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Zulu lithium project drilling results impressive

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Zulu lithium project drilling results impressive

London Stock Exchange listed mining and exploration junior Premier African Minerals’ Zulu lithium project located in the Fort Rixon Greenstone Belt on Monday received impressive assay results indicating that the project has the potential to become one of the country’s leading mining projects.

Rudairo Mapuranga

Recently according to Premier African Miners CEO George Roach, the Zulu Lithium and Tantalum project is close to becoming a World Class Mine which investors will be talking about having missed the chance to buy in early.

Recently Roach and Pei Zhenhua, the chairman of Suzhou TA&A Ultra Clean Technology Company visited the project to have firsthand information on the project’s growth strategy. Last year, Premier secured US$35 million in pre-funding from Suzhou TA&A Ultra Clean Technology Company to enable the construction and commissioning of a large-scale pilot plant. The project is developing at a rapid pace.

Commenting on the results received Roach said: “The assay results reported on today continue to demonstrate good lithium values over significant widths that are all supportive of the quality of the mineralised pegmatites we intend to mine in the first phases of the pilot plant operations.

“We are into the home stretch with pilot plant construction and site activity is frenetic with multiple work streams all targeting the same near-term completion date. Pre-strip has commenced in the initial pit area to be developed. Activity in the pilot plant assembly areas is now on a 24/7 basis. In the absence of any unforeseen issues, I expect that the first shipments of SC6 will commence in Q1 as projected.

“We still have a significant backlog of assay results and continue to develop a mining model for the pilot plant that is expected to deliver a run of mine material from pegmatites that are dominated by spodumene. Whilst I am not in a position to provide direct guidance yet, it should be noted that the design capacity on the floatation circuit anticipates a mass pull of up to 30% at a design feed rate of 40 tons per hour of milled material. This represents a potential 12 tons per hour of spodumene-rich concentrate. Until the plant operates, it is not possible to accurately predict either the feed grade of spodumene-rich material reaching the floatation circuit, nor to predict the final concentrate grade or final tonnage production rate. That is the nature of a pilot plant. I will provide further updates over the coming weeks.

“I would like to take this opportunity to thank the Chairman of Suzhou TA&A, Mr Pei Zenzhue, for visiting Zulu in January 2023 and expressing his satisfaction with the progress we are making. We look forward to an exciting year”.

Lithium export restrictions create downstream opportunities

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Lithium export restrictions create downstream opportunities

The decision by the government of Zimbabwe to ban the export of unprocessed Lithium ore has opened up opportunities for both foreign and local investors as a whole industrial business scope will be opened as a direct result of the ban.

Rudairo Mapuranga

The country has been losing millions of dollars through raw lithium exports with President Emmerson Mnangagwa dissatisfied with the way the lithium sector has been operating.

This led to the government imposing a ban on the export of raw lithium through section 3 (1) (a) of the Base Minerals Export Control Act [Chapter 21:05] to ensure that the vision of the President to see the country becoming an upper-middle income economy has been realized.

The President said if the country was to achieve its vision to become an upper-middle-income economy by 2030, greater effort was supposed to be made to ensure that the export of raw minerals and concentrates has been banned.

“In line with Vision 2030, greater efforts should be made towards value addition and beneficiation of minerals. We cannot as a country continue to export primary products including concentrates and ores. Recently in Mberengwa, we discovered that there was a mountain with nothing but lithium and our people were collecting this lithium ore and being paid something like US$100 when that same quantity will fetch more than a thousand to US$2000 and then exporting it unprocessed so Zimbabwe loses,” HE Mnangagwa said at the time.

According to Mineral Economic Expert Lyman Mlambo, the ban will produce downstream opportunities for citizens and foreign investors. He said those who have not been partaking in the mining industry will help the country achieve the US$12 billion annual revenue by end of this year.

