Mining ZimbabweLatest Mining News, Policy and Industry Updates

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.

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.

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.

The Zimbabwe Environmental Law Association (ZELA) has urged authorities to take decisive action against small-scale artisanal miners accessing disused underground shafts, which are encroaching on local communities.

By Ryan Chigoche

The illegal gold mining crisis in Zimbabwe has escalated into a multifaceted issue, posing serious threats to the environment, public safety, and the socio-economic stability of the nation. As individuals resort to illicit mining due to pervasive poverty and unemployment, the repercussions extend beyond the mines, impacting communities, ecosystems, and the economy at large.

An incident at Globe and Phoenix Primary School in Kwekwe, where a classroom block collapsed last year, starkly illustrates the dangers of irresponsible mining practices. This tragedy serves as a reminder that such activities must be curtailed. Reports indicate that a similar situation is developing in Mazowe, where mining activities are increasingly encroaching on human settlements.

Batanai Mutasa, ZELA’s communications officer, emphasized the need for stricter penalties to deter illegal mining, including a ban on mining disused underground shafts of old, no longer operational mines.

“Illegal miners must be actively blocked from using disused underground shafts. The Mines and Minerals Act should incorporate harsher penalties for those who continue illegal activities despite efforts to promote compliance and environmental protection. The government must enforce legal frameworks by enhancing collaboration among state and non-state institutions. The Ministry of Mines and EMA should work with local authorities and traditional leaders to monitor mining activities, even in resource-limited settings,” Mutasa stated.

In line with this, ZELA is actively promoting responsible and sustainable mining practices by advocating for stricter regulations to monitor the environmental and structural impacts of small-scale mining operations. The organization has analyzed the Mines and Minerals Act and key regional and international frameworks, highlighting both advancements and gaps in the proposed Mines and Minerals Amendment Bill, while offering recommendations for improvement.

ZELA is also implementing programs to equip artisanal and small-scale miners (ASMers) with essential knowledge in Safety, Health, and Environment (SHE), along with Disaster Risk Rescue skills. The organization encourages ASMers to regularize their operations and adhere to mining regulations. Furthermore, ZELA addresses children’s rights within mining contexts, providing crucial insights into the vulnerabilities faced by children in mining communities.

As part of Zimbabwe’s macroeconomic roadmap to achieve upper-middle-income status by 2030, the government unveiled plans in October 2019 to revitalize the mining sector and create a $12 billion economy by the end of 2023, with the latest figures from 2022 estimating its value at around $5.6 billion. This initiative focuses primarily on gold mining, Zimbabwe’s largest export, alongside platinum, diamonds, chrome, iron ore, coal, lithium, and other minerals.

However, the environmental toll of illegal gold mining is staggering. Unregulated operations lead to widespread deforestation, soil erosion, and the contamination of water sources with toxic substances such as mercury.