Mining ZimbabweLatest Mining News, Policy and Industry Updates

A FEW metres from Msasa Primary School along Shurugwi-Mhandamabwe Highway in Shurugwi District was a pit that has been a death trap to villagers and livestock, on Monday a Cabinet Minister led the locals in the reclamation process.

There are, however, many such pits in Shurugwi district as a result of gold panning activities.

The digging for minerals such as gold and chrome has left a trail of destruction of the environment along the Great Dyke.

Minister of Environment, Climate, Tourism and Hospitality Industry Mangaliso Ndlovu who led the locals in the reclamation of the dangerous pit near Msasa Primary School, said a Shurugwi farmer lost a US$3 500 pedigree bull that fell into one of the pits and died.

Reclamation works usually require huge amounts of money hence many companies involved in mining activities are reluctant to do the works thereby leaving villagers and their livestock exposed to the danger of falling into the dug pits.

It is against this background that Minister Ndlovu yesterday launched the national pits reclamation programme at Edwards Farm in Shurugwi District.

Minister Ndlovu was in Shurugwi North for the belated World Environmental Day national commemorations that were held at Msasa Primary School.

The Minister took time to visit Edwards Farm to see for himself the reclamation of the dangerous pit and launched the reclamation programme before joining villagers for the belated commemorations at the school.

The commemorations are held annually on June 5.

The dangerous pit that the villagers reclaimed with the help of bulldozers was left open by gold panners in 2018.

The pit was close to some homesteads making it a hazard to villagers and their livestock.

Minister Ndlovu who was accompanied by Chief Ntabeni from Zhombe, Chief Hama from Chirumanzu and Chief Nhema from Shurugwi and senior Government officials, said there is a need to put measures in place to force companies and individuals to reclaim pits.

Four bulldozers took turns to fill up the dangerous pit and Minister Ndlovu said that is what companies and individuals that dig up pits should do once they stop mining in an area.

“We have a lot of abandoned pits along the Great Dyke which are now a danger to people and their livestock. There is a case of a farmer who lost his US$3 500 bull after it fell and died in an unclaimed pit,” said Minister Ndlovu.

He said there is a need therefore for companies, individuals and locals to work together to reclaim pits in order to protect the environment, people and livestock.

Minister Ndlovu said individuals or companies that extract minerals such as gold and chrome must do the right thing which is reclaiming the pits before they leave the sites.

“We have a problem whereby miners come, extract minerals like chrome and leave these pits open expecting the Government or locals to reclaim the pits. It shouldn’t be like that, they must reclaim their pits because its them who would have made money from the minerals. When no owners are identified the Government is forced to reclaim the pits,” said

He said the Environmental Management Agency (EMA) should work with the Joint Operation Command (JOC) in monitoring the environment and make sure miners that dig pits reclaim them.

“I was talking to the Minister of State for Midlands Provincial Affairs and Devolution (Larry Mavima) and we agreed that EMA should work with JOC. EMA should be assisted to patrol and see to it that miners reclaim their pits before they leave,” said Minister Ndlovu.

Midlands province covers a 300km stretch of the Great Dyke hence it has many unclaimed pits which pose a danger to the environment, the people and livestock.

Minister Ndlovu said the extraction of minerals should be done in such a way that the environment, the people and livestock do not suffer.

EMA Midlands province manager Mr Benson Bhasera told Minister Ndlovu at the site that the pit which was closed yesterday was left in 2018 by illegal gold panners but the claim belongs to Unki Mines.

“This pit we closed today is located in Shurugwi North under a block where platinum mining is being done by Unki Mines. This block is reserved for Unki Mines but some people came and started mining and this is common in the province,” he said.

Mr Bhasera said the mining was illegal as the pit was only 400 metres from Mutevekwi River.

“This is the problem we experience where illegal miners just go onto a piece of land and start mining and then leave the pits open. We are glad that Minister Ndlovu is launching the national rehabilitation of pit reclamation in the province. This is a demonstration of how the rehabilitation of pits should be done,” he said.

Mr Bhasera said under the National Development Strategy (NDS1), EMA has prioritised rehabilitation of degraded areas.

“Minister you have been talking in Parliament without seeing the rehabilitation programme on the ground. Unki Mines has closed many pits like this one especially in Ward 16. This pit was 100 metres long and 40 metres wide,” he said.