“There are downstream business (investment) opportunities opened up for both local and foreign investors. There is money (profits) to be made downstream, given the large reserves of lithium we have will ensure adequate feed going into the future. Firstly, beneficiation itself to produce petalite concentrate and lithium carbonate is a business that could be undertaken separately from mining or together with mining (including toll processing as we have in the Chrome sector, where we have at least 22 smelters). Then we have purely industrial processes to produce the various lithium components that go into the lithium batteries (lithium electrodes and electrolytes) as well as the manufacturing of the lithium-based EV batteries themselves. This is a whole industrial business scope opened up. Lithium miners that decide to venture into these opportunities will find their business portfolio immediately diversified and strengthened through vertical integration forward. Non-miners who, in the first instance venture into beneficiation and manufacturing business may find it more profitable to vertically integrate backwards by procuring mines of their own to guarantee a less costly supply of feed,” Mlambo said.

However, Zimbabwe Institute of Foundries (ZIF) President Itai Zaba said while the ban will come with so many opportunities, it should be accompanied by a deliberate policy of retooling the foundry sector.

He said a straightforward ban can frustrate the growth and development of the mining industry.

“The banning of raw minerals must be accompanied by a deliberate policy of retooling and capitalisation of the foundries, for the ban to be a viable intervention. Foundries and smelting entities will be able to beneficiate these minerals if there is a facility that avails capital for the modernisation of their plants as well as backward integration connecting with the mining value chain. A straightforward ban without such development provisions will take a long time to have spillover effects in the foundry industry. On its own, it will be an invitation to foreign investors to come and set base in Zimbabwe in our stead. Then the long-term indirect benefits will be the in the form of inputs, such as ferroalloys, for the foundries which be availed from the beneficiation of the minerals by the newcomers, quite an indirect benefit,” Zaba said.

Ten advantages of government getting royalties in the form of minerals

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Ten advantages of government getting royalties in the form of minerals

The Government of Zimbabwe has recently gazetted that half of the mineral royalties for gold, diamonds, platinum group metals (PGMs) and lithium will be paid in the commodities themselves and the remaining half paid in cash split between 40% Zimbabwe Dollars and 10% foreign currency.

by Lyman Mlambo, Private Consultant (Mineral Economics & Policy)

Royalty payments for the rest of the minerals will be split 50:50 between Zimbabwe Dollars and foreign currency.  This article highlights ten advantages of the Government receiving royalties in the form of the products themselves:

  1. Stable royalty receipts: The move, which essentially introduces a partial unit-based royalty model, ensures that the Government receives stable and certain value from mineral production, as argued by a 2006 World Bank Report on “Mining Royalties (A Global Study of Their Impact on Investors, Government, and Civil Society)” co-authored by Otto, J and others, and published in Directions in Development (Energy and Mining) Journal. This is because production-based royalties are not affected directly by international mineral commodity price fluctuations.

 

2. Development of the local jewellery industry: If the Government has significant reserves of gold, PGMs and diamonds it can craft a clear strategy to develop the country’s jewellery industry as all three minerals are used in this industry. This would be in sync with the beneficiation and value-addition thrust of the country. The jewellery industry is a highly lucrative industry, with 70% of gold produced globally going into this industry as reported by this author in a 2012 article on the price dynamics of the world gold market published by the Chinese Business Review-Journal.

3. Green energy transition and industrialization: Building reserves of lithium, especially for a country that is so greatly endowed with the mineral, is foundational to the development and strengthening of the local lithium value chain including the production of petalite concentrate, lithium carbonate, lithium-ion batteries and eventually the electric vehicles (EVs) themselves. This will aid the green transition thrust in the country. The strengthening of local value chains for the other minerals specified will also spur industrialization as these minerals, besides their application in jewellery industry, have many industrial applications in automotive, computing, electronics, dentistry, chemical industry catalysts and heavy underground works (such as drilling).

4. Gold as an investment asset: Gold is the main competitor to hard currency, especially the USD, as a store of value as indicated in the 2012 report alluded to above. With Zimbabwe using USD as a currency, the country is exposed to the risks associated with US economic (especially exchange rate) and political volatilities, and having a big reserve of a safe haven such as gold is a big buffer for such risks. Gold is also a better store of value than purely monetary assets because its value is not fiduciary, but intrinsic (since it is useful as a commodity in itself) as compared to say, bonds, securities, equities and legal tender (paper money).

