Mining ZimbabweLatest Mining News, Policy and Industry Updates

Padenga expects to double gold output in 2022, backed by a US$29 million investment to start underground mining at Pickstone Mine and production from the newly reopened Eureka Mine.

Eureka, which returned to production last year after being shut down for 20 years, poured its first gold in July and achieved commercial production volumes in September. The mine hit its capacity seven weeks earlier than forecast.

“Gold production volume is expected to nearly double in 2022 from the production achieved in 2021. The significant contributor being Eureka Mine, which will contribute production for a full year at nameplate,” Padenga says in its 2021 full-year financials.

Padenga’s results show how its move to gold is paying off. Mining operations now account for 66% of revenue, while the crocodile and alligator business, once the company’s core business, now makes up the rest. In 2020, the mining business made up 57% of Padega’s revenues.

The board of Dallaglio, the company through which Padenga holds gold investments, has approved additional capital expenditure of US$29 million for the year. This will be spent to open underground mining at Pickstone Peerless Mine in Chegutu and on exploration.

The underground operation, on which US$18 million will be used, is expected to start feeding ore with attractive grades to the plant in the second quarter of 2023. Dallaglio will spend US$4 million on the Duchess Hill area in Chegutu, US$2 million on exploration and evaluation of assets and US$7 million on sustaining CAPEX.

“Gold prices are forecast to remain high for the foreseeable future. Dallaglio expects to realise higher average export retention in 2022 compared to 2021,” says Padenga CEO Gary Sharp.

Pickstone Mine returned to profitability in the second half of 2021, recovering from first-half losses caused by flooding at the mine’s high-grade open pits after excessive rainfall.

NewZwire

Caledonia Mining Corporation Plc  announces that Gordon Wylie has joined the board of directors of the Company as an independent non-executive director with immediate effect.

Mr Wylie holds a bachelor’s degree with Honours in Geology from the University of Glasgow, a Management Diploma from UNISA South Africa and a Postgraduate Diploma in Mining Engineering and Mineral Economics from Wits University, South Africa.

He has over 46 years’ experience in the mining industry in both mining and exploration geology. Between 1997 and 2005, Mr Wylie was part of AngloGold Ashanti Limited‘s senior management team where he was responsible for the company’s global exploration programs, mining geology and associated technical services, covering around 40 countries and 5 continents.

Since leaving AngloGold Ashanti, Mr Wylie has accumulated 16 years‘ board experience as a non- executive director, of which twelve were as Chairman at Lydian International Limited.  He is currently a non-executive director of Chaarat Gold Holdings Limited, which is listed on AIM (symbol: CGH), and a non-executive director of Silverton Metals Corp., which is listed on TSX-V (symbol: SVTN).

Commenting on Mr Wylie‘s appointment, Mr Leigh Wilson, Caledonia’s Chairman, said:

“I am delighted to welcome Gordon Wylie to Caledonia’s Board.  Gordon has a broad and diverse experience in mining geology as well as in corporate governance, compliance and capital markets on a variety of exchanges.

“As Caledonia continues to focus on new opportunities, we believe Gordon’s exploration experience in emerging mining jurisdictions will be invaluable in contributing to the Company’s growth and development.”

Commenting on his appointment as an independent non-executive director of Caledonia, Mr Wylie said:

“I am delighted to join Caledonia’s Board at this exciting time in the Company’s development.

“Caledonia has a strong track record of navigating the complexities of operating in Zimbabwe and delivering on its word with the successful commissioning of the Central Shaft and the associated ramp up in production. I look forward to being part of Caledonia’s Board and working with the team to support its continued growth strategy.“    

An influx of Chinese chrome smelters in Gweru’s light industrial areas has emerged as one of the biggest threat to the Midlands capital’s road infrastructure as trucks that carry raw materials routinely flout load limits leading to serious damage on the city’s roads, investigations have revealed.

Earlier investigations by The Standard in collaboration with the Information Development Trust (IDT), a non-profit organisation that supports journalists in Zimbabwe and southern Africa to investigate issues of corruption in the public sector and bad governance, revealed that the scramble for chrome, especially by Chinese miners had left a trail of destruction on the environment in many parts of the Midlands.

