Mining ZimbabweLatest Mining News, Policy and Industry Updates

POLICE have arrested nearly 11 000 people for illegal mining activities across the country since January this year under an operation targeting illegal miners and people carrying dangerous weapons.

Police last year launched Operation Isitsheketsha Kasiphele/Chikorokoza Ngachipere/No To Machete Gangs.

National police spokesperson Assistant Commissioner Paul Nyathi said in a statement yesterday that the police blitz has since January this year netted 10 804 for illegal mining activities or carrying dangerous weapons.

The police blitz was in response to reports that gold panners were terrorising villagers in the different communities where they were operating.

One of the affected areas was Malungwane Village in Umzingwane District, Matabeleland South Province where the panners had unleashed a reign of terror. The panners were attacking villagers with axes, machetes and knobkerries.
This saw family members sleeping in maize fields fearing being attacked at their homes.

Meanwhile, Asst Comm Nyathi said police have also arrested 120 042 people for various cross border crimes across the country since January last year.

“Police arrested 497 under the operation No to Cross Border Crimes/Fhasi Ngamilandu Yamukanoni Yamashango/Mhosva Pamiganhu Ngadzipere/Amacala Kawaphele Emigceleni Yelizwe this year. The cumulative number of arrests since January last year is 120 042 people,” said Asst Comm Nyathi.

Smuggling has been problematic in the country as people are taking advantage of the porous borders.

A trucker was recently arrested in Beitbridge after smuggling in 21 refrigerators.

Asst Comm Nyathi said police also arrested 2 409 people for various offences related to Covid-19 last Sunday.

The Chronicle

Zimbabwe’s mining industry is engaged in discussions with the government over the punitive tax burden and retention levels, the Mines and Mining Development minister Winston Chitando has said.

Miners have been pushing for an option to pay all taxes in local currency to enable  companies to have sufficient foreign currency to meet operational and expansion needs.

Chitando said discussions with the Ministry of Finance and Economic Development were currently underway, with the view to ease the tax burden and review retention levels.

“There is a discussion on what is called a consolidated mining physical structure and that’s a discussion the Ministry of Finance is working on so as to ease the tax burden on miners,” Chitando told BusinessTimes on the sidelines.

“Large scale gold mines have been complaining that retention is not sitting well with them. However, the issue of the foreign currency retention is an ongoing discussion all the time and the government is sensitive to that and now and again you will find that there are always changes which are tailor made to ensure that  we sustain our industry.”

Added Chitando: “As of now, discussions to address the issues are currently taking place with input from the Chamber of Mines.  However, I can’t give timelines.’’

Efforts to get a comment from the Chamber of Mines of Zimbabwe were futile.

The government is hoping that the mining sector will help revive the economy.

President Emmerson Mnangagwa’s administration has set an ambitious target to grow revenue from the sector to US$12bn by the end of next year.

The government has set a target of achieving a gold output of 100 tonnes.

Having achieved 30 tonnes last  year, Chitando  is confident the mining sector  will meet the 100 tonnes target, banking on the performance of the big mines.

‘’On the 2023 gold target of 100 tonnes we are very confident. This year we are targeting at least 50 tonnes. Towards the end of last year, the monthly deliveries were actually getting closer to 4 tonnes so we are on course,’’ Chitando said.

Last year, the mining sector generated a record US$5.2bn in export earnings, compared to US$3.2bn in 2020, on the back of firming commodity prices.

In the outlook for 2022, anticipated global economic recovery is expected to be accompanied by favourable commodity prices.

Business Times

In under two years’ time, Zimplats will hit a key milestone on the long path to local beneficiation; it will no longer have to send platinum concentrates to South Africa for smelting.

The company has laid out a US$1.8 billion expansion plan, part of which involves expanding processing capacity in Zimbabwe. Smelting more platinum locally is a step towards staving off a government tax on the export of unprocessed platinum.

The company is investing US$521 million to expand smelter capacity, which will be fed by new mines and redevelopment. The first platinum matte is scheduled from January 2024 while the acid plant commissioning is expected in August 2024, according to Nico Muller, CEO of Zimplats’ holding company Implats.

A new concentrator – which turns ore into the raw materials for platinum extraction – will be completed this year. Zimplats currently has two concentrators at Ngezi and Selous.

“Construction of a third concentrator is well advanced, and we are very confident of commissioning that concentrator before September this year, and the commissioning of all the infrastructure for increasing production is similarly – it happens over a longer time period – on track and on schedule,” Muller told an investor call on Tuesday.

While Zimplats exports platinum mattes, Mimosa, in which Implats has a 50-50 share with Sibanye Stillwater, ships its concentrates to South Africa for smelting. The new capacity being built now will see all smelting – from Zimplats, Mimosa and possibly other producers – being done locally.

“What that will do is give us an opportunity to smelt Zimplats as well as Mimosa concentrate in Zimbabwe, and therefore qualify us for a dispensation against the export levies for unbeneficiated concentrate,” Muller said.