5. Gold coins and macroeconomic stabilization: Closely related to, albeit subtly different from, the above point, is the fact that Zimbabwe has embarked on the use of gold coins as a store of wealth for individuals and companies in the country. Getting royalties in the form of gold itself automatically supplies the Government with the raw materials it needs to produce the gold coins in greater numbers than it is currently doing. Thus, it will be possible to broaden the benefits of this policy to a greater percentage of the population when the Government receives raw gold from a source where there is no direct competition with the export market. Gold coins have become an important macroeconomic stabilization tool as they mop up excess liquidity in the economy and exerts downward pressure on inflation.

6. Broadening of gold trading options for Government: With the Government as an independent holder and exporter of gold given that the Fidelity Gold Refinery is a partially privatized entity, it can choose various appropriate ways of trading its gold without the pressure of private shareholders. It will have the liberty to engage in spot trading, forwards contracts, futures contracts, options, or hedging (against unfavourable price movements).

7. Reduced transaction costs: This policy avoids the cost which would be associated with the sale of the four mineral commodities (the half that now constitutes royalty) and the various processes involved in the payment and collection of royalties in monetary form. Basically, it reduces transaction costs both for government and mining companies associated with the processing of royalty payments, which, if gross value-based would include exporting the minerals first.

8. International loan repayments: The International Monetary Fund indicates on its website that it may accept gold in loan repayments by member countries, though it will be evaluated at prevailing prices in the market (“Gold and IMF”, https://www.imf.org/…, retrieved on 10 November 2022). This to some extent could simplify the repayment process for Zimbabwe if the country manages to build a big reserve of gold from product royalties as it avoids many transaction costs related to money-based royalties.

9. Education and training: These mineral reserves can be used as samples in the promotion of minerals-related education and training, which is a component of one of the eight principles underpinning the Zimbabwe Artisanal and Small-Scale Gold Mining Strategy 2022-2025 as indicated in the October 2021 draft.

10. Production Sharing Model: Receiving royalties in minerals already sets the stage for the implementation of Production Sharing Agreements (PSA) in the oil and gas sectors which could be considered as a viable option in those sectors in future, as is the case in many other oil and gas producing countries.

Zim women hailed for successful mining operations

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Zim women hailed for successful mining operations

Women in Mining in Zimbabwe have been hailed for successfully operating and managing big mining projects contributing to the success of the mining industry in Zimbabwe.

Rudairo Mapuranga

Speaking at the Women Mining Pitso in Botswana which ran under the theme, “Empowerment of women in mining towards sustainable development” Zimbabwe Association of Women in Mining Associations (ZAWIMA) Secretary General Sophia Takuva said women in mining in Zimbabwe have grabbed opportunities in the mining sector and running operations successfully.

She said in the artisanal and small-scale mining sectors, women in Zimbabwe have created two successful projects which are now being operated at an excellent level.

Women in Mining PITSO“In Zimbabwe women have shown their capabilities by successfully operating and managing big mining projects. We have 2 successful projects for women in small-scale mining supported by the ministry of women’s affairs. The first project Mthandazo Women Miners Association was established in 2014 in the Matabeleland south province of Zimbabwe with support from UNDP. A total of 80 women miners from Matabeleland south benefitted from the project and it has been running for 9 years. The project gave birth to many women from Matabeleland venturing into the mining value chain. We now have more than 2000 ASM miners, chemical suppliers and young experts in the mining industry who come to be because of this project.

“A total of 200 women were supported with US$500 000 from the African Development Bank for the construction of a Gold Milling Centre in Guruve. The centre is an effective women empowerment initiative that will provide gold milling services to small-scale miners in Guruve. The project is part of the Government’s thrust towards an organised informal sector and its formalisation. Increase in foreign currency generation, employment creation and promotion of rural industrialization are some of the benefits of this program,” Takuva said in part.

