Mining ZimbabweLatest Mining News, Policy and Industry Updates

Kibo Energy plc, a UK renewable energy company listed in London and Johannesburg, has acquired the 100MW Victoria Falls Solar Park project for US$13 million.

The first 25MW of the project is fully funded and under construction, with the first 5MW expected to be in production by end of April 2022. The 25MW is to be connected to the grid by year-end.

Kibo is buying the project through a share purchase agreement with Brownhill, the company that was developing the project via its subsidiary Power Ventures.

Kibo, which has previously had interests in coal mining, has been moving away from fossils to invest in renewables, and CEO Louis Coetzee, says the Victoria Falls deal ties in with its strategy.

“We are pleased to have been in a favourable position to participate in this transaction, which is timely, following the company’s strategy to disinvest from fossil fuels and focus on renewable and clean energy projects,” Coetzee says.

“The successful completion of this Transaction will scale up Kibo’s footprint in Africa, with the potential addition of renewable energy projects in excess of 100MW with the first 5MW going into production at the end of April and the first 25MW fully funded for construction and commissioning.”

It is connected to the Hwange-Victoria Falls national transmission line, less than a kilometre from the solar facility.

On completion, the project will generate 100 MW of solar power, and is projected to deliver free cashflow (EBIT) of around US$107 million, according to the company.

Chasing solar

In 2020, government invited bids for the installation of 500MW of solar power plants, hoping a shift to renewable energy will help ease crippling power cuts. But investment into Zimbabwean solar has been slowed by investor doubts that they will be paid in US dollars for supplying power. Government is reluctant to issue IPPs the guarantees they demand.

The Victoria Falls project, however, has a 10-year power purchase agreement denominated in USD, and it will supply mining and industrial customers.

Kibo, has invested in coal assets before, including a 300MW coal-to-power project in Tanzania and Mabesekwa in Botswana. But it is shifting to renewables, with one of its most recent new projects being a 2.7MW plastic-to-syngas power plant in South Africa.

The company’s acquisition strategy has been to target projects that are near production; its renewable energy assets all have a time horizon of less than 18 months to first production.

NewZwire

PROSPECT Resources’ wholly-owned subsidiary, Promin Resource Holdings Ltd, has acquired a potential high-grade lithium deposit located approximately 8km north of Arcadia Lithium project, the parent company has revealed.

According to the company’s half year financial results for the year ended December 31, 2021, an exploration programme is underway.

“The Step Aside claim comprises approximately 140 hectares and is located in the Harare Greenstone Belt, west of the Mashonganyika Fault. The potential of the area has been confirmed by positive regional stream and soil sample geochemistry results.

Four mineralised pegmatites have been mapped from east to west within a meta-dolerite host rock. These mineralised pegmatites are all roughly parallel to each other, lying in a north-south orientation and have dip angles of 40-45˚ to the west.”

The company revealed that an exploration programme is underway, with the commencement of rock chip sampling and if successful a trenching and drilling exercise to help with determining the sub-surface strike extensions.

“This will provide greater detail as to the thickness and strike length of any potential underlying pegmatite,” it said.

On December 23, 2021, the Australia–listed mining concern announced that it had, through its 100% owned subsidiary Prospect Minerals, executed a binding share sale agreement with Huayou International Mining (Hong Kong) Limited, for the sale of its 87% shareholding in Prospect Lithium Zimbabwe, owner of the Arcadia lithium project.

Huayou agreed to purchase Prospect Minerals’ 87% shareholding in Prospect Lithium Zimbabwe and associated intercompany loan for approximately US$377,8 million in upfront cash consideration.

Meanwhile, for the period under review, the company recorded a loss (including that incurred by the discontinuing operations) of A$2,4 million compared to A$1,2 million realised in the same period in 2020.

Also, it had net cash outflows from operating and investing activities (including those used in discontinuing operations) of A$5 018 000.

As at reporting date, the firm had cash and cash equivalents of A$20,1 million including the cash holdings within the disposal group classified as held for sale of A$212 000.

Prospect Resources Arcadia Lithium Deposit has been identified as a priority mining development project by the government.

The company’s lithium project has been identified as one of those key projects in Zimbabwe that can help turnaround the economy.

Newsday 

Blanket gold mine in Gwanda, Matabeleland South Province, expects to save at least US$3 million per annum in electricity costs when its planned 12-megawatt solar power plant comes on stream in July, parent company Caledonia mining has said.

The power plant is expected to provide approximately 27 percent of the mine’s average daily electricity needs, reducing Blanket’s reliance on the national grid.

To reduce the effects of power cuts on operations, Caledonia chief financial officer Mark Learmoth said Blanket was also using diesel generators.

