’s mining sector has witnessed a surge in investment over the past three years, with several companies investing heavily in exploration, expansion, and plant construction.

A survey by the Chamber of Mines of Zimbabwe (CoMZ), based on insights from mining executives, showed that substantial investments have been made in lithium, gold, Platinum Group Metals (PGMs), and ferrochrome companies.

The mining sector is a major contributor to the economy, accounting for 13 per cent of the gross domestic product and employing over 50,000 people. The sector also generates more than 70 per cent of the country’s exports.

Zimasco Wins US$10 Million Legal Battle Against Zimra

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Zimasco Wins US$10 Million Legal Battle Against Zimra

In a landmark ruling, Zimasco has emerged victorious in a legal battle against the Zimbabwe Revenue Authority (Zimra), securing a judgment that absolves the company from paying US$10 million in royalties. This decision follows an extensive examination of Zimasco’s tax affairs, particularly concerning the calculation of royalties from 2019 to 2022.

By Ryan Chigoche

The dispute began when Zimra claimed that Zimasco had miscalculated royalties by basing its calculations on an ex-works value that excluded distribution costs. This review was formally communicated in a letter dated December 8, 2022, focusing on the period from January 1, 2019, to September 30, 2022. In response, the High Court ruled in favour of Zimasco, granting the application with costs and marking a significant win for the company.

The court’s ruling included several key orders. It declared that chrome ore concentrates and ferrochrome are classified as mineral-bearing products, meaning that no mining royalties were payable on their disposal during the specified period. Additionally, the court set aside Zimra’s claims issued on March 24, 2023, which sought to recover ZWL881,544,511.00 and USD10,523,347.00 in alleged shortfalls of mining royalties. Furthermore, Zimra was ordered to refund ZWL389,606,502.95 and USD2,485,183.83, along with any additional amounts previously paid by Zimasco regarding these disputed royalties.

Zimasco argued that no royalties applied to mineral-bearing products before the Finance Act 7 of 2021, emphasizing that the legislation did not impose such obligations until it was amended. They contended that chromite ore concentrates and ferrochrome should be classified as mineral-bearing products, which are not subject to royalties. The company highlighted the legislative distinctions between raw minerals and processed products, reinforcing their position. Citing recent developments regarding platinum group metals, Zimasco asserted that there were no defined royalty rates for mineral-bearing products before January 1, 2022. They maintained that this legislative gap supported their claim that royalties were not due during the disputed period. Furthermore, Zimasco emphasized the need for a reasonable interpretation of tax laws, arguing that imposing royalties retroactively would create uncertainty and undermine investor confidence in the mining sector.

In contrast, Zimra contended that royalties should be calculated based on the market value of the minerals sold. They argued that Zimasco’s method of calculating royalties was flawed, as it involved deducting distribution and other costs from the gross selling price, a practice Zimra asserted was not permissible under the existing tax framework. Zimra maintained that ferrochrome is a mineral-bearing product and thus liable for royalties under the applicable laws. They argued that regardless of how Zimasco categorized its products, the regulatory framework clearly stipulated that royalties apply to all mineral-bearing outputs. Zimra also emphasized the importance of protecting public revenue interests, suggesting that allowing Zimasco to evade royalties would set a troubling precedent for the mining industry, undermining the revenue base necessary for national development.

In analyzing the arguments presented, the Honourable Justice Musithu reinforced the distinction between minerals and mineral-bearing products, asserting that the legislative framework supported Zimasco’s interpretation. The ruling emphasized the importance of clear definitions within tax law, concluding that the current legal framework did not impose royalty obligations on mineral-bearing products prior to the specified date. Additionally, the judge considered the intent of the Finance Act, concluding that the absence of specific royalty rates for mineral-bearing products before 2021 bolstered Zimasco’s claims. The ruling noted that legislative changes often require clarity to avoid ambiguity in tax obligations. This case sets a significant precedent for future disputes regarding the calculation of mining royalties in Zimbabwe.

Zimasco’s victory not only alleviates a substantial financial burden but also clarifies the legislative framework surrounding the calculation of mining royalties in Zimbabwe. The court’s ruling reinforces the ongoing complexities in the interpretation of tax laws within the mining sector, emphasizing the importance of clear definitions and compliance in royalty calculations. This case serves as a critical reference point for similar disputes, highlighting the need for miners and tax authorities to navigate these issues with greater clarity and adherence to the law. The ruling ultimately underscores the necessity of stability and predictability in the interpretation of tax laws, which are crucial for attracting foreign investment in Zimbabwe’s mining industry.

Ministry of Mines Receives a Vehicle to Enhance Mine Safety

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Ministry of Mines Receives a Vehicle to Enhance Mine Safety

The Ministry of Mines and Mining Development has received a vehicle from the International Labour Organization (ILO) and the African Development Bank (AfDB), a gesture aimed at improving the safety of artisanal miners in their operations, the ILO reported.

By Patricia Rwafa

The vehicle was presented to Minister Winston Chitando at the Ministry’s offices in Harare.