“Zimbabwe has inclusive policies, laws and governance structures which give women opportunities to lead and venture into the mining industry. We have women in decision-making positions in the mining industry, the ministry of mines, women in managerial positions in mining companies, and also women who own small-scale mines. All these women have successfully built a legacy, a path that has helped other women to venture into the mining sector and to pursue mining career education/paths,” Takuva concluded.

Gold buying prices Friday 27 January 2023

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Gold buying prices Friday 27 January 2023

Fidelity Gold Refinery (FGR) official gold buying prices Friday 27 January 2023.

SG 90% AND ABOVE US$59.02/g
SG ABOVE 85% BUT BELOW 90% US$58.09/g
SG ABOVE 80% BUT BELOW 85% US$57.46/g
SG ABOVE 75% BUT BELOW 80% US$56.84/g
SAMPLE BELOW 10g BUT ABOVE 5g US$55.91/g
FIRE ASSAY CASH US$59.02/g

NB: Fire Assay cash price is for gold above 100gs and no sample is deducted.
For the Fire Assay Transfer price, a sample of not more than 10g is deducted
A 2% royalty is charged on all deposits (Small-scale Miners)
A 5% royalty is charged to Primary Producers

Cash available. Fidelity Gold Refinery prices will be changing daily in relation to world market prices.

ZRP concerned with the increase in ASM mine accidents

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ZRP concerned with the increase in ASM mine accidents

The Zimbabwe Republic Police (ZRP) has expressed concern over the increase in ASM mine accidents imploring the miners to take necessary measures to improve Occupational Safety, Health and Environment management.

Rudairo Mapuranga

In a statement, the police said it was concerned with increased accidents in ASM industry.

“The ZRP is concerned with increased incidents of mine accidents. Mine proprietors are implored to take necessary measures to improve occupational safety, health and environmental management.

“Police in Zvishavane are investigating a mine accident in which Tichaona Sithole (38) died on 24/01/23 at Altena 51 Mine. The victim fell on a rocky surface after slipping from a bucket which was being used to lower him down the mine shaft.

“Meanwhile, two artisanal miners, Anesi Tinotenda (24) and Jeremia Mutuda died after an underground mine shaft they were working on collapsed resulting in the victims being trapped at Juno K29 Mine, Chakari on 23/01/23,” ZRP said.

This has come days after the Environmental Management Agency (EMA) issued an order for one of the country’s big gold mines Redwing Mine to stop mining operations. The mine has been for the whole of 2022 operated by Better Brands Mining and other small-scale miners at an artisanal level. The mine has recorded a record of fatalities in 13 months, recording 21 deaths from January 2022 to January 2023 leading EMA to have no solution but order the mine to be closed so that it comes up with a strategy to create a solid SHE policy.

Lithium miners left with no market to sell their ores

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Lithium miners left with no market to sell their ores

While restrictions to export raw lithium are noble and beneficial towards the achievement of the upper middle-income economy, the sudden introduction of the law has left many miners struggling to get a decent market for the product.

Rudairo Mapuranga

The ban on raw lithium export would lead to job creation and transfer of skills to local experts thereby creating a green energy future for Zimbabwe leading the country to be considered one of the top countries in the energy revolution. However, the ban came at a time when proper structures were not in place leading many to lose out on the current world appetite for the commodity.

Speaking to this Publication miners in Mtoko have expressed concern on the government’s decision to ban suddenly the export of raw lithium as this has led to a market bankruptcy and exploitation of miners. Lithium ores of less than 2 per cent content are currently being bought at US$30 per tonne on the ground leaving miners bleeding as few buyers have been given a leeway to export.

“Buyers used to buy these ores at around US$150 which are rendered useless nowadays. We are now selling at US$30 per tonne because we are desperate for money. If we take them ourselves to Harare, no one will even want to buy them. The decision to ban the export of the raw mineral was good but it was done too early, it’s affecting us big time,” a miner said.

“We just hope the government can create a market for us, buyers have now turned into bloodsuckers, we may soon die. We support the decision to ban but we also want markets. The government after banning, should be creating markets for us,” said another.

Miner Elisha Murengwa said the decision to ban was of importance but more time should have been invested in creating future markets after the raw ban for miners who are not producing concentrates yet.

