Mining ZimbabweLatest Mining News, Policy and Industry Updates

EXALO #202, the oil and gas drilling rig that is on its way to kick off crucial test well drilling at Invictus Energy’s Muzarabani oilfields, which has been stuck in Tanzania, has been released following the completion of clearing procedures and documentation.

Rudairo Mapuranga

Invictus Energy Limited, the Austria Stock Exchange-listed company that is exploring for oil and gas in the Muzarabani-Mukuyu area has confirmed that the company is now mobilizing for the transportation of the drill rig from Tanzania.

“Invictus is pleased to confirm that following the completion of clearing procedures and documentation, the Exalo Rig 202 has commenced mobilisation from Songo Songo Island in Tanzania to Cabora Bassa.

“The rig and associated equipment will arrive over the course of June and commence rig up to drill the first of two wells in the Company’s upcoming exploration campaign in the Cabora Bassa Basin.

“The long lead items, including the casing, have begun arriving at the Company’s supply base in Harare and are being prepared for deployment to the Mukuyu-1 wellsite.”

According to Invictus Managing Director Scott MacMillan, “The commencement of the rig mobilisation marks another milestone in the project as we prepare to commence drilling the Mukuyu-1 well, the first well in our potentially play opening two-well exploration campaign in the frontier Cabora Bassa Basin.

”The enlarged SG 4571 licence provides us with a basin master position encompassing the entire Cabora Bassa Basin in Zimbabwe.

“Subject to making an opening discovery with one of our first two wells, it potentially could provide us with future discoveries on a large scale within the basin which will be transformational for the Company and the Republic of Zimbabwe.“

The Company has been advised that the pre-gazettal administration process to increase the SG 4571 permit area by sevenfold has been completed and awaits publishing in the Government Gazette.

Invictus’ 80% owned subsidiary Geo Associates (Pvt) Ltd (“Geo Associates”) and the Sovereign Wealth Fund of Zimbabwe (“SWFZ”) have executed a Heads of Agreement (“HoA”) to increase Special Grant 4571 (“SG 4571”) licence area from 100,000 hectares to 709,300 hectares which is detailed in the ASX release on 28 March 2022.

The Company has committed to drill a second well in the campaign to test the newly identified basin margin play which was matured through the CB21 Seismic Survey completed in November 2021. Details of the second well will be provided once the gazettal process has been completed. Geo Associates and the Republic of Zimbabwe will also conclude the Petroleum Production Sharing Agreement (PPSA) which will encompass the legal and fiscal provisions to govern the project and the development of any discovered resource.

Under the HoA the SG 4571 licence and application area will be amalgamated with the SWFZ’s MSC003 Cabora Bassa South Reserved Area to cover the entire Cabora Bassa Basin in Zimbabwe.

The Mukuyu-1 wellpad construction is nearing completion following the finalisation of civil works including pad levelling and compaction, water supply and reservoirs. The concrete footings for the rig will be poured for curing ahead of the arrival of the rig to the wellsite.

The Mukuyu-1 well will test multiple stacked targets within the greater Mukuyu structure which is independently estimated to contain 8.2 Tcf + 247 million barrels of conventional gas-condensate (gross mean unrisked) – see Independent Prospective Resource Estimate on 1 July 2019 and #Cautionary Statement on Prospective Resources.

The Company is awaiting an updated Independent Prospective Resources Estimate incorporating the new CB21 Seismic results which will be released when completed.

THE Zimbabwe Miners Federation (ZMF) says cooperation between large and small-scale miners will go a long way in boosting output and the mining industry’s overall contribution to the economy.

The mining industry is one of the major economic centerpieces expected to drive the country towards an upper middle income economy status by 2030.

It is against this background that the Government envisions a US$12 billion mining industry by next year buoyed by minerals such as gold, platinum, diamond, chrome ferrochrome, chrome and lithium.

Last year, the mining industry earned the country US$5,2 billion up from US$2,7 billion in 2017 and the figure this year is projected to reach US$8 billion.

Addressing delegates at the just ended Chamber of Mines of Zimbabwe (CoMZ) annual conference in Victoria Falls, ZMF president Ms Henrietta Rushwaya whose organisation represents the interest of artisanal and small-scale miners said: “In many parts of the world, artisanal and small-scale miners (ASM), and large scale miners (LSM) operate in neighbouring concessions and sometimes on the same.

“ASM activities are increasingly in contact with LSM operations, making the probability for conflict— as well as the potential opportunity for cooperation between the two—greater than ever before.”

Responding to questions from this paper following her presentation at the CoMZ conference, Ms Rushwaya said their relationship with LSM was cordial, adding that ASM have a lot to learn from the primary producer.

“Cooperation between the two entities will go a long way in ensuring that the sector increases from the current 3,4 percent growth and will also go beyond the US$5,2 billion mineral exports which make 83 percent of the country’s total national exports.

“We have a lot to learn from the LSM especially when it comes to corporate governance, skills transfer, health and safety just to mention a few,” she said.

“We need to enter into tribute agreements with tittle holders in order to mine at their designated claims; we also need to tap into their experience and expertise when it comes to health and safety and this is only achieved through identification and minimisation of hazards that include environmental and equipment based factors.”

Of late, some miners affiliated to ZMF lost their lives following an accident at a mine in Gwanda, Matabeleland South province.

“Recently, we had an accident which claimed seven lives at Rany mine and the Duration Gold Mine (Vumbachikwe) highly skilled Proto Team risked their lives by going down 240 metres to recover the bodies.

“Such efforts are applaudable and show a sense of unity of purpose. As part of formalization the LSM will also train our ASM members on various mining aspects as part of skills transfer.

At the CoMZ conference, the ZMF president highlighted that the major challenges hindering sustainable mining activities by artisanal and small-scale miners include lack of financial and technical resources.