The Chronicle

OFFICIALS at the Robert Mugabe International Airport have revealed that there is no diamond detecting machine to curb leakages of the mineral.

During a briefing to the Defence, Home Affairs and Security Parliamentary Portfolio Committee on Monday, Chief Aviation Security Officer, Gilbert Chimoto, told the committee that the airport’s human resource was the biggest challenge and had become a menace.

“The challenge we have is the insider threat. This has become a menace because the workers know how to circumvent the security system,” Chimoto said, adding that minerals needed to be detected before going through the security system.

“This should be done to enhance our security, leaving us focusing on our mandate. Each entity has to develop an insider program to deal with insider menace, which has affected all sectors even the world over.”

Chimoto however, said the airport also needed some equipment such as explosive trace detectors (ETDs) which can detect narcotics, perimeter kits that can alert officers if someone enters restricted areas, ex-ray machines, computed thermography and basic mineral-weighing machines to improve aviation security.

Committee member and Zanu PF Chiredzi South MP Callisto Gwanetsa, queried the safety of the country’s airspace considering that there were eight airports and airstrips countrywide, which could be the main mineral leakage ports.

“How safe is our air space vis-a-vis leakages? The country has 8 airports and airstrips in national parks and rural areas, which could be the ones being used as bases for mineral leakages. How safe is our airspace in terms of transportation of these minerals in terms of leakages?” Gwanetsa said.

Defence Committee chairman Levi Miyhlome expressed concern that minerals like gold and diamonds were being siphoned outside the country through ports of entry or exit.

“Recent media reports pointed to loopholes at ports of entry or points of extraction and processing. Minerals are being siphoned out of the country, lining pockets of a few individuals, said the MP.

“We know that there have been negative reports or incidents at this airport. We want to satisfy ourselves that the security system and working relationships at this airport satisfy the best expected standards.

In response, Robert Mugabe lnternational Airport CEO  Tawanda Gusha, admitted that the reports of leakages were there.

“We have had several negative reports of leakages, but we do have systems in place to safeguard those leakages. We also have a multi-stakeholder system in place,” said Gusha.

Director Aviation Security, Laxman Moyo chipped in, explaining the two reported incidents where gold was intercepted at OR Tambo Airport in South Africa and at RG International Airport.

“The two incidents were unfortunate, but the one at our airport was a test of our security system equipment because it led to the arrest of the culprit who tried to smuggle the gold mineral,” Moyo said.

Legislators had visited the RG International Airport on a fact-finding discussion with security from production to marketing on leakages of minerals, focusing on gold, diamond and platinum.

The airport is currently undergoing redevelopment in a US$153 million projected funded by the Chinese government.

When completed, capacity will to increase to 6 million people per annum from the current 2.5 million.

The project is set to add a new international terminal building and aprons, four new bridges, a secondary radar system, a VVIP pavilion, an airfield ground lighting and communication system, among other things.

The Reserve Bank of Zimbabwe has given power utility, ZESA, the green light to start charging exporters in foreign currency.

Through Statutory Instrument 131 of 2022, the central bank said ZESA can now bill exporters of goods and services in dollars, euros and other foreign currencies at the international cross rate.

Exporters that will be affected by the new regulations are those that export on average 80 percent or more per quarter of total output of goods or services produced or provided in Zimbabwe, for which it lawfully receives any foreign currency.

The regulations will also affect partial exporters, described under SI 131 or 2022 as those that export on average less than 80 percent per quarter of its total output of goods or services produced or provided by it in Zimbabwe, for which it lawfully receives any foreign currency.

However, ZESA shall not bill exporter to the extent of more 35 percent of the electricity supplied by ZESA to the partial exporter with the balance settled in Zimbabwean dollar at the prevailing interbank rate published by the Reserve Bank at the date of payment.

Exporters can however opt to pay for the electricity consumed in whole in United States dollars, or Euros.
According to SI 131 of 2022, an exporter or partial exporter shall pay for the supply of electricity supplied by ZESA from its export proceeds deposited in a foreign currency account operated by it, as may be permitted by the Reserve Bank of Zimbabwe after retentions have been applied.

