Mining ZimbabweLatest Mining News, Policy and Industry Updates

In a bid to force diversified group RioZim Limited to bend over to their demands for reasonable remuneration, employees working at the group’s mines have threatened to withdraw their services until their demands for fair compensation and good working environments are met.

Rudairo Mapuranga

Through a letter seen by this publication written by the General Secretary of Zimbabwe Diamond and Allied Mine Workers Union (ZDAMWU) Mr Justice Chinhema, the employees raised a number of issues which they said needed to be addressed which includes the non-payment of bonuses, non-payment of salaries on the due date, non-provision of protective clothing among other reasons.

The contents of the letter reads:

We write on behalf of our members at your mines, Renco, Cam and Motor and ENR. Please note our professional interest.

You may recall the several meetings we had between Mine Managers and the respective Human resources personnel at your different locations aforesaid. You may also acknowledge that issues have been ventilated and several resolutions were made. In particular, in December 2021, we agreed on payments on back pay and salaries that were due. In January 2022, in respect of Cam and Motor, and ENR, parties signed a certificate of settlement before the Labour officer after a dispute that nearly accumulated into a job action.

In April 2022, we had a meeting with your workers at Renco, and our thrust then was to avoid collective job action that was looming. You are aware of what then followed after the issues the workers were raising were not resolved, resulting in court litigations.

There are two important issues to highlight herein. The first is the issue of a settlement certificate that was breached, and subsequent salary dates from the employer which were never honoured on time. The second issue is the proposals that were submitted before the labour court in respect of Renco employees, which proposals continues to be renegaded upon by the employer and matters postponed at whim.

Now, the employees have organised themselves in unison, and are saying enough is enough. The employer is always ready to employ the no work no pay principle, but in defiance of the parity principle, the employer is not willing to employ the no pay no work principle.

The main issues are:

1. a) Non-payment of bonus.
2. b) Non-payment of salaries on due date.
3. c) Delay of back pay payment, resulting in loss of value on rtgs.
4. d) Payment of salaries in instalments.
5. e) Continued threats to workers committee
6. f) Non-provision of PPE
7. g) Discrimination on bonus payment-favourable treatment of permanent employee against fixed term contractors.
8. h) Non-compliance with Works Council resolutions.
9. i) Negotiating in the works council in bad faith

All the workers at your different mine stations have agreed that they cannot continue to leave in this prison-like employment set-up, to the extent that some are even suggesting that Renco mine be re-named to Renco Open Prison.

The plan now is to embark on a country-wide collective job action. This is not the notice in of section 104(2a) of the Labour Act Chapter 28:01. It is a warning of what is looming, and we demand answers. The Biox issue that we were promised would increase output by April 2022 has not improved the situation as was promised in the meetings we had with the management in December 2021.

We are also left with no option but to agree with the workers that their situation needs the employer to act, and if the employer fails to act, the workers will take action and defend their rights as per provisions of the law. An employee at common law has a right to withdraw his labour, the only tool he can use against the employer, the only commodity they are selling to the employer.

Mine workers are saying enough is enough. Kusiri kufa ndekupi. They are producing Gold and other precious minerals, but they continue to leave like paupers.

Kindly write to us within seven days hereof and update us on how you would have resolved the issues, not proposals, but resolutions. Failure we will be unable to control the mass, and a nationwide strike will commence, lawfully. ENDS//

FOSSIL Mines’ offer to acquire 76,45% shareholding in cement maker, Lafarge Cement Zimbabwe will be supported by local banks, pension funds and wealth managers as the mining firm moves to consolidate its performance in the sector.

Lafarge Cement Zimbabwe’s stake owned by Associated International Cement Limited (AICL) — a member of the multinational conglomerate and Swiss-based Holcim Group — will now be owned by Fossil which already has several mining ventures across Zimbabwe. Fossil Mines is a subsidiary of Fossil Group — a company with interests in construction, road works and agriculture.

The Lafarge deal is expected to run into tens of millions of United States dollars. However, officials remained mum on the figures involved in the transaction, saying more details would be released soon.

“Fossil’s offer is backed by support from local banks, pension funds and wealth managers. Fossil engaged local financial advisors, and commercial attorneys to act on its behalf on the bid as well as Cliff, Decker and Hofmeyer of South Africa to act as its transaction advisory team,” Fossil told the Independent. But the disposal of Holcim’s Zimbabwean shareholding follows prior divesting of the cement giant’s shareholding in the Northern Ireland, Zambian and Malawian markets.