She said ASM find it difficult to meet the criteria for loan facility or overdrafts adding that players in the sector were also constrained by lack of formalisation.

And this limited ASM potential to effectively participate in the mainstream economy. Other setbacks are to do with lack of geological information, marketing barriers, unskilled labour force and the use of rudimentary tools.

As part of ZMF’s strategy to uplift artisanal and small-scale miners, Ms Rushwaya said her federation was going ahead with strategic partnerships with local and foreign investors as well as creating a Special Purpose Vehicle to run with ASM projects.

In April this year, ZMF, which is a non-profit-making organisation, announced the establishment of an independent company, FS Mining (Pvt) Ltd, to run and manage its projects.

FS Mining, which is a Special Purpose Vehicle, will be running and managing ZMF projects particularly in relation to issues to do with investment protection and funding programmes for small-scale miners.

The small-scale mining industry has been recognized by the Government as a critical sector that was contributing significantly to the development of the economy.

Last year, Zimbabwe’s total gold deliveries reached 29,6 tonnes from which over 18 tonnes was the contribution by players in the small-scale mining industry.

Business Weekly

As Zimbabwe prepares to commission two electricity generators at the Hwange thermal plant in the next few months, concerns have been raised over the capacity of coal producers to adequately meet demand in light of unviable coal prices.

The first unit is expected to be commissioned in November this year, six months after the initial target as COVID-19 induced disruptions delayed the delivery of some of the equipment. The second will come on line during the first quarter of 2023.

The two units, with a combined production capacity of 600 megawatts (MW), almost 65 percent of the existing capacity are expected to significantly reduce power rationing.

Zimbabwe contracted China’s Sino Hydro to build two more units at Hwange for US$1,4 billion.

The coming on-stream of the new units will push demand for coal up with analysts and industry players raising concerns over the capacity of miners to produce enough.

The price of coal is currently pegged at US$29 per tonne and is paid in local currency using the interbank rate. With most production inputs, such as explosives, fuels, and consumables being paid in US dollars, the price has become unviable.

“The issue of the viability of the coal producers is critical otherwise we will end up having the idle capacity (of the power plant),” said a senior executive of a coal mining company, who declined to be named because is not allowed to talk to the press.

“Most of our expenses are in US dollars, fuels, consumables, and now labour but we are paid in local currency at the interbank rate, which is significantly lower than the widely used parallel market exchange rate. We have the capacity but with the current pricing structure, that capacity will be not fully realized,” the executive added.

Hwange power plant consumes about 90 percent of locally produced coal. Makomo Resources, Hwange Colliery Company Ltd (HCCL) and Zambezi Gas are major suppliers of coal to the power plant. Apart from Zambezi Gas, Makomo, currently under judicial management and HCCL have of late been facing operational challenges

In 2020, Government set aside an agreement requiring ZESA to pay half of the coal supplies in foreign currency. The power utility and coal miners had agreed that 50 percent of coal be paid in foreign currency to support the miners, which needed hard currency to sustain operations in light of forex shortages that were prevailing at the time.

ZESA is being paid in foreign currency by some exporters, particularly mining companies and the deal entailed coal miners be partly paid in forex to support operations.

This relates to continuous recapitalization and procurement of spares, fuel, and consumables.

“ZESA is paying foreign currency to import power but it can’t pay local coal producers viable prices,” Carlos Tadya, an analyst with a local research firm said. “The authorities should start dealing with the price issue so that we can fully realize the impact of the new units.”

Energy and Power Development permanent secretary Engineer Gloria Magombo did not immediately respond to messages seeking comment on Tuesday.

Business weekly

Following the worst mine disaster in the country’s history, 50 years ago, Hwange Colliery Company (HCC) has remained true to its “reputation repair strategies” which include compensation and commemorations held to honour the miners on June 6 every year.

As scholar Steven Van Hook said in a 2010 publication, a crisis can be turned into an opportunity for good public relations.

A total of 427 miners died following a series of underground gas explosions while in a 5kmtunnel shaft at the then Wankie Colliery’s Number 2 shaft known as Kamandama.

It is a disaster that is difficult to forget.

However, 50 years is a very long time. Companies can easily forget or lose the historical significance of post crisis management.

The Kamandama Mine disaster commemorations held on Monday proved that while HCC has been holding commemorations consistently, the company according to widows “only remembers us once a year”.

Speaking to our news crew, Ms Senzeni Phiri, who lost her husband when her son, Mr Tapedza Makava was only two years old, said: “Before this day, we did not get anything, the company just gave us money every June, the last amount was $20 000.

“Other things we get once in a while include pots, plates and cups.”

Mr Makava added: “I struggled with my education because my mother wasn’t employed. In fact, I was a beneficiary of the Kamandama Mine disaster until the age 18 years after which my mother had to struggle with my education.”

Mr Hilton Papenfus, whose father was a manager at HCC when the explosions killed him, said: “I came here with my wife Gillian, my sister who was 12 years when the incident struck and my son.

We come all the way from South Africa to remember my father.

It is a way of reconnecting with my father and making sure we do not forget him.

Let us continue doing this so that future generations do not forget.”

These are real victims of the Kamandama Mine disaster.

For 50 years, they have carried the wounds of losing bread winners.

They have had to eat, sleep, dress, go to school and access medical care without their fathers and husbands.

Their cry for monthly allowances or increase in the annual payment is not unreasonable.

These widows must be remembered everyday and not for only one day.

Because the crisis is national, Government can assist where it can.

For example, the widows can get farms.

Indeed, HCC has done well to continue with commemorations for 50 years.

We must never forget Kamandama!

Zimbabwe’s story is incomplete without mention of this sad chapter in our history.

The Chronicle