“First we need to establish the objective for such a decision by the government since it has been endorsed by the relevant Minister. From the official statement released thus far by the permanent secretary, it alludes to governments’ need to safeguard such key minerals as they form part of economic growth enablers due to their current and future high demand on the international market thus such minerals should be ring-fenced and measures put in place to protect them. Then there is mention of the need to promote value addition and mineral beneficiation which again is a very noble decision as this ensures employment creation through industry/processing plants that would be opened but very importantly it also means more taxes on export which in turn means additional revenue to our fiscus. So when one considers such a position government does feel justified in pronouncing such bans though going back to your question “is it within our legal framework” to impose such a ban overnight becomes another question. We have seen such similar moves by the government when they banned lithium and chrome exports in the past using similar statutory instruments. As far as we know there hasn’t been any litigation from anyone outside to challenge such moves in court and one wouldn’t expect this to be different however we cannot rule out such a court challenge. I cannot delve into finer details of the law as I’m not a legal expert but as miners, we are not happy with such a decision because it simply worsens the plight of miners who in some instances had done explorations and invested their hard-earned money,” he said.

The Minister of Mines and Mining Development Hon Winston Chitando through section 3 (1) (a) of the base Minerals Export Control Act banned the export of raw lithium ore.

Secure supply, efficiency needed for mining growth

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Secure supply, efficiency needed for mining growth

An important focus of this year’s Investing in African Mining Indaba will be on security and supply –and with good reason, according to Ralf Hennecke, Managing Director of Omnia Group company BME.

The pressure is building for the mining sector to re-set its production capability in the face of growing future demand – especially in those minerals critical to global decarbonisation trends. Not only will this require more exploration and mine development in the long term, but it will demand more predictability and efficiency across the value chain.

“The coming year will continue to bring challenges with regards to mining supply chains around the world,” said Hennecke.

“These obstacles have their origins in the economic lockdowns during the Covid-19 pandemic but have been compounded by the Russian invasion of Ukraine and the related disruptions.”

This has brought home the importance of secure supply chains in key inputs like explosives and blasting technology, on which mines rely to meet their daily output targets. PwC’s annual insight report SA Mine 2022 has also recently raised similar concerns about whether South Africa and other resource-rich countries will benefit fully from mineral demand growth. This will depend, argued PwC, on their ability to address bottlenecks in supply and mine-to-market infrastructure.

“As BME, we are always dealing with supply chain disruptions – caused by a range of factors from weak infrastructure to border efficiency,” he said.

“Our success in serving customers stems from ongoing investment in local infrastructure and skills, to strengthen local supply chains.”

Closer collaboration between mines and their supply partners was a key ingredient in building future stability in the sector, he asserted. Beyond supply chain issues, the pursuit of efficiency in mining remained a vital theme. This is because efficiency is directly relevant to energy saving efforts for decarbonisation, as well as for unlocking opportunities to gradually increase production levels.

“The digital age offers mining supply companies the ability to continuously develop our productive technologies,” he said.

“In our field – blasting and explosives – we have seen the significant impact that our technological development can have on mine safety and productivity, for instance.

”Hennecke highlighted that these efficiency improvements were important to the long-term sustainability of the sector – as they improved the commercial viability and longevity of every project. Greenfield projects to produce key commodities are scarce, he pointed out, and minerals like nickel, copper, cobalt and platinum group metals are likely to experience supply shortages if new projects are not initiated soon.

“It has become clear that more exploration – in battery minerals particularly – is going to be necessary to meet the needs of a lower carbon global economy,” he said.

“Being a high-risk endeavour, exploration needs optimal levels of confidence from the investment sector – so every efficiency gain will help.”

Zulu lithium to be a world class asset

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Zulu lithium to be a world asset

London Stock Exchange listed mining junior, Premier African Minerals‘ Zulu Lithium and Tantalum project is close to becoming a World Class Mine which investors will be talking about having missed the chance to buy in early.