“We will be independent in Zimbabwe from the South African operations. It does then, obviously, with the removal of the Mimosa concentrates from our Rustenberg furnaces, create headroom in Rusternberg.”

According to Gerhard Potgieter, Implats Chief Operating Officer, Zimbabwe is a key asset for Implats and expanding smelting capacity makes sense.

He said: “One of the reasons why we have agreed to increase that capacity in Zimbabwe is that Zimbabwe is our playground, we know how to mine there, we know how to make money there. So, it just makes sense for us to also beneficiate there.”

Amplat’s Unki launched a US$60 million smelter in 2019 and has invested a further US$40 million to expand capacity there, which will increase output by 30%.

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Good, but not yet good enough

However, a base metal refinery (BMR), which comes at the end of the production chain, is still what government sees as the ultimate prize in its push for local beneficiation.

Government, in its policy document NDS1, insists that “moving up the value chain will ensure Zimbabwe benefits more from the PGMs through job creation and foreign currency earnings”. It says a penalty tax is necessary “to dissuade exportation of concentrates and matte and ensure adherence to set timelines for the establishment of the BMR”.

Industry players say there is not enough output yet to justify the investment in Zimbabwe.

In a letter to Treasury in January, Alex Mhembere, CEO of Zimplats and head of the platinum producers association, asked government to further postpone the tax on unprocessed platinum. He said a report commissioned by platinum producers has recommended that miners build a combined base metal refinery.

“The BMR project will have capacity to accommodate local PGM base metal refining,” he wrote.

Countries in the region have been involved in similar battles for local beneficiation, and some have had to offer generous tax breaks to make it happen.

In 1997, Mozambique agreed with Mozal Aluminium on the building of a smelter by offering the company a 50-year tax holiday. The concession means the company, 72%-owned by BHP spin-off South32, is paying 1% turnover tax. Mozal also gets power at a discounted rate.

In Namibia, zinc refinery projects in the south of the country rose after they were granted export processing zones status, exempting them from company tax.

Newzwire

UK resources investor Galileo Resources is to start exploring for lithium and gold in Zimbabwe after being granted the option to acquire 51% of a local prospecting firm.

Galileo, listed in London, will spend US$1.5 million to explore for lithium and gold at claims held by BC Ventures over the next two years.

BC Ventures’ unit Sinamatella Holdings was one of the companies granted Exclusive Prospecting Orders in March last year. Sinamatella holds an EPO for a potentially lithium-rich area in Kamativi, as well as another two EPOs for two gold areas near Bulawayo.

Colin Bird, an industry veteran, owns Galileo, which is also prospecting for various mineral assets across the region, including copper and zinc in Zambia and Botswana as well as rare earth minerals in South Africa.

This will be the company’s first time in Zimbabwe.

“This is a significant investment for Galileo, in that we have an option to acquire a controlling interest in what we consider a highly prospective lithium project in Southwest Zimbabwe,” Bird said in a statement on Monday.

The lithium prospect is near the Kamativi tin mine, where a joint venture of the Zimbabwe Mining Development Corporation and Canada’s Jimbata is working to treat old tailings dumps to seek out lithium-bearing minerals.

Bird believes the data available from that project gives his company a good chance to strike lithium.

He said: “The project is adjacent to the Kamativi mine, which produced tin for many years, closing in 1994. The pegmatites in the area are known to contain lithium-bearing minerals, as well as tantalum and tin and the pegmatites will be the focus of our exploration programme.”

Galileo will be hoping to have as much good fortune as other lithium prospectors have had in Zimbabwe recently. In December, China’s Huayou announced a deal to buy the Arcadia lithium project from Prospect Resources for US$422 million.

In February, Sinomine Resource said it was spending US$180 million to buy a controlling stake in Bikita Minerals, Zimbabwe’s oldest lithium producer.

Newzwire

A LEADING resources campaigner has claimed that Zimbabwe’s elite are reluctant to push through amendments to the Mines Act, a 60-year-old legislation that has outlived its usefulness.

The Zimbabwe Coalition for Debt and Development (Zimcodd) added its voice to discontentment over delays in passing the 2015 Mines and Minerals Amendment Bill, saying politicians were benefiting from the status quo.

The Bill seeks to shift the industry’s terrain by improving several sections that were relevant when the present legislation was enacted in 1963, but have been overtaken by events.

It contains provisions to resolve farmer-miner disputes, along with regularising artisanal mining, among others.

“The ills associated with the mining sector in Zimbabwe are largely blamed on delays in the finalisation of the Mines and Minerals Amendment Bill,” Zimcodd said in its latest policy digest.

“The reasons for the delay are sketchy yet all due processes were done including public consultations which were conducted as far back as 2016 during the (late former President Robert Mugabe)’s administration. Now, six years down the line, it is still work in progress. There is a high likelihood that there is lack of political will on the part of the Executive to ensure the Bill is finalised,” it said.