But, he said, the company had incurred huge costs to run the generators.

For example, last year Blanket spent nearly US$4 million on diesel, up from less than $2 million the previous year.

“But it is not just a cost issue, it (running generators) has environmental concerns and from a logistical point of view just getting your hands on that amount of diesel is quite tricky,” Learmoth said, commenting on the company’s full-year results released on Thursday.

“The only operational problem we really face in Zimbabwe is a shortage of power and that is not a Zimbabwean problem alone, it is Zimbabwe, South Africa, and the whole (Southern Africa) region.

“So the solar project will be up and running by end of June this year. It will provide just over a quarter of Blanket’s daily requirements, and it will save blanket nearly US$3 million a year in electricity costs which equates to about US$35-$40 an ounce, about 5 percent of our on-mine costs.”

In August last year, Caledonia announced it had awarded Voltalia, a French-based renewable energy company the contract to construct the solar power plant.

Caledonia raised US$13 million via the sale and issue of 597 963 shares in the company for the solar project.

Learmoth said the solar plant would also reduce Blanket’s ecological footprint.

“It is a great step forward and already we are now evaluating a second phase project to further increase the size of the solar project to reduce our reliance on diesel and grid even further,” he said.

Despite the power challenges, Caledonia recorded US$54.1 million profit in 2021, a 16 percent increase from the previous year on the back of record annual gold output at Blanket mine.

Buoyed by a new US$67 million central shaft which was commissioned in the first quarter of 2021, output rose to 67 476 ounces from 57 899 ounces.

Caledonia chief executive officer, Steve Curtis described last year as a turning point for the business whose revenue grew from US$100 million in 2020 to US$121 million in 2021.

The company has acquired new claims as it pursues plans to become a multi-asset gold producer.
New Ziana

A MINER died after he suffocated in a shaft that he was working in.

Police on their twitter page confirmed the incident which occurred at Durban Mine in Nkayi.

“Police are investigating circumstances surrounding the death of a man (32) who allegedly died in a disused mine shaft at Durban Mine, Nkayi on 15 March. It is alleged that the victim together with two others went to the mine to extract gold ore.

“The victim was lowered into the mine shaft where he is believed to have suffocated due to carbon gases. The body was retrieved from the shaft and had blood dripping from the mouth and it was referred to Inyathi Hospital for post-mortem,” said the police.

The Chronicle

Zimbabwe’s lithium mines are being sold for a song by foreign investors to Chinese multinationals, who have recently swooped on domestic assets, analysts said on Friday.

They said with international lithium prices rocketing and the mineral being declared one of the most strategic commodities, Zimbabwe’s Parliament must take a lead in making sure future generations will not be prejudiced.

This marked a gain of over 75% so far in 2022.

Lithium is used to make batteries for electric car vehicles.

In the past few months, multinationals have pounced on three lithium mines in Zimbabwe for US$610 million.

But analysts said the assets were worth more than the what the Chinese were paying for the lithium mines.

“We have raised this issue, yes.

“To us the government has not yet put in place a proper policy framework on mineral resource governance that allows maximising on benefits from our minerals,” Zimbabwe Coalition on Debt and Development (Zimcodd) Janet Zhou told Standardbusiness on Friday.

“This includes the strategic minerals like lithium which are the future.

“China is investing big time in this strategic mineral,” she said, noting that major car makers were turning to electric vehicles, which require lithium.

Chinese miner, Sinomine Resource Group Co. Ltd (SRGCL) is in the process of acquiring Zimbabwean lithium miner, Bikita Minerals for US$180 million.

Zhejiang Huayou Cobalt Company Ltd, a Chinese firm mainly engaged in the research, development and manufacturing of new energy lithium battery materials, took over the Arcadia mining project for US$378 million last December.

Shenzhen Stock Exchange-listed Suzhou TA&A Ultra Clean Technology Co. Ltd bought shares worth about US$15,7 million from Premier African Minerals, a Zimbabwe-focused miner that is developing the Zulu resource near Bulawayo.

Suzhou TA&A Ultra Clean Technology Co. Ltd is a China-based company principally engaged in the research, development, production and sale of anti-static ultra-clean products.

“There is no natural interest in the manner in which the government is entering into deals with so-called investors.

“When you look at Arcadia Mine, when Prospect Resources sold to that Chinese company, the President (Emmerson Mnangagwa) actually presided over that more than US$400 million transaction,” Centre for Natural Resource Governance (CNRG) director Farai Maguwu, said.

“Yet, that never went to the Treasury.