The new regulations also allow for exporters to pay in advance for the supply of electricity by ZESA in foreign currency.

The power utility is however prohibited from making any withdrawals or payments from any foreign currency accounts without prior written approval of the Minister responsible for Finance and Economic Development and the Minister responsible for Energy and Power Development.

The funds will also be restricted to the purchasing of electricity outside Zimbabwe; importation of spare parts, critical assets and components needed to maintain the local generation, transmission, distribution and retail infrastructure of electricity network to ensure sustainable supply; payment of external insurance for critical infrastructure and external loan repayments.

“This order shall cease to have effect in relations to exporters and partial exporters who are residents of Zimbabwe six months after it is published, unless earlier renewed for a period not exceeding six months,” reads part of SI 131 of 2022.

Business Weekly

KUVIMBA Mining House-owned Jena Mine and fertilizer producer Sable Chemicals are amongst some of the debtors on Zibagwe rural district council’s (RDC) radar after their failure to settle financial obligations owed.

Zibagwe RDC chief executive officer (CEO) Farai Machaya said the two owed  over US$100,000 combined, adding the debt was now affecting council’s ability to provide services.

“Our debtors and creditors as of May 31, 2022, are at ZW$257,4 million and ZW$68,4 million respectively,” he said.

“Sable Chemicals and Jena Mine debt has accumulated to ZW$10 699 505. 96 and US$103 850.72 respectively. We continue to engage our debtors to come up with debt settlement plans,” Machaya said.

“Our creditors also continue to increase on a monthly basis owing to low revenue collection which is making it difficult for us to service our obligations as they fall due.”

Machaya’s revelations come at a time the Silobela community, from which Kuvimba Mining House operates, is up in arms with the company for failing to give back through corporate social responsibility (CSR).

Silobela legislator Mthokozisi Manoki Mpofu last week said Kuvimba was doing nothing as a way of giving back to the community and accused it of ignoring the area’s poor road network despite the amount of money it is making from it.

NewZimbabwe

Zimbabwe is revisiting all mining contracts signed in the last 20 years to interrogate potential risks associated with individuals, entities and investors it signed agreements with by taking a closer look at the levels of disclosure.

The move seeks to identify any unfair tax exemptions, incentives or tax holidays, offshore procurement and management contracts that may prejudice the mineral-rich Southern Africa state.

In addition, the initiative is aimed at assessing any legal loopholes in the contract agreements and outline the economic implications of the fiscal provisions in the mining agreements.

It is widely believed that corruption is rife in Zimbabwe’s lucrative mining sector, which the Government intends to grow to a US$12 billion industry by 2023.

Minerals constitutes close to three quarters of the country’s export receipts. Former President Robert Mugabe once claimed in 2016 that up to US$15 billion dollars had vanished due to illicit financial flows in the mining of diamonds.

The Office of the Auditor General has previously flagged corruption in the Ministry of Mines and Mining Development, where five officials from the state-owned Zimbabwe Mining Development Corporation (ZMDC) purported to the Government that they had formed a joint venture with a South African firm, BSGR, to mine diamonds.

In reality, it emerged they had formed a private joint venture with a South African company, Canadile Miners to exploit diamonds in Marange District, Manicaland province. It is believed they may have siphoned off US$6 million before the scandal was unearthed.

Zimbabwe, like most developing countries, has sought to replicate anti corruption strategies of the Organisation for Economic Co-operation and Development (OECD) countries with limited success.

It has been noted that OECD countries have achieved significant control of corruption through development processes and institutional reforms such as improving enforcement of the rule of law, changing the expected returns of corruption.

In 2005, Zimbabwe set up ZACC, which is currently running the Against Corruption Together (ACT) campaign spearheaded by the judiciary. These efforts have, however, achieved modest results given Zimbabwe was ranked the 17th most corrupt country in the 2016 Transparency International Corruption Perception Index (CPI).

According to a policy document availed to Parliament, the Government will hire a research consultant to undertake the investigation, which would also give recommendations on how to improve contract negotiations, which are advantageous to the country.

“The Government of the Republic of Zimbabwe has received financing from the African Development Fund (ADF) toward the cost of the Tax and Accountability Enhancement Project (TAEP), and intends to apply part of the agreed amount for this grant to payments under the contract for a research on the impacts of contract disclosure in the mining industry in Zimbabwe,” reads the policy document in part.