Some of the pits were abandoned as far back as 20 years ago and this has put the lives of villagers and their livestock in danger.

A follow-up investigation has revealed that the damage to infrastructure and the environment also extends to urban areas such as Gweru where trucks transporting chrome ore to smelters are blamed for the serious degradation of some of the city’s roads.

Some of the major Chinese companies with chrome smelting plants in Gweru’s light industrial areas are Jinan, Xi Yu and Almed.

From the smelting plants, the companies transport the metal in 12 tonne container trucks to Beira in Mozambique for shipment to markets mainly in China and Singapore.

This publication was shown extensive damages on Gweru’s Bristol Road, which city authorities’ blame on trucks transporting chrome ore to Jinan, Almed and XI YU smelting plants, among other operations.

The road is littered with deep potholes and motorists struggle to navigate the route.

Council was recently forced to repair a section of Bristol Road, now known as PamaChina, following an outcry from motorists.

The damage on traffic circles on the Gweru- Shurugwi road have also been blamed on the heavy trucks that carry loads beyond the statutory limits.

Trust Chinini, the Gweru City Council’s environment, works and town planning committee chairperson, said the Chinese chrome smelters were behind most of the damage to the city’s roads.

“The by-laws for Gweru say that the maximum tonnage for trucks that use roads in the (central business district) and those that lead to residential areas is seven tonnes,” Chinini told The Standard.

“There are clear sign posts on the roads, which carry this information to road users.

“However, the Chinese are using trucks with loads of between 20 to 30 tonnes. It is a cause for concern.

“As the environment committee we have talked about this at our caucus meetings.

“These are not documented.

“However, we are planning to come up with a way forward so that there is a resolution on that matter. We want them to repair the roads.”

He said the local authority had previously repaired the affected roads, only for the Chinese companies to damage them in a matter of days.

“The problem is that if we repair the roads today, in a few days’ time they will have been damaged again,” Chinini added.

“We are worried as Gweru because of the conduct of Chinese companies on our roads.

“The worst affected road is the one that comes from Shurugwi going up to Bristol Road leading to their smelting companies”.

Gweru Residents and Rate Payers Association director Cornellia Selipiwe said money that should be going towards service delivery was now being spent on fixing roads being damaged by the Chinese companies.

“There are so many roads that have been damaged by the Chinese trucks in Gweru,” Selipiwe said.

“We are worried as residents that money, which must go towards service delivery like water supplies, sewer reticulation and collection of garbage, will now be gobbled by rehabilitation of the roads.

“Our water pumping plant at Gwenhoro Dam needs major refurbishments and that huge amount of money now going towards repairs of roads damaged by the Chinese could have been used there seeing that council has financial constraints.”

Council spokesperson Vimbai Chingwaramuse said the local authority would this year spend $169 million on repairing roads damaged by the Chinese companies.

“This year we have a budget of $169 million to deal with the menace,” Chingwaramuse said.

“So this comes at a huge cost, thus affecting service delivery greatly.”

She said the local authority had resolved to stop absorbing the cost of repairing the damaged roads and the Chinese companies would in future be forced to pick the bill.

“We are going to invoke sections of the Town Planning Act to ensure they repair and adopt the roads for maintenance,” Chingwaramuse added.

“It’s mainly the roads that lead to the light industries.”

Selipiwe said council must come up with policies to ensure that companies whose operations cause damage to the city’s infrastructure are forced to contribute towards the necessary repairs.

“We expect corporate social responsibility from the Chinese companies, but sadly nothing has come out from them,” he said.

“We implore the city council to engage them seriously.”

Kudakwashe Titus Chitakure, a human resources officer for Xi Yu who is based in Gweru, said they were not allowed to talk to journalists.

Several attempts to get a comment from Jinan and Almed officials in Gweru were unsuccessful as officials ignored messages.

Zimbabwe National Roads Administration spokesperson Tendai Mugabe said although they were aware of the damage caused by overloaded trucks on Gweru’s roads, there was nothing they could do because the issue was outside their mandate.