The white Jeep is expected to improve the livelihoods of artisanal miners by providing reliable transportation for equipment and materials to and from mining sites.

Speaking at a press conference in Harare on Wednesday, ILO Director Philile Masuku emphasized the significance of the vehicle for both artisanal miners and the organization.

“Gemstone mining in Hurungwe and Karoi has greatly enhanced the ministry’s capacity to assist artisanal miners in improving their work and livelihoods.

“We’re excited to continue working with the ministry to promote safe, sustainable, and profitable artisanal mining in Zimbabwe. Over 200 artisanal miners will receive training from the ILO on how to make their work safer.”

Masuku added, “The ILO is also assisting the ministry in developing key policies and strategies for Zimbabwe’s mining sector, such as the Minerals Development Policy and the Artisanal Small-Scale Miner Strategy.”

“We are grateful for the leadership and commitment of everyone involved. We would like to thank the AfDB for their generous support, the government of Zimbabwe for its strong partnership, and all the stakeholders who are working to improve the lives of artisanal miners and their communities,” she said.

At the ceremony, Minister Chitando expressed his hope that the organization would explore additional areas of partnership to create jobs, especially for women and young people within the sector.

“This vehicle is a step towards formalizing the sector and empowering our communities, particularly women and youth.

“We are partners in the National Vision to achieve an Upper-Middle-Income Economy by 2030 and in the President’s mantra of leaving no one and no place behind.

“We look forward to your continued support in identifying other areas where jobs, particularly for women and youth, can be created.”

The International Labour Organization is dedicated to promoting social justice and internationally recognized human and labour rights, staying true to its founding mission that labour peace is essential to prosperity.

Miners Accept ZESA Prepaid Plan, Concerned About Economic Tariff

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Miners Accept ZESA Prepaid Plan, Concerned About Economic Tariff

The Chamber of Mines of Zimbabwe (CoMZ), representing large-scale miners, has indicated that miners are prepared to adopt the Zimbabwe Electricity Supply Authority’s (ZESA) prepaid electricity system. However, their primary concern is whether ZESA can offer a reliable and affordable electricity supply, reports Mining Zimbabwe.

By Rudairo Mapuranga

Speaking to Mining Zimbabwe, Chamber of Mines of Zimbabwe CEO, Isaac Kwesu, stated that many miners have already been using prepaid power. The main issue is securing power at an economical tariff, not the switch itself.

He explained that discussions between the Chamber and ZESA aim to ensure a smooth transition from postpaid to prepaid, addressing potential concerns such as cost and cash flow.

“It’s not new that ZESA is introducing prepaid metering. Many of our mines are already on that platform. The main concern is securing power at an economical tariff. We are working to ensure a smooth transition without creating issues around cost and cash flow, including addressing deposits and prepayment timelines,” Kwesu said.

ZESA recently announced that all medium and large commercial, industrial, tourism, and mining customers still using postpaid billing must switch to prepaid by October 1, 2024. The utility expects this shift to help address the Zimbabwe Electricity Transmission and Distribution Company’s debt of over ZWG$ 5.7 billion, with the industry and mining sectors contributing significantly to the debt.

Due to this debt, ZESA has struggled to import power, further exacerbating Zimbabwe’s energy challenges, worsened by low water levels at Kariba Dam and limited output from the country’s thermal stations. ZESA believes the prepayment system will improve customer energy management and service delivery.

Blanket Mine Records a Fatality

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Blanket Mine Records a Fatality

A fatal incident at Blanket Mine claimed the life of an underground employee, Mining Zimbabwe can report.

By Rudairo Mapuranga

On Saturday, an employee was tragically killed by a falling rock while drilling in a development area. The company stated that the individual died instantly from the impact.

“It is with regret that Caledonia Mining Corporation Plc reports that an accident occurred at the Blanket Mine, where an employee was fatally injured due to a fall of rock while drilling. Management is assisting the relevant authorities in their inquiry into this accident. Caledonia extends its condolences to the family and colleagues of the deceased,” the company noted in a press release.

This incident marks the first fatality at Blanket Mine since August of the previous year, when an employee from GMG Mining Machines, a specialist in trackless mining machinery, succumbed to injuries sustained during maintenance.

In 2022, Blanket Mine had recorded over 2.4 million fatality-free shifts since 2018, showcasing the mine’s dedication to the safety and health of its workforce.

“Safety is our first priority at Caledonia, and we are committed to continual improvement in safety performance to achieve a zero-harm working environment for all our employees and contractors. We work diligently to foster a strong safety culture at Blanket Mine, supported by our policies, systems, and regular safety training. Our commitment is further demonstrated through safety targets that qualify for our employee bonus scheme,” the company emphasized.

Official statistics indicate that the mining sector experienced 37 incidents resulting in 33 fatalities and 27 serious injuries in the first two months of 2024. Of these fatalities, 15 were attributed to fall-of-ground incidents, while others stemmed from shaft accidents, sundry incidents, and various other causes, highlighting ongoing safety challenges in the industry.

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