Using funding from the African Development Fund’s tax and accountability enhancement project, the exercise will also investigate the need for specific training needs of the Mines and Minerals Development Committee.

Secretary for Mines and Mining Development Onesimo Mazai Moyo, said he was not aware of the planned research into potential prejudice the country may have suffered from contract irregularities or limited disclosures in the country’s mining contracts over the last 20 years

He referred inquiries to the Ministry of Finance and Economic Development, whose officials could not be reached by the time of going to print yesterday, but he indicated all major mining contracts go through Cabinet.

“I do not think so (that there are irregularities in the contracts) because most of the major ones go through Cabinet, so there is no likelihood that an investor may come and the agreements are concluded in the offices of the permanent secretary (mines) and the (mines) minister alone,” he said.

According to Transparency International the Mines and Minerals Bill, currently before Parliament, should provide for parliamentary oversight of mining contracts in line with section 315 of the Constitution of Zimbabwe to ensure transparency and accountability in the negotiation of mining contracts.

Transparency International Zimbabwe regards itself as a non-profit, non-partisan local chapter of the global movement against corruption and has been at the forefront of questioning transparency and accountability in Zimbabwe’s extractive sector.

The organisation is part of the first cohort of 20 Transparency International (TI) Chapters involved in TI’s global programme to improve transparency in the process of awarding mining permits.

This global programme seeks to improve transparency and accountability in the extractive industries, focusing specifically on the very first link in the mining value chain: decisions by the Government to grant mining or exploration permits and licenses and negotiate contracts.

Research revealed 19 vulnerabilities in the process and practice of awarding blocks of claims for precious metals, which lead to 22 corruption risks. It says two-thirds of these corruption risks are almost certain to happen. A quarter of them have a catastrophic impact when they do occur.

A total of 16 corruption risks were assessed to be major; having either of, or both, a near certainty of occurring and a catastrophic impact.

While Zimbabwe is endowed with deposits of an estimated 40 minerals, only gold, diamonds, platinum group elements and nickel make a significant contribution to the economy. TIZ has previously undertaken a study focussing on the award process for types of mining licenses used for mining precious metals such as gold and platinum group metals.

According to TIZ, the country’s mining sector is plagued by corruption, despite the passing of some ‘best practice’ legislation and policies to combat corruption.

Corruption is often defined as the abuse of entrusted power for private gain. In the framework of the report on Zimbabwe, corruption is a deals-based way to sustain agreements among certain individuals or groups.

These agreements are based on the country’s legislation and structured around social practices and cemented by cooperation and trust among the individuals or groups engaged in corruption, TIZ said.

“While it has been argued that in the short- term, corruption can “grease the wheels of the economy,” in the long- term, it negatively affects economic growth by diverting resources from more productive uses and negatively affects equity by disproportionately benefiting those in power,” it said.

The Zimbabwe Environmental Law Association (ZELA), says despite going in circles on the adoption and implementation of the Extractive Industries Transparency Initiative (EITI) in Zimbabwe, consensus for mining sector transparency reforms exists among stakeholders.

“Through fiscal policies, the government has repeatedly committed to either implement EITI or revive the Zimbabwe Mining Revenue Transparency Initiative (ZMRTI), a homegrown version of the EITI that suffered stillbirth in 2013.

“Recently, the Government raised concern that data inadequacy and inaccuracy has stalled progress for a comprehensive mining fiscal regime which balances national development interest and the interest of investors,” ZELA says.

Business Weekly

GOVERNMENT says the repossession of underutilised mining concessions is an ongoing process.

Mines and Mining Development deputy minister Polite Kambamura said that it was not the government’s intention to take people’s mines, but encouraging them to utilise the concessions.

“The rational is not to take people’s mines, but for them to fully utilise them. Some have started working on the claims and the process is still ongoing though,” he said.

Last year, Mines minister Winston Chitando revealed that his ministry had successfully repossessed over 80 mining concessions under the “use-it or lose-it” policy.

“Under Zimbabwe, which is open to the business motto, these repossessed assets will be allocated to potential investors who really want them for productive purposes in line with Agenda 1 of the National Development Strategy.”