“Yes we are aware, but our mandate is only limited to funding of road authorities to do road rehabilitation and maintenance,” Mugabe said.

Transport minister Felix Mhona said “restricted tonnage of goods must always be observed on our roads.”

Mhona, however, could not comment specifically about the Chinese chrome smelters in Gweru, saying he was not familiar with the issue.

A 2013 report by Parliament’s portfolio committee on mines and energy that investigated operations of Chinese chrome mining companies along the Great Dyke said most of them were in the habit of violating the law.

The committee said the Chinese companies had an “attitude of being untouchable and could operate above the law.”

“The Chinese created the impression within the community and in some government institutions that they were protected by someone in a very high office in government,” the report said.

“As a result EMA (the Environment Management Authority), the local authorities and the community were powerless to enforce or demand compliance of environmental and mining regulations.”

EMA admitted that the scramble for chrome had led to serious environmental degradation in the Midlands.

EMA said the unsustainable chrome mining along the Great Dyke was mainly driven by the lifting of the ban on chrome exports, rising prices for the mineral on international markets and the increased number of chrome washing and smelting plants in the Midlands.

Chinese companies, especially in mining, have of late come under fire for disregarding local regulations leading to extensive damage to the environment amid accusations that authorities pay a blind eye to the violations.

On February 18, the Chamber of Chinese Enterprises in Zimbabwe (CCEZ) issued an appeal to investors from the Asian country “to protect Zimbabwe’s natural environment and historical and cultural heritage.”

CCEZ was responding to mounting complaints about some Chinese mining companies in Zimbabwe, who are accused of displacing locals and encroaching into ecologically sensitive areas like game reserves, to set up mining operations.

The Standard 

THE laxity in the enforcement of environmental laws in the extraction industry has left communities living in mineral-rich areas exposed to enormous environmental damage, threatening livelihoods as well as domestic animals, investigations have revealed.

With no financial support from multilateral creditors like the International Monetary Fund, World Bank, and the African Development Bank, analysts and conservationists say Zimbabwe, which badly needs investment to stimulate the economy that suffered two years of contraction has been left desperate for fresh capital.

These areas include Ngezi, Darwendale, Maryland and Lembe/Mapinga.

New information gathered by this publication revealed that government’s quest to achieve President Emmerson Mnangagwa’s dream of a US$12 billion mining economy by 2023 has left vulnerable communities at the mercy of giant mining firms that are abrogating the “polluter pays” principle — a commonly accepted practice that those who pollute should bear the costs of managing it to prevent damage to human health or the environment.

Small-scale chrome miners in the area accuse the Chinese-owned firm Afrochine of failing to rehabilitate the environment following mining activities, investigations reveal.

A visit to the site revealed that both parties are negating their responsibility of reclaiming the environment with large disused pits, which the villagers say, are posing threats to their lives and livestock.

According to police reports in Darwendale, a minor drowned in one of the disused pits in December 2020 and livestock have been falling into the pits on a weekly basis.

Communities in the area have also expressed concern over the degradation of land by the foreign mining firm.

The environmental neglect

Companies in the extractive industry are guided by the Environmental Management Act (Chapter 20:27), which provides sustainable management of natural resources and protection of the environment, the prevention of pollution and environmental degradation, in mining.

According to the Act, “any person who causes pollution or environmental degradation shall meet the cost of remedying such pollution or environmental degradation and any resultant adverse health effects, as well as the cost of preventing, controlling or minimising further pollution, environmental damage or adverse health effects”.

Scores of small-scale miners operating on Afrochine claims insist that the rehabilitation of the environment after mining activities remains a responsibility of the chrome claim owner — Afrochine.

Despite this, Afrochine places the responsibility on the contractors.

“We are working on the Afrochine claims. We sell all our proceeds to them.

“Afrochine provides our blasting requirements, compressors, and de-watering pumps, if need be,” said Danmore, one of the small-scale chrome miners.