Rudairo Mapuranga

Recently Premier’s Chief Executive Officer (CEO) George Roach and Pei Zhenhua, the chairman of Suzhou TA&A Ultra Clean Technology Company visited the project to have first-hand information on the project’s growth strategy.

Premier secured US$35 million in pre-funding from Suzhou TA&A Ultra Clean Technology company to enable the construction and commissioning of a large-scale pilot plant. The project is developing at a rapid pace.

According to Roach, the project is posed to become a World Class asset and it will be a game changer to the Zimbabwe Mining industry especially with lithium becoming one of the most sought-after minerals Worldwide.

“Premier is the investment everyone will be talking about having missed the chance to buy in early. We’re going to be a world-class asset, so looking forward to the continued growth and all the great things this will bring to Zimbabwe and local communities,” he said.

Mr Pei said that the team at the Zulu lithium project was working significantly to achieve a world-class asset.

“I have observed that the local Zulu Lithium team is very hardworking and I am quite impressed. Zimbabwe is a safe investment destination and I am confident that this lithium project will be a success.”

Mr Pei is even considering expanding his investment in the country by exploring other opportunities.

“If you want to deliver a successful product you must first become a good corporate citizen and contribute, not only to the product but to the local community. Our team here has conquered many challenges and I believe the standards set are very high,” said Mr Pei.

Globally, industry investment in battery production and its value chain is increasing. This, in turn, is driving demand for underlying battery raw materials, including lithium, whose demand has overtaken that of non-lithium batteries. Chinese investors have shown tremendous interest in the country’s lithium.

Zimbabwe is recognised as one of the most prospective countries in Africa for pegmatite-hosted lithium.

Lithium is increasingly becoming a key mineral worldwide with its demand surging for use in the ceramics industry, mobile phone manufacturing, and the making of automotive batteries.

Gold: US$2,000 per ounce is now in sight

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Gold: US$2,000 per ounce is now in sight

At the beginning of this week, the gold price was holding firm at just over US$1,920 per ounce. Already, one day in, it’s moved to above US$1,935 and may be set to go higher yet.

And, at just over £1,575 per ounce, the sterling price is also nudging at records, although there was a run-up towards current levels back in the spring of last year as the Russian invasion of Ukraine combined with chaos in UK domestic politics.

The flight to safe-haven assets is understandable. But there’s also a corresponding desire to build in some upside.

Which is why the more creative of UK investors haven’t just been buying physical gold or ETFs.

They’ve also been moving into equities.

The reasons are simple enough.

Most gold mining companies have cost bases which are reasonably fixed. Inflation can move things around a little bit, especially if companies are overly leveraged towards oil for their energy costs.

But in general, once the overall cost at which an ounce of gold is produced – the all-in-sustaining cost is established, it can often stay fairly stable.

And that means that at times when the gold price jumps up significantly – as it has done by almost US$300 per ounce since November – all the gains go straight to the margin.

Big gold miners, like Endeavour and Barrick, do well. But heavyweight investors are already well exposed to these.

It’s the mid-caps and smaller producers, like Caledonia Mining, Pan African Resources, Ariana Resources, Chaarat Gold, Resolute, Scotgold, Shanta and Serabi that tend to get the real boost.

But there’s often a delayed effect, as market sentiment catches up with fundamentals, and investors work out exactly where the best gains are to be had.

No two gold miners are alike of course, which is where the stock-picking skill enters back into the equation. Gold companies offer the production of a safe-haven asset with the corresponding downside of operational and – sometimes jurisdictional – risk.

But some companies have a better track record than others in this regard, and backing an experienced team is probably the key to making the right choices in this space. In Southern Africa, both Caledonia Mining and Pan African look attractive and well-seasoned, boasting long track records of successful gold production and decades of experience of operating in the country – respectively Zimbabwe and South Africa.

Caledonia has just completed the expansion of production at its long-lived Blanket mine in the south of Zimbabwe and is currently also absorbing the acquisition of the country’s largest undeveloped gold resource. It’s managed to keep operating throughout the ups and downs of recent Zimbabwean history, to the extent that it’s now a significant player at a national level.

Source: Proactive Investors

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