Vice President of the Senate Mike Nyambuya has summoned Finance minister Mthuli Ncube to Parliament to present a ministerial statement explaining how gold coins will stop the country’s economic haemorrhage.
This is after the leader of government business in the Senate Monica Mutsvangwa failed to “satisfactorily” respond to questions on the purpose of the gold coins.
Authorities have said the gold coins will be introduced on July 25 to ostensibly save the local currency from collapse and also halt soaring inflation.
But there is pessimism from the generality of largely poor Zimbabweans who are failing to see how they will benefit from the coins.
“The fundamentals of the economy are in the right place, the issue of the gold coins is a clear plan to move the economy forward,” Mutsvangwa had said.
“The issue of the introduction of gold coins is meant to provide a store of value and strengthen our local currency and minimise the volatilities of the exchange rate. I think it will be better for the Minister of Finance to come with a paper in this august House to talk with detail to the last point.”
Nyambuya then ordered that Ncube has to come to the Senate to address questions on the coins.
“We need the Minister of Finance to come here and address the Senate. These issues have been outstanding for a long time. Make sure that in the next sitting he has to be here to answer the questions,” Nyambuya said.
According to the Reserve Bank of Zimbabwe (RBZ), the gold coins named after the mighty Victoria Falls will be called Mosi-oa-Tunya.
A number of interventions by the RBZ and government in the past few months have failed to stop runaway inflation and galloping prices of basic goods amid calls for total dollarisation.
The government of Zimbabwe has banned the export of unprocessed granite following a call by the President to ensure value addition and beneficiation of granite before export.
Rudairo Mapuranga
President Emmerson Mnangagwa ordered the government to come up with a Statutory Instrument that bans the export of raw granite because the country was losing over 300 per cent of revenue due to the export of unprocessed granite.
“When you sell that block it earns US$4.5 million, when you break it into stabs you earn US$12.9 million. What would want (if you are the owner of this block) to sell it at US$4.9 and not at US$12.9? No one. So, Minister of Industry, go and craft a Statutory Instrument to ban the exportation of raw blocks,” President Mnangagwa said.
The government is optimistic that the mining sector will fetch an annual revenue of US$12 billion by 2023, with value addition and beneficiation sighted as critical for the achievement of the mark.
Following the call by the President, Minister of Mines and Mining Development Hon Winston Chitando crafted the following Statutory Instrument (SI 127 of 2022) which was published yesterday.
Mines and Minerals (Prohibition Order of Exportations of Unprocessed Granite) Notice, 2022
IT is hereby notified that the Minister of Mines and Mining Development, in terms of section 3 of the Base Minerals Export Control Act [Chapter 21:01], hereby makes the following notice:
Title
1. This notice may be cited as the Mines and Minerals (Prohibition Order of Exportations of Unprocessed Granite) Notice, 2022.
Interpretation
2. In these regulations—
“Act” means the Base Minerals Export Control Act [Chapter 21:01];
“exportations” means sending unprocessed granite to another country for sale;
“unprocessed granite” means the unprocessed light-coloured igneous rock with grains large enough to be visible with the unaided eye.
Prohibition order
(1) The export of unprocessed granite is hereby banned with immediate effect, except with the authorisation of the Minister in writing.
(2) Notwithstanding subsection (1), preexisting valid contracts for the export of unprocessed granite will be allowed to continue until they expire.
Offence and penalty
Any person who contravenes or fails to comply with this notice shall be guilty of an offence and liable to—
(a) a fine not exceeding level 9 or twice the value of the base mineral in respect of which the offence is committed or whichever is greater; or
(b)imprisonment for a period not exceeding two years, or to both such fine and such imprisonment.
SG 90% AND ABOVE US$53.38/g
SG ABOVE 85% BUT BELOW 90% US$52.54/g
SG ABOVE 80% BUT BELOW 85% US$51.98/g
SG ABOVE 75% BUT BELOW 80% US$51.42/g
SAMPLE BELOW 10g BUT ABOVE 5g US$50.57/g
FIRE ASSAY CASH US$53.38/g
Exchange rate TBA
NB: Fire Assay cash price is for gold above 100gs and no sample is deducted.
For Fire Assay Transfer price, a sample of not more than 10g is deducted
2% royalty is charged on all deposits (Small-scale Miners)
5% royalty is charged on Primary Producers
Cash available. Fidelity Gold Refiners’ prices will be changing daily in relation to world market prices.
Amidst an increase in the number of students seeking industrial attachment in mining firms for work-related learning, the industry is failing to absorb a large number of students, a poll has shown.