“It is one private company that made US$400 million out of a national asset without the government getting a penny…

“It was the most foolish transaction and unheard of.

“The lithium belongs to the Zimbabwean people, but it was acquired by a private company that sold it to another private company with the president presiding over the takeover,” he said.

“Our leadership has no time to concern themselves with those matters.

“All they want is to fund the 2023 election and put something in their pockets.

“These lithium deposits, they don’t care about them.”

On the argument that the Zimbabwe government has no say over deals involving private firms in mining, Maguwu said: “That doesn’t make sense.

“First of all, the minerals are vested with the president, who shall hold them in trust on behalf of the Zimbabwe citizens.

“We have got a Parliament, which has been rendered redundant and useless yet it must play an oversight.

“The fact that the government is not allowing Parliament to play its oversight role clearly indicates stinking corruption because they know the deals are so terrible, they are very bad, which is why they do not even publish the contract”.

Zhou said a policy framework must be put in place and that the Mines and Minerals Bill must be passed to address some of the issues being raised over lithium mines.

“It (the Bill) has all the provisions to protect, benefit, and control our strategic minerals,” she said.

According to Platts Analytics, global plug-in light-duty electric vehicle sales are expected to rise to 6,5 million units in 2022 and 10,5 million units in 2025, up from an estimated 6 million units in 2021 and 3,1 million units in 2020.

The Standard 

GROSS revenue at Caledonia Mining Corporation rose by 21% to US$121 million during the year ended December 31, 2021 after it reported its biggest gold output.

Caledonia operates Gwanda-based gold producer Blanket Mine, which has been on an aggressive expansion drive over the past five years.

According to its operating and financial results for the year ended December 31, 2021, gross revenue during the same period in 2020 stood at US$100 million.

The project was funded through internal resources.

“Production in the year was 67 476 ounces, which was above the top end of the guidance range and was a new record for annual production,” he said.Curtis said the robust operating performance was supported by good cost control.

Gross profit for the year was US$54,1 million, 16% higher than 2020.

Cash generated from operations before working capital increased by 17% from US$42,4 million to US$49,6 million.

“Now that the central shaft is commissioned, we expect further increases in production.

Guidance for 2022 is a range of 73 000 to 80 000 ounces while from 2023 onwards it is 80 000 ounces — 38% higher than in 2020,” he said.

The aim is to improve the quality and security of Blanket’s electricity supply, minimise environmental footprint and help create a more sustainable future for the business.

Curtis said Caledonia was constructing the first phase of a 12MWac solar plant that would provide approximately 27% of the average daily electricity demand at Blanket Mine.

This project, which is expected to yield a modest return for shareholders, is expected to be completed this year.

He said their immediate strategic focus was to complete the remaining underground development associated with the Central Shaft project, which is expected to increase production, reduce operating costs and increase the flexibility to undertake further exploration and development at depth, thereby safeguarding and enhancing Blanket’s long-term future.

“We also believe there is excellent exploration potential in the older shallower areas of the mine and in brownfield sites immediately adjacent to the existing Blanket footprint.”

He said Caledonia continued to evaluate further investment opportunities in the Zimbabwean gold sector with a view to transform the company into a mid-tier, multi-asset Zimbabwean-focused gold producer.

Newsday

CANADA based miner, Zephyr Minerals Limited, is set to acquire four gold mines in Zimbabwe.

In a statement to shareholders this week, the company said it had “investigated 12 potential gold projects throughout” the country over the past seven months.

“Management has concentrated on projects with proven gold potential as demonstrated through active, shallow, small scale mining operations or previous exploration work, and based on property size, the ability to host a target potential of at least one million ounces of gold,” reads the statement.

“Based on these parameters, of the 12 properties evaluated, four high priority gold properties are being aggressively pursued for acquisition/joint venture.”

Company President and CEO Loren Komperdo added; “Our investigations to date confirm the merits of our strategy to pursue gold opportunities in Zimbabwe.

“We remain firm in our view that success in project generation in Zimbabwe will provide our shareholders with exposure to gold projects with company transformative potential.”

The Company staked and registered two Special Blocks totaling 201 hectares for gold and base metals in the north-eastern part of Zimbabwe’s Umkondo Basin.

It has also lodged applications with the country’s Mines Ministry for two Exclusive Prospecting Orders (EPOs) in the Nyanga area as well as in the Mount Darwin West area.

Apart from Zimbabwe, Zephyr Minerals’ flagship operation is its Dawson Gold Project in Colorado, USA.

It becomes the latest Canadian mining company to target Zimbabwe after Caledonia Mining Corporation which operates the Gwanda-based Blanket Gold Mine.

New Zimbabwe