“In the case of any of the equipment developing a fault, or when perimeter fence collapse, who do you think should fix those things, it’s Afrochine.

“They own the claims, let them take care of the environmental degradation.

“After all, they are benefitting the most out of the mining activities done on the claims.”

However, Afrochine safety, health, environment and quality manager and public relations officer Pardon Kufakunesu said the miner who is registered to mine is supposed to rehabilitate the environment in accordance with certification papers from EMA.

“Afrochine Smelting has no chrome mines at the moment. It buys from other miners,” said Kufakunesu.

“Should the miners require assistance in acquisition of the certification from EMA the company is ready to assist in as much as they are also assisted in machinery and fuel requirements.

“We do, however, have our own claims. On these claims we give contracts to other miners to mine.

“But however, they follow the same process of acquiring the EMA certification and undertake environmental management in accordance with their mining activities,” he said.

According to media reports, government seized 77 chrome mining claims straddling over 2 000 hectares along the Great Dyke from locals and handed them over to Afrochine last year.

Accountability

The Environmental Management Agency (EMA) insisted that environmental accountability must take precedence for any mining activity to happen, but could not provide information into the indifference on the environmental rehabilitation standoff between the small-scale miners and Afrochine.

Section 269 of the Mines and Minerals Act states: “on or before the abandonment, forfeiture or cancellation of a registered mining location or not later than thirty days after the posting by the mining commissioner of the notice mentioned in section 272, the holder of such location shall fill in all shafts, open surface workings and excavations or otherwise so deal with them as permanently to ensure the safety of persons and stock”.

Simbarashe Machiridza, a legal expert, said according to legislation, in the event the claim holder fails to do what is set out in the Mines Act, he can be charged and face criminal sanctions including a fine or imprisonment for a period not exceeding one year.

He highlighted that the mining commissioner can also issue an order for the holder to perform his obligations to fill in pits as required by law within a specific time.

“If that order has not been complied with the holder can be charged with an offense and be ordered to pay a fine or be jailed for a period not exceeding two years.

“Legal remedies are there. The issue is whether there is adequate enforcement through the police or the mining commissioner,” Machiridza said.

Richard Ncube, an environmental lawyer said authorities should ensure the enforcement of laws while imposing stiff penalties that deter would-be offenders.

“The EMA Act is clear on what needs to be done in order to ensure that mineral host communities are protected.

“Communities have lost livestock and lives due to those dumps — they are simply death traps,” Ncube said.

“If there is no strong enforcement of the laws the law becomes redundant.

“There should be a functional rehabilitation or reclamation fund that helps in case of non-compliance.

“It makes economic sense for a company in Zimbabwe to pay fines than to cater for rehabilitation of the area.

“So, there is a need to revise the penalties.”

Desperation for investment

Farai Maguwu, a director at the Centre for Natural Resource Governance said because of poor enforcement of environmental regulations, most companies find it cost-effective to just abandon their mine dumps without following environmental regulations.

“Investors are well aware of the polluter pays principle, but it seems the Zimbabwe government is too desperate for attracting and retaining mining investors, hence environmental issues are not a priority,” Maguwu said.

“Because the government places mining above everything else, including the environment, polluters enjoy state protection and impunity.”

Maguwu said fines must be reviewed upwards so that companies won’t find it easier to pay fines than to comply with the regulations.

He highlighted that the current penalties were “not strong enough and deterrent”.

“There is no doubt that multinational and foreign companies understand the polluter pays principle, the major challenge is failure to respect the law in place,” Maguwu said.

“When companies get to a country, they are guided by the way of doing things in that country.

“As a country, we simply have to change our culture and how we treat mining companies.”

Other cases

Last month, three foreign-owned mines De-Troop Jiangxi Risheng, Morocco 7 Mine and Take 25 were fined for polluting the Angwa River, a major water source in Mashonaland West province according to EMA.

This followed compliance inspections that identified environmental violations in the handling of cyanide, discharge of mining effluent and the absence of spillage contingency strategies.

De-Troop, which is run by Chinese firm Jiangxi Risheng Mining Company, is situated along the Angwa River, about 170 kilometres north-west of Harare in Makonde district.