Government has in the past announced that it was also looking forward to re-sizing some of the concessions with a huge resource base and inordinate life spans and allocating them to other potential investors.

There have been concerns that prospective investors awarded the special grants in different mining sub-sectors of the economy were holding onto the claims for speculative purposes.

This ended up depriving Zimbabwe of its potential to exploit its vast mineral resource base.

The Mines and Minerals Act empowers government to repossess unused mining concessions to prevent speculative holding of valuable assets.

The regulation seeks to promote investment, job creation and ensure broader access to mining assets by allowing those ready to mine to file claims and obtain concessions.

In 2019, President Emmerson Mnangagwa launched a strategic roadmap for the mining industry to build a $12 billion sector by 2023.

Newsday

THE US$1,5 billion 600MW Hwange Power Station Unit 7 and 8 expansion project in Matabeleland North province will be a critical economic enabler beyond increased power generation as it will also boost several ancillary projects that feed into the on-going construction works.

Funded by China Exim Bank, Sinohydro and the Government of Zimbabwe through the Zimbabwe Power Company (ZPC), the project is now 89 percent complete with its first phase expected to be commissioned in November and the last phase sometime in March 2023.

The expansion project has already created more than 3 000 jobs for locals and has had downstream impact on suppliers of key materials.

The project’s positive impact dovetails with the Second Republic’s drive to transform Zimbabwe into an upper middle-income economy by 2030.

According to a presentation outline delivered by ZPC management during the visit to the project by the Parliamentary Portfolio Committee on Budget, Finance and Economic Development last week, several ancillary projects along the value chain are already benefiting while more are expected to also benefit from the power project.

These include the transport sector led by the National Railways of Zimbabwe, coal production and supply, cement and limestone production.

ZPC site Engineer, Forbes Chanakira, said the project is of immense benefit to the economy as it has created several spin-off projects.

“This project is a key enabler for economic growth and we have seen this happening as a lotof money is being channelled towards the support of local industries.

We have spent close to US$91 million on the local market through various contracts,” he said.

“We need to ensure that our local market is ready to participate in this major project.

The plant uses a lot of limestone, which has triggered economic growth as several limestone suppliers are benefiting” said Eng Chanakira.

He said 375 tonnes of limestone is required per day and 6 500 tonnes of coal.

Engagement with rail operators, NRZ and the Beitbridge Bulawayo Railway (BBR) is underway for the supply of the required materials.

The country’s major cement producer, PPC is said to be ready to supply the required limestone for both commissioning and operation.

Another beneficiary is the extension of the existing Deka water plant.

Just last week, ZPC announced that it has started receiving various components for the Deka project, which is funded to the tune of US$48,1 million from a line of credit extended by Indian Government.

Hwange Power Station draws raw water for electricity generation and cooling from the Zambezi River and the Deka water project is crucial in that regard.

The water demand for Unit 7 and 8 is 1 860 cubic metres per hour and a new 250 000 cubic metres reservoir to complement the existing one has been constructed as part of the expansion project.

The power station is expected to generate more than 60 percent of Zimbabwe’s electricity needs following the expansion.

The Chronicle

The train arriving at the Maputo port, hauling 40 wagons each carrying 2000 tonnes of coal from Botswana, shows how coal producers are riding the growing global demand for coal.

The train into Grindrod‘s Maputo dry bulk terminal in April was the first of its kind from Botswana, as the country steps up coal exports.

Further south, at South Africa’s Richards Bay, coal supplies to Europe are also growing. Between January and May this year, 40% more tonnes of coal were exported to Europe from the Richards Bay Coal Terminal than were exported in all of 2021.

Europe is stepping up coal imports as an alternative to energy imports from Russia. The European Commission now expects the EU will use 5% more coal than previously expected over the next decade.

Coal-producing countries are rubbing their hands with glee.

“We have received inquiries from Europe and so we want to (export),” Botswana President Mokgweetsi Masisi told Reuters in May.

“Typically what we’ve been getting is 50,000 tonnes a month is what they want to get, but we’ve also had others (inquiring about) long-term contracts. (We are) looking at a million tonnes a year from individual countries (combined),” Botswana’s Energy Minister Lefoko Moagi said.

Coal prices are now hitting record highs, and Botswana and South Africa have grabbed the opportunity with both hands.