The Bill came into the picture following extensive campaigns to amend the Mines and Minerals Act, which many felt lacked provisions to stem rampant mineral revenue leakages, and was replete with opaque licensing regimes that propped up big players. Those pushing for radical changes said the 60-year-old Act promoted poor tax and royalty flows into State coffers, while perpetuating corruption and human rights violations.

In January, Chinese firms confirmed that there were serious legislative flaws, which they have been using as a weapon to displace Zimbabwean villagers to set up operations. Justice minister Ziyambi Ziyambi recently said that the Bill would be re-tabled in Parliament before being passed into law.

But mining representative bodies are planning to petition both Mines and Mining Development minister Winston Chitando and Parliament to stop the reading. They said while consultations took place before the President turned down the Bill in 2020 and returned it to the Attorney-General’s office, it may have had changes that required fresh consultations.

“This raises concern whether the government is willing to amend the Mines and Minerals Act or not. This is aggravated by the fact that, word from the mining industry is that the Justice, Legal and Parliamentary Affairs ministry is now more concerned about the statutory instrument that seeks to formalise artisanal and small-scale mining than the Bill,” said Zimcodd. “This is worrisome, as it might also imply that the government is satisfied with the provisions in the Mines and Minerals Act.”

The Bill has clauses and provisions that are essential in unlocking the US$12 billion mining industry which will result in a 334% jump from the current US$2,9 billion mining industry.

Newsday

FORTUNE 500 company, Tsingshang’s massive steel and ferrochrome production plant is taking shape near Zimbabwe’s mining town of Mvuma, Standardbusiness established last week.

The operation is being established by Dinson Iron and Steel Company (Disco), which is a unit of Tsingshang.

It is on track to produce its first steel early 2023, although officials say there have been significant delays due to Covid-19 induced hard lockdowns.

At peak, the operation will have capacity to produce five million tonnes of iron ore annually.

Buildings are emerging out of thick forests, where staff houses, warehouses and a cement mixing plant are nearing completion.

The company has secured licences and approvals to exploit vast iron ore claims in the area where an industrial park and downstream industries will be established.

The industrial park will be larger than nearby Mvuma on completion, officials said on Wednesday, allaying fears 90 families to be displaced would be left stranded.

A dedicated power supply line has already been established while construction of a railway line and dam is being considered for the project.

Roads are being rehabilitated with a number of bridges also expected to be replaced.

Some of these have already been relocated.

During a tour of the project, Disco public relations manager, Fanuel Utete said work to establish the first of the firm’s five furnaces was under way.

“On phase one, we will have five furnaces,” he told Standardbusiness.

“At this stage, we will be producing 1,2 million tonnes of ore annually. But we will go further to operate 12 furnaces and produce five million tonnes of ore annually.

“This is very possible. The company has capacity and high quality ore is available.

Disco will be spending an estimated US$10 000 on each of the affected families to construct houses.

“I have never been employed in my life and now I own a house that is much better than the one I had.

“I am earning a stable income and able to decently look after my family,” said Wisdom Chimhuka, one of the resettled villagers.

“I have been staying in a temporary structure since last September and my house will be complete (this week).

“They cleared land for us to plant maize and we expect our relatives to join us on this side soon.”

It is one of a few cases where Zimbabweans have said they have been treated well by Chinese investors, who have recently come under fire for a string of transgressions.

Across Zimbabwe, villagers face the threats of being displaced by Chinese investors to make way for mining operations.

Graves have been destroyed, and delicate environments have been trampled on.

“All general or unskilled labour is being hired from the community, this is their project and they are a part of it all the way,” Utete said.

However, the project has been affected by shipping delays caused by the Covid-19 pandemic.

Tsingshan is the proprietor of Afrochine Smelting, a company which has a huge presence in Zimbabwe’s chrome fields.

Last year, Afrochine said the steel plant would sit on 2 000 hectares.

This will comprise a 1,5 kilometre long and 600 metre wide processing plant and mines.

Altogether the operation will turn over at least US$1,5 billion per annum.

Afrochine, Zimbabwe’s largest chrome smelting operation is a subsidiary of Chinese conglomerate Tsingshan Holdings, which accounts for 25% of global steel production.

Afrochine last year said it was determined to roll out a ferrochrome facility three times bigger than the Midlands-based Zimasco, Zimbabwe’s current biggest chrome processor.

Mines and Mining Development minister Winston Chitando said the government had mobilised key state agencies to work around the clock and ensure a flawless decision-making process for the project to be delivered timeously.

“The first is the carbon steel plant, which is about one-and-half kilometres,” Chitando said.

“Next to it will be a ferrochrome plant, which will generate 500 000 tonnes of ferrochrome.

“Those who know Zimasco, Zimasco does around 150 000 tonnes.

“So this will be three times the size of Zimasco.

“Then there is an iron ore mine and iron ore plant.

“The total turnover of this whole project will be US$1,5 billion, bigger than Zimplats and any other project you can think of.

“That is really the grant plan.”

The Standard