Apart from operating without an environmental impact assessment (EIA) certificate as required in terms of section 97 of the Environmental Management Act (Chapter 20:27), Morocco Mine was found in possession of 100kgs of cyanide.

According to EMA, Take 25 Mine had no valid EIA certificate and hazardous substances storage and use licence was ordered to submit a progress report on de-contamination and engagements with the local community.

Government is currently amending the Environmental Management Act to strengthen the regulations by providing for the comprehensive protection of the country’s environment in a manner that ensures sustainable development, Cabinet minutes reveal.

According to the minutes, the proposed amendments will see the imposition of deterrent penalties for non-compliance with orders issued by EMA officers or inspectors, including civil penalties in addition to the criminal sanctions.

The Standard 

THE chief executive officer (CEO) of Tsingshan Investments Zimbabwe revealed this week how his firm has located immense opportunities in Zimbabwe, where it plans to weave around a string of corporate steel graveyards to generate billions of United States dollars.

Tsingshan is executing its Zimbabwean ambition through Dinson Iron and Steel Company (Disco), which has the mandate to deliver a US$1,5 billion steel plant in Chivhu, part of a massive empire whose influence would extend to Manhize, Midlands, where an integrated operation will be established.

From here, the Chinese firm says it wasworking out a plan to conquer the African steel market.

“In Africa, Dinson Iron and Steel is incomparable.”

He said Disco  saw opportunities in Zimbabwe where scores of steel firms have collapsed in the past decade.

Xu said they estimated to pay US$300 million in annual taxes. In addition, he said they were projecting that their annual output would be enough to offset US$2 billion being spent currently on steel imports.

Troubles in the steel industry resulted in Zimbabwe importing 90% of its steel requirements.

The huge import bill costing the country US$2 billion a year is really unacceptable in a country with reserves expected to last 200 years.

“The closure of Ziscosteel saw downstream companies closing shop or operating below capacity and with scarce foreign currency, some of the steel companies are scaling down operations in Zimbabwe,” Xu said, as he narrated the extent of opportunities that lie unexploited on the domestic resource market.

“Iron and steel companies are importing 90% of key steel raw materials for their steel works.

“Therefore, opening of Disco will close the gap of steel deficiency in Zimbabwe,”he said.

Xu said an explosion of infrastructural developments in Africa has ignited appetite for steel products, which his firm would be able to meet.

“The market is huge in Zimbabwe and even more in Africa where there is a boom of the construction and infrastructure development industry,” he said.

“As a company, we cannot satisfy the local demand. Even in regional markets, in China our parent company requires millions of tonnes of steel and we cannot provide what it requires, so the market and demand is huge.

“In Africa Dinson Iron and Steel is incomparable with steel players because the production will be massive, twice more than the Zisco (which is closed). Most of the steel players in this country (are involved in) scrap metal recycling.

“We cannot compare with natural iron ore of high grade mined in Manhize. Worldwide, yes, there are major players but we are there, we are competing with other world players,” Xu added.

Tsingsha Holding Group is the world’s largest stainless-steel and nickel producer.

The company has a footprint across the world, with production bases in China, Indonesia, India, the United States and now in Zimbabwe.

The company has built a 150 000 tonne per year ferrochrome plant in Selous Chegutu District and a 350 000 tonne per year coke plant in Hwange and is currently constructing a US$1,5 billion Dinson Iron and Steel Plant in Mvuma-Chivhu.

In April 2018, President Emmerson Mnangagwa visited China, where Tsingsha boss held talks with him, expressing their intention to continue to expand its investment in Zimbabwe.

In June 2018, in the presence of Mnangagwa and secretary of the Zhejiang Provincial Party Committee Che Jun,  Tsingshan Holding and the Zimbabwe government signed an MoU to build an iron and steel plant in Zimbabwe with a total investment of US$1,5 billion, undertaking to value-add chrome ore to produce ferrochrome, to value-add to coal to produce metallurgy coke, to value-add iron ore to produce carbon steel and to beneficiate mineral resources mined in Zimbabwe.

