Mining ZimbabweLatest Mining News, Policy and Industry Updates

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.

Victoria Falls Stock Exchange-listed gold-focused miner, Caledonia Mining Corporation, will soon file a preliminary economic assessment (PEA) showing that Bilboes can triple Caledonia’s production to over two hundred thousand ounces.

According to Caledonia’s CEO, Mark Learmonth, despite inflationary pressures, the PEA confirms Bilboes as a high-quality asset with the potential to nearly triple Caledonia’s production to over 200,000 ounces annually, alongside Blanket Mine.

He said the $309 million project will be partly debt-funded, and Caledonia plans to re-engage with debt providers to support the new feasibility study.

“The Board’s decision to proceed with the single-phase development option for Bilboes represents a key strategic milestone in our journey to becoming a multi-asset, mid-tier gold producer.

“Notwithstanding the general inflationary increase in operating costs and capital costs over recent years, the PEA re-confirms that Bilboes is a high-quality mid-scale asset that can generate attractive economic returns. The PEA also confirms that Bilboes has an attractive production profile with the potential to almost triple Caledonia’s production capacity to over 200,000 ounces per annum in combination with production from Blanket Mine.

“The peak funding requirement for the project is expected to be approximately $309 million, with a sizable proportion funded through debt. The company and, in the past, Bilboes’ previous owners, have had highly positive engagements with prospective debt providers, and we now propose to re-engage with these providers in parallel with the process of preparing the new feasibility study. To date, 2024 production at Blanket has been robust, and the company remains well-positioned to deliver returns to shareholders while expanding our asset portfolio and growing our production profile.

“I am very excited by the opportunity we have to evolve our business, which we believe will generate significant long-term shareholder value,” Learmonth said.

The publication of the PEA follows the company’s decision to advance the project to the execution stage in a single-phase development instead of multiple phases.

This decision was made after evaluating different development options, revealing that the single-phase approach is expected to yield superior returns. Single-phase development is expected to provide improved cash generation, allowing for a lower cost of capital due to enhanced debt financing capacity compared to phased development alternatives.

The project is expected to yield approximately 1.5 million ounces of gold (based on measured and indicated mineral resources) over an initial 10-year life of mine at an all-in-sustaining cost of $968 per ounce. The payback period is expected to be 1.9 years at a gold price of $1,884 per ounce.

A new single-phase feasibility study (the “New Feasibility Study”) is expected to be delivered during the first half of 2025. Funding solutions are being progressed in tandem with work on the New Feasibility Study.

According to Learmonth, the company incorporated several material revisions to the original single-phase development plan (as set out in the Former Feasibility Study), which include:

– Revised designs for the TSF to incorporate a modular construction approach and reduce upfront capital.
– Revised pit designs to reduce upfront capital.
– A review of the cost of the process plant and infrastructure, particularly sourcing major equipment and steelwork from alternative suppliers to reduce costs.
– Reassessing the phasing of the mine village establishment.
– A review of the operating expenses and general and administrative expenses with the availability of shared resources now that the project is part of the Caledonia group.

The country’s largest Platinum Group Metal (PGM) producer, Zimplats, has used US$1.3 billion of its US$1.8 billion budgeted expansion program launched in 2020 and now focuses on reducing operating costs while improving production.

by Rudairo Mapuranga

PGM metal prices have declined significantly, in some cases by more than 50%, threatening the financial viability and sustainability of business operations for most PGM producers.

Speaking at the Chamber of Mines Annual General Meeting and Conference held at Elephant Hills Hotel in Victoria Falls last week, company CEO Alex Mhembere said Zimplats has shielded its US$1.8 billion expansion plan in response to the sharp decline in PGM pricing. Zimplats is implementing stringent cost-preservation measures to protect the business from the enormous pressure on profitability and cash flow and preserve, as much as possible, the jobs of more than 8,000 people employed by the company (both permanent and contract).

Under its US$1.8 billion capital expenditure investment, Zimplats’ strategy involves setting up integrated projects, including the development of new mines, expansion of the smelter, construction of an additional concentrator, a base metal refinery, a sulphuric acid plant, and the establishment of a 110-megawatt solar power plant.

Mhembere also said that his company was implementing high-technology mining to improve operational efficiency.

“We have been implementing a number of measures, including labour rationalization. We considered the issue of transference and offered our employees the opportunity to engage in volunteer activities, but there was very little uptake. Consequently, we implemented a different model. Out of our 8,000 employees, only 61 participated, and we have been able to retain them. We believe this is a strategic advantage, as it allows us to maintain our labor strength and be ready when the market recovers.

“Our focus is on improving productivity. We aim to be on the left side of the cost curve, which enables us to continue our work efficiently. This has been our strategic position and remains so. We are rationalizing our cash expenditure. The major growth project announced in November 2020, worth $1.8 billion, has been implemented. We have spent $1.3 billion of that amount and will rationalize the remaining $500 million over the next two to three years by delaying some projects. However, we have completed most of the projects, enhancing our capacity to manage efficiencies better.

“We are also implementing high technology in mining. For depleted mines, we are now using pillar reclamation and remote mining methods. Additionally, we are introducing high-tech mining in our new developments to reduce costs. We have fibre optics underground and our own license to run the technology. Our mining operations are visible from here and from everywhere, which helps improve productivity,” stated Mhembere.

Mimosa Mining Company has entered into an agreement with the country’s largest platinum group metal (PGM) producer, Zimplats, to use the latter’s Base Metal Refinery (BMR) to ensure the country maximizes benefits from PGMs.

by Rudairo Mapuranga

According to Mimosa Mining Company General Manager Stephen Ndiyamba, the company is unable to set up its own processing facility due to a limited resource base.

Zimplats is currently constructing the BMR, which has the capacity to toll process ores from other PGM producers.

“Regarding beneficiation, Mimosa is unable to set up its own facility due to a limited resource base. However, we can utilize local beneficiation facilities as they become available. Zimplats is currently constructing a facility that can accommodate feed from Mimosa, and an agreement is in place for this arrangement,” stated Ndiyamba.

However, it should be noted that Zimplats has deferred its BMR refurbishment.

The country’s largest PGM producer is postponing the execution of the Selous Base Metal Refinery (BMR).

According to Impala Platinum (Implats), which owns Zimplats, Zimbabwe’s largest PGM producer will also delay other projects in the country, including the 185MW solar plant, due to softening commodity prices which has seen some workers losing their jobs.