The Zimbabwe Independent also understands that the Holcim Group is in the process of disposing of its Indian cement business.

Details obtained this week regarding the Lafarge transaction show that cement conglomerate Holcim Group first announced on January 25, 2022 an intention to dispose of 76,45% shareholding in Lafarge Cement Zimbabwe. This is part of Holcim’s strategy to divest from the cement manufacturing business as has so far been done in Ghana and Brazil in a transaction reported to have raked in about US$1 billion.

After the January announcement, Holcim then invited interested bidders to submit expressions of interest (EOI) to its financial advisors, Absa Corporate and Investment Banking in South Africa. Absa is one of the biggest financial services groups in South Africa and in other 11 African countries with a total asset portfolio of a jaw-dropping R1,4 trillion and a staggering 60 000 workers.

However, following the evaluation of expressions of interest on March 1, 2022 Holcim then invited potential suitors to submit binding offers of interest for the acquisition.

Consequently, five firms were selected including Chinese giant Huaxin and Fossil Mines, among others. The companies were chosen for the acquisition via an auction system and as part of evaluating the bids, Holcim invited the bidders to South Africa for negotiations. The Lafarge transaction negotiations between Holcim and Fossil were held in South Africa between May 28-30, 2022 wherein Fossil’s offer to acquire 76,45% of Lafarge Zimbabwe was accepted pending further due diligence of the asset (Lafarge) and regulatory approvals.

Fossil said: “Should Fossil takeover Lafarge, the planned strategy is to maintain the company as a listed business and also recapitalise the cement maker, leading to an increase in the cement output from the plant. Currently, 40% of Zimbabwe’s cement requirements are imported, an opportunity that Fossil wants to capitalise on by providing the market with readily available cement.”

Lafarge Cement Zimbabwe acting company secretary Arnold Chikazhe, in a cautionary statement this week, said Holcim has entered into an agreement with Fossil Mines for the acquisition of the 76,45% stake.

“The transaction, if successfully concluded, may have a material effect on the company’s securities. Accordingly, shareholders and members of the investing public are advised to exercise caution when dealing in the company’s securities until a full announcement is made,” Chikazhe said.

Lafarge, which employs over 800 people, has a 60-year-old presence in Zimbabwe and is well known for making cement, aggregates and dry mortar. The company experienced a major setback on October 11, 2021 after a mill plant roof collapsed, affecting operations between October 2021 and mid-February 2022.

But Fossil has committed to increasing output to ensure cement availability on the market.

A FACT-FINDING visit by parliament to resource-rich Muzarabani has been planned in the wake of disruptive mining activities triggered by haphazard land planning in the area.

The impending visit to Muzarabani, which will jointly be undertaken by the Parliamentary Portfolio Committees on Environment and Mining, comes a year after the government banned all mining activities in the area, which lies within the Great Dyke minerals belt.

Last year, mining firm Afrochine Smelting, which is constructing a steel plant in the country, approached the courts seeking an order to bar Earthlink from extracting chrome in the Mavhuradonha Wilderness — an extensive wildlife habitat designated as a protected area.

Muzarabani South House of Assembly representative Size Tapera told the Independent this week that the imminent visit by Parliament to the area, which borders Guruve, was to ascertain “what is really happening”.

“These activities (disruptive mining) are taking place on the Guruve North side but of course at the border with my constituency. I understand the portfolio committees on mining and environment have been briefed on these activities and visits are going to be done there so as to ascertain what really is happening,” Tapera said.

At the time of going to print, the dates of the scheduled visit had not been revealed.

In a separate briefing with the Independent this week, Guruve South legislator Patrick Dutiro attributed the chaotic mining activities in the area to a disorderly land planning framework.

“It is a complicated issue brought about by non-governmental organisations (NGOs) and the local authorities whose boundaries are not clear. There is no proper land planning on the part of the government and the local authorities,” Dutiro said.

“Most of the parks were established during the Unilateral Declaration of Independence (UDI) era and they constitute about 33% of the country. There is a need to have a relook at how we can make use of a third of our country.

“We need a national consensus on all our parks. Hwange National Park is the size of Belgium and what are we getting from it in comparison to its size?”

He said the Great Dyke has always been at the centre of global discussions due to its importance to superpowers angling to gain a foothold over the terrain.