“Dinson Steel Industry Park will have an annual turnover of US$2 billion from both exports and domestic markets. A total of 10 000 people will be employed directly and over 50 000 people will be indirectly employed,” Xu said.

“Already a concept master plan for the new town is now in place, which is adjacent to the steel plant. This investment will go a long way in Zimbabwe’s economic growth take-off.”

The Independent 

Hwange Colliery Company Limited (HCCL) Managing director Dr Charles Zinyemba has passed away.

A senior HCCL source has confirmed the sad news.

Condolence messages have started pouring in on various Mining platforms with many expressing shock at his passing.

More to come…

The amendment of the Mines and Minerals Act will deal with organized cartels that have been involved in illicit financial flow and smuggling of minerals from the country, Chairperson of the Parliamentary Portfolio Committee on Mines and Mining Development Hon Edmond Mkaratigwa has said.

Rudairo Mapuranga

The sentiments have come after Executive Director of the Centre for Natural Resource Governance (CNRG-Zimbabwe) Mr Farai Maguwu said the government was losing close to US$20 billion due to organized crime in the mining sector.

Maguwu said smuggling levels in Zimbabwe had escalated in 2022 as compared to 2008 where the then governor of the Reserve Bank of Zimbabwe (RBZ) Dr Gideon Gono said the country was losing $14.4 billion annually to diamond smuggling alone back in 2008.

“If mineral smuggling was a problem in 2008, it has reached pandemic levels in 2022,” Maguwu said.

There have been reports that the diamond and gold sectors have been captured by organized criminal cartels, most of whom use airplanes to smuggle the minerals from the country.  Reports have indicated that there is a criminal syndicate called IE&C which smuggle diamonds to South Africa for onward exportation to Britain.

In 2003 retired businessman Ian Macmillan, his son Ewan, pilot Clair Burdett and mining director Collin Rose appeared in court accused of smuggling about $68-million (about R436-million) of gold to SA through a “well-organised” crime syndicate. They were accused of smuggling almost 7 500kg of gold through a crime syndicate called IE&C.

Hon Mkaratigwa said the Mines bill was going to deal with informal mining as informal miners have been accused of selling their productions to the informal market.

“Definitely these criminals are organised and what we are doing as Parliament is to unclog as much as possible, all potential loopholes. At law, the Bill seeks to achieve that through reducing informal mining operations as much as possible. Informal mining is a choice but to some it has been just an alternative due to de-motivations against the formal system. That is why legally, we are working on unblocking that,” Hon Mkaratigwa said.

The Chairperson of the Parliamentary Portfolio Committee on Mines and Mining Development also said that the government was going to deal with institutional loopholes that allowed cartels to loot and smuggle the country’s minerals.

“On the other hand, there are institutional loopholes which we can call technological solutions and requisite expertise as well as adequate human resourcing, which can tackle that. These issues are critical at our territorial gateways where these precious minerals are mostly passing unnoticed. We have also advanced aspects related to training of personnel involved in mineral handling at all levels in the country, so that they are capable of identifying these resources and make it easy to also reduce their illegal movement among and through the population. In that respect we have made an inquiry into that, and identified gaps we have recommended to the government for implementation, and we are following up on that, while the other report that is almost ready, contains further recommended solutions in that respect.

“Another problem we identified was on intergovernmental institutions interoperability and there, we have identified gaps. There are limited synergies as the agencies have been working within a silo mentality with less cooperation. As a result, skills with one department have not been benefitting the whole but departmentally, at operational level. We have recommended redress against such,” he said.

Mkaratigwa said Parliament has been working flat out to see that the problem of mineral leakages has been dealt with once and for all with different stakeholder consultations done to achieve a crime free mining sector.

“A lot has been happening, but the bottom line is what the government sought to achieve through NDS1, which are overall the best conditions for business, be it small or big. We have also used various means to that end and enforcement of existing legislation is also key. Parliament has often called the various government departments to account in that regard and through different tactics, we have harnessed existing efforts towards the benefit of our great country.” Mkaratigwa said.