Zimbabwe? Not so much.

Coal miners in a deep hole

Local coal producers are struggling to meet domestic demand and export needs.

The Hwange power station buys 90% of all coal produced by miners, including Hwange Colliery and Makomo Resources. But payments to coal suppliers are erratic. In 2020, the government allowed the power station to stop paying coal suppliers in US dollars, hurting their operations.

Coal producers for years had to take US$29 per tonne, paid for in local currency. This is at a time coal prices are soaring globally. According to Exxaro, one of SA’s biggest coal producers, coal prices averaged US$270 per tonne in the first half of this year. This was nearly double the price from the same period last year.

Until recently, Zimbabwean coal miners were also tied to short-term coal supply contracts. These left them with little chance of securing the funding they need to retool.

The result has been predictable. With debts piling up and profits falling, Makomo slid into corporate rescue in November. Production stopped, only restarting in June, but at a fraction of capacity.

“We are still working on a turnaround plan, but production has resumed,” Bulisa Mbano, who is leading the corporate rescue mission at the mine, said in June.

At Hwange Colliery, the company plans to raise output. But it lacks the capital to develop resources as much as it needs to.

Last year, Hwange Colliery grew coal production by 49.5%. The company plans to increase output through a US$15 million equipment supply deal and by opening new mining areas.

Coal hopes up?

The Zimbabwe Coal Producers Association is hoping to take advantage of rising export demand. Even if coal miners dig more coal, they face the problem of inefficient rail. Producers are clearing logistical hurdles, including deals to improve rail links to Maputo.

“We are interested in supplying the European market,” the organisation says. “Now that the prices are as high as they are, exports from landlocked regions are now viable.”

Domestic demand for coal will rise sharply next year when Hwange power station brings on stream two new generator units of a combined 600MW. Yet, already, producers are unable to meet local needs, let alone exports.  Smaller thermal power stations missed their power output targets in the first quarter of 2022. This was partly due to low coal stocks, according to a report by the Zimbabwe Power Company.

While Zimbabwean coal miners struggle with low prices and delayed payments, the story is different next door. In Botswana, India’s Jindal Steel & Power plans to build a new coal mine this year, targeting the export market. The Morupule Coal Mine has just signed US$20 million worth of supply contracts to Asia and Europe.

The coal train from Botswana to Maputo passes through Zimbabwe. It’s a poignant symbol of how, yet again, an opportunity is passing the country by.

Some 26 billion tonnes of coal lie under Zimbabwe’s earth, enough to last 834 years. But years of failure to invest means that the country can only watch as the coal boom roars past.

NewZwire

Premier African Minerals will start shipping spodumene concentrate from its Zulu lithium mine in Zimbabwe to China by March 2023 after signing an offtake deal with Suzhou TA&A Ultra Clean Technology Co, chief executive George Roach says.

Zimbabwe holds some of the world’s biggest hard-rock lithium deposits and Suzhou joins a growing list of Chinese firms that have invested in the southern African country’s battery minerals projects, including Zhejiang Huayou Cobalt and Sinomine Resource Group.

Roach said Suzhou is injecting US$35 million for the construction of a high-capacity pilot plant at Zulu, output from which would be nearly 50,000 tonnes of spodumene concentrate annually.

Construction can start immediately thanks to the funding, Roach said, with an aim to ship by March 31 2023 and ramp up production to around 48,000 tonnes of spodumene concentrate a year.

Lithium scramble

In March, Suzhou became a 13.38% shareholder in Premier through a private placement in which it injected US$14.37 million into the company, securing spodumene concentrate supply for Yibin Tianyi, China’s leading lithium chemicals producer, which Suzhou jointly owns with CATL, the world’s largest electric vehicle battery maker.

The prices of lithium minerals, key components in the manufacture of electric batteries, have soared in recent months, thanks to growing demand for clean energy sources, and Zimbabwe, starved of investment for more than two decades, hopes its lithium resources will recharge its moribund economy.

Premier picked Suzhou as a partner from a swarm of Chinese, European and Australian investors kicking the tyres of Zimbabwe’s lithium projects.

“At one point, I was involved with 11 separate negotiations with people all wanting Zulu!” Roach said. “It was a very intense period.”

Newzwire