The Great Dyke constitutes, the “Persian Gulf of Strategic Minerals” — a term which was popularised at the height of the Cold War when a United States Congress Committee highlighted US intentions to gain control of minerals of geopolitical significance strewn over Rhodesia, now Zimbabwe, South Africa, Democratic Republic of Congo, then Zaire, and Zambia.

“People are peddling propaganda against the Chinese. Western countries have a huge interest in the Great Dyke and they are hiding behind the conservancy,” Dutiro added.

In recent times, mining investors and environmentalists have been at loggerheads over the area in whose belly lies a lucrative mineral treasure trove while an array of wildlife roams on the surface.

The Independent 

ZIMBABWE’s Mines minister, Winston Chitando last week shot down requests by gold producers to channel fresh capital from pension funds to rebuild undercapitalised operators.

Gold miners alone have since the past decade been combing through markets for US$1 billion to help them return to full production.

In total, Zimbabwe’s mines say they require injections of up to US$5 billion to drive operators out of a dire crisis, which has been compounded by weak domestic banks and unsustainable interest rates.

In a presentation made during last week’s Chamber of Mines of Zimbabwe annual mining conference in Victoria Falls, the Gold Producers Association said it had located an avenue for funding through a new insurance Bill that allows pension funds to invest 15% of their portfolios offshore.

Qhubeka Nkomo, president of the association said instead of sending liquidity out to offshore markets such funds would come handy for miners.

Current regulations bar local insurers and pension funds from investing abroad.

But there has been a push by organisations including Life Offices Association of Zimbabwe (LOAZ) for permission to invest funds into offshore markets.

LOAZ says this would help mitigate domestic risks associated with an economy that has been haemorrhaging for 22 years.

Authorities have bought into the idea, and should the Bill be enacted, millions of United States dollars would flow out of pension funds into high return offshore markets.

In his presentation to the conference Nkomo said investing such funds into the mining industry would be vital for addressing the capital problems.

But Chitando said it would be “unfair”.

“Pension funds are already invested into the mining sector through the Zimbabwe Stock Exchange and the Victoria Falls Stock Exchange and through other private placements where they acquire stakes,” the minister said.

“To give the 15% to the mining industry may be unfair to pension funds,” Chitando told the conference.

In 2017, former LOAZ chairman, Reuben Java said offshore investments would help the insurance industry spread risk and mitigate losses during turbulent times.

Java said had insurance firms invested part of the funds offshore, the impact of the hyperinflationary crisis experienced in the last decade could have been mitigated by returns from stable markets.

“We are not allowed to invest offshore,” Java said then.

“We keep having conversations with regulators but we are not allowed. In other countries, insurance companies are allowed to invest offshore so that if there are problems in one country, assets in other countries are safe. Hyperinflation destroyed value. It wreaked (havoc on) our savings… Inflation ran away, it became uncontrollable. It killed our exchange rate; whatever we had became worthless,” he added.

Billions in US-dollar savings were wiped out then, and today, Zimbabwe has one of the most struggling pensioners.

During last week’s conference, the government laid out a multi-pronged approach to help mines scale up production as industry executives indicated that the scale of capital required to bolster operations was too huge for domestic lenders.

More than US$30 million in fresh funding was estimated to be destined for mines immediately from sources outside the banking sector as mining executives digested the industry’s future.

State-run gold buyer, Fidelity Printers and Refiners said loans of at least US$20 million would be injected into sector operators while the Ministry of Mines and Mining Development said it was deploying its share of US$961 million special drawing rights (SDRs) allocated to Zimbabwe by the International Monetary Fund (IMF) to recapitalise the mining industry.

Bankers also said they were ready to fund production.

Onesimo Mazai Moyo, permanent secretary in the Ministry of Mines, told delegates that Treasury had released US$10 million out of the US$961 million IMF package, which will soon be channelled to mines.

Moyo said the government was working out a deployment strategy with banks to determine how SDRs will flow into mining companies.

SDRs will not be free money, but the government says it will charge competitive rates to borrowers in order to revive hundreds of struggling companies across sectors.

“The ministry was allocated US$10 million from the SDRs and we are working with Treasury and banks to make sure this money is lent to the mining industry,” Moyo told delegates.

“Beneficiaries will include small-scale miners because we want inclusive growth. We are establishing a facility with banks, because they are skilled in that area,” he said.

The Independent 

CHINESE mining firm Anjin Investments suffered a massive slump in diamond production in 2021 recording 70 000 carats from 790 000 carats produced the previous year due to the relocation of its processing plants.

The diamond company is, however, projecting a production ramp up this year.

Anjin is a 50-50 partnership between Chinese investor Anhui Foreign Economic Construction Company (AFECC) and the Zimbabwe National Army.

The company’s production trends came into the spotlight following the Commodity Outlook 2022 report released by the Chamber of Mines in February this year.

The report indicated that all the diamond firms produced an annual output of 4,2 million carats last year.

It further quantified that the Zimbabwe Consolidated Diamond Company (ZCDC) contributed 89% while 10% came from RioZim’s subsidiary Murowa Diamonds.

Technically, this left a mere 1% unaccounted for, which could be attributed to Anjin.

“Production started in April 2020. Approximately 790 000 carats (have been produced in two years). 720 000 carats (were produced) in 2020 and 70 000 carats in 2021.

“Most of the work in 2021 focused on relocating plants to bring them closer to the mining area. From the old mining area of our mining concession to Portal B area,” Anjin public relations officer Special Matarirano said in an interview recently.

Anjin’s operations used to be centralised in Jesse and Chirasika concessions now known as Portal C and L2, prior to its forced exit in Marange in 2015.

Former Mines minister Walter Chidhakwa revoked licences of all the Marange miners, Anjin included.

However, Anjin made a surprise return to the vast diamond fields following a military coup in 2017. The miner was further awarded the most productive concession — Portal B — previously owned by Marange Resources and briefly by ZCDC.

Matarirano said Anjin is projecting a major comeback targeting to produce 700 000 carats this year and 12 million carats by 2025.

“Approximately 700 000 carats (in 2022) and 12 million carats (by 2025),” he said.

Matarirano added that Anjin is currently making use of the strip method to mine diamonds in the conglomerate matrix and also exploring to determine the resource in Portal B.

Its comeback is expected to boost the country’s combined annual diamond turnover to five million carats by year-end.

The development comes as Anjin is currently operating at 70% capacity utilisation according to information gathered from the firm.The diamond miner also indicated that it has a staff complement of around 500 workers with locals constituting 85 percent. 

The  Independent 

When earnings from selling tomatoes could hardly secure the next meal for Linda Sherekete (29) and her two children — aged seven and 10 — she became desperate for a decent-paying occupation.

In Zimbabwe, employment does not come-by easily and at Lowdale Farm in Mazowe South, Mashonaland Central province, the prospects of getting a suitable job were even slimmer.

The area, situated some 25km north of Harare, is known for smallholder farming and informal gold mining, making it a very masculine environment.

In 2018, Labenmon Investments set up a US$20 million-nickel processing plant to beneficiate the base metal at Lowdale.

Sherekete knew she had to be daring to get a job there nine months ago.

“I used to sell tomatoes at a vending stall, but the money was not enough. So I decided to join the men who were waiting for job openings at the plant’s gate,” she explained. Persistence saw her not only becoming a security guard manning the same gate, but the first woman to be employed there.

“Poverty gave me strength to come job-seeking here. I have two children and now they are getting enough to eat and go to school in appropriate uniforms,. which shows that they have a working mother.”

The plant currently employs 108 people and the number of women has risen since Sherekete got a job.

Labenmon Investments, a Chinese mining and logistics firm, which started its local operations in 2006 with a special focus in gold and nickel mining, has now included value addition and beneficiation through establishment of refineries.

This comes as the country is pursuing an ambitious US$12 billion mining industry target by next year as part of the broader macroeconomic roadmap towards an upper middle-income economy by 2030.

The development has seen an influx in Chinese investments and while they have been contributing to increasing formal employment and setting up infrastructure, critics believe that it has not been enough compared to the profits they are making.

“In our mines, refinery plants and also transportation companies we have employed hundreds of local people, we strive to protect the environment and also conduct our corporate social responsibilities (CSR) just as we do in China,” Labenmon Investments manager Tang Jun told journalists last week.

“Our main purpose is to improve the lives of the people and benefit the community.”

In addition to donations made to a local primary and secondary school, Labenmon has built houses for their workers, among other CSR projects.

Jun also revealed that they have committed US$2 million to convert Lowdale’s rugged 8km main road into a world-class concrete one.

According to him, they have settled for a more costly concrete road instead of a tarred one for its durability — concrete roads last up to 25 years — and as an assurance of their sincere partnership with locals.

“In China we have one saying that if you want to have a good life or become rich you first have to construct a good road,” said Jun adding that the high-priced road is “a sign of sincere contributions by Chinese investors”.

“There is widespread talk on social media that we are looting resources but we are not looting, we are here to partner with the government and local people in mining, refinery and export of products that earn foreign currency for the government and its people.

“We are happy to be with the Zimbabwean sisters and brothers working together to improve livelihoods and contribute to the economic development of the country.”

For years, China has been the largest source of foreign investment in Zimbabwe since the latter adopted a “look-east policy” in 2003 that seeks trade as well as political agreements with Asian countries considered friendly to it.

Last year trade between the two countries, which has seen Zimbabwe export goods like tobacco, ferrochrome and copper among others while importing electromechanical products, communication technology and textile products etcetera, reportedly amounted close to US$ 2 billion.

However, a cloud of uncertainty hoovers over a significant number of local Chinese businesses says Farai Maguwu, the founding director of Centre for Natural Resource Governance (CNRG).

“A baseline of Chinese Investments in Zimbabwe shows that the majority are extractivist in nature, they are very exploitative and negotiated at the political and military level,” Maguwu told The Standard.

“When they get to the community the decision has already been reached and they are not accountable to the local people, but to the one who gave them access to the community.”

It takes two to tango and although Maguwu raises red flags on both parties he mainly accuses government for an apparent pillaging of local natural resources, which he said is a result of rent-seeking behaviour and laxity of local laws.

“The government of Zimbabwe must create a framework at the political level of what we want to get out of our natural resources then the junior officials who make policies will ensure that when investors come they play to the games that we would have set but at the moment it is just rent-seeking,” he said.

But, looking at the Labenmon case where millions of dollars have been poured into developing the community and the positive testimonials of their workers the big question is why is there a blanket perception that Chinese Investors are looters?

“Chinese investors have been bad-mouthed a lot of late and we have not said anything but now we want to show people what we do,” says Steve Zhao, director of China-Africa Economic Research Centre.

Essentially, Zhao says, the Chinese community now wants to “speak out about who we are and what we are really doing” to dispel the “fake accounts intended to smear us”.

“The majority of Chinese people and companies in this country are good people and want to develop the country as well as share the success experiences from China with the local people so as to build the Zimbabwean economy.”

Building together is what Tichaona Gwashavanhu (42), an informal gold miner turned plant supervisor at Labenmon, believes the miner has gotten them to a point where they are seeing development in their community.

“This area was so primitive and it was scary because of rampant crime, but now we are relieved as a result of these developments,” said the married father of four.

“We look forward to a lot of other developments that they have promised and we are ready to help them in these mutual achievements because they are not originally from around so they may not know what we want in our country but we will tell them so we can build together.”

The Standard 

The Minerals Marketing Corporation of Zimbabwe (MMCZ), which earlier this year announced a mop-up exercise of the country’s gemstones, has yet again called for individuals and corporates to participate in buying and selling gemstones as subagents of the company.

Prince Sunduzani

The move is meant to plug the illicit flow of gemstones, which are finding their way out of the country through illegal channels.

The country is said to be losing over 50 million dollars every year through overnight and illicit sales of the country’s gemstones.

The Idea to have sub-agents started about three years back although several individuals wishing to be a part of the initiative fell short of MMCZ’s requirements and ended up failing to register.

It has had many false starts since the issuing of the SI 256 of 2019 and reports are that no subagents have been licenced before.

“Interested Zimbabwean citizens are invited to submit an expression of interest to be considered and licensed as MMCZ subagents to purchase coloured gemstones around the country and sell the same through the corporation as per MMCZ Act.

Chapter 21:04. MMCZ Gemstones sub agents are appointed in terms of SI 256 of 2019,” said MMCZ.

“The function of an MMCZ gemstone sub-agents is to buy coloured gemstones from small scale miners within Special Grants as defined in the SI 256 of 2019 and sell the coloured gemstones through Minerals Marketing Corporation of Zimbabwe.”

The deadline for the application is 14 June 2022.

This call dovetails with the calls by the country’s biggest mining body, Zimbabwe Miners Federation (ZMF), to formalise the gemstone industry.

The organisation held a meeting with MMCZ in Harare, in March and proposed the formalization of operations of Artisanal and Small Scale Miners in the Gemstones industry, which includes among others, MMCZ issues subagents licenses for the trading of Gemstones through  ZMF and creation of a round-robin education and awareness campaign in all gemstone mining districts.