Anerudo Mapuranga
With only 26 per cent of students according to a poll conducted by Mining Zimbabwe managing to get placement within the stipulated time, it has become critical for mining stakeholders and the government to come up with strategies to end the problem since the government is projecting the mining sector to contribute significantly towards economic revival.
According to the poll, 24% of Students got attachments within the stipulated time, 14% got attached after over a year and said 62% have given up looking for industrial attachments completely.
Mining Zimbabwe spoke to Minerals Economist Mr Lyman Mlambo who has suggested measures to deal with the problem. According to Mlambo, the following points are necessary to end mining students’ industrial attachment problems.
(1) Tax incentives
The government can give tax incentives to mines and mining consultancy companies that offer attachments to students (dependent on the number offered). With incentives, the companies will increase their thresholds because I think the scope to do so is already there in many mines.
(2) Formalise ASM
Increase the size of the formal mining industry by formalizing and supporting artisanal and small-scale miners into proper business entities. Obviously the larger the size of the industry the more opportunities for student attachment.
(3) Mines Ministry must employ students
The Ministry of Mines and Mining Development itself has many departments at Head Office and in the provinces throughout the country. If well-resourced through adequate budget allocations. The Ministry can use these students throughout the country to temporarily fill their staff gaps at a lower cost and get its field inspections (mining engineering, processing plant, etc) and other services such as mineral assays at Government Metallurgical Laboratory fully provided.
(4) Colleges implement Education 5.0 effectively
In the context of Education 5.0, Universities and Colleges teaching mining-related courses should move towards establishing (owning and operating) their own mines, processing plants and assay laboratories which operate on a commercial basis and could easily attach their students there. In many countries, business or commercial enterprise is part of the tertiary education system, especially where research, innovation and industrialization are serious yardsticks for measuring the performance of universities and colleges.
(5) Industrial liaison committee
There is a need for a national industrial liaison committee (organization of some sort) comprising members from the mining industry and mining training institutions which should be charged with planning and implementing the placement process. Such a committee should be charged with managing a database of attachment opportunities and the number of students to be attached from year to year.
Since the government announced the introduction of gold coins many in the mining sector and the country at large conjectured if the Reserve Bank of Zimbabwe (RBZ) was not violating the gold trade act Chapter 21:03 which criminalises possession and gold trade without a license.
We spoke to Law professionals and former University of Zimbabwe Institute of Mining Research Chairman Professor Lyman Mlambo who gave us their views.
Mlambo said, “The gold coins are of course clearly a different product from refined gold never mind the percentage of gold in them (whether 100% or less). They are different commodities because the coins are a fabricated product and have applications, as defined by RBZ, that does not at all fit gold that has not undergone such fabrication.
“In essence, RBZ has created one extra use of gold in Zimbabwe and has moved to a higher level of the value chain (the level of application of gold). One of the uses created here is a medium of transaction since the coin can be used for transactional purposes due to its ‘liquidity and tradability’.
“Gold has many other uses and these uses are not covered in the Gold Trade Act. The Act deals with gold that has not yet graduated to the next level of the value chain. It is like arresting people who have pure gold teeth, or pure gold rings. The Gold Trade Act does not go that far in its application. At the stage of a gold coin, gold has been applied to produce a distinct product with different uses and characteristics than the gold coming from a Refinery. There is even value-added through the manufacturing (minting) process. This product is so differentiated from raw gold that the coins even compete with export gold for the same supply source. The factors that determine the demand for the two are different,” said Mlambo
A leading lawyer who declined to be named said should Fidelity Gold Refiners (FGR) trade the coins it will be a different ball game altogether.
“I think given the circumstances in which they are issued out they are to be treated as you would a gold ring in that you don’t need a special permit or licence to own them. It would, however, likely be different from Fidelity trading them as it is clearly a ‘security’. Trading in securities requires licencing,” the lawyer said.
The term “security” refers to a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation via stock; a creditor relationship with a governmental body or a corporation represented by owning that entity’s bond; or rights to ownership as represented by an option.
Another Harare-based attorney who is well versed in Mining law and a former Mines and Mining Development employee, Thammary Brenda Vhiriri added her voice saying once there is a value addition to gold the context changes.
“People wear gold chains and rings but don’t get arrested. It means that once there’s value addition done to the gold the context changes. Unmanufactured gold means gold that’s not value-added, it’s RAW GOLD and anything that contains value-added gold but which is not made for commercial products (chains, rings etc) or artwork or archaeology. But once that value-added gold has been smelted or removed from other artefacts it is classified as gold,” Vhiriri said.
Conclusion
Whilst the government has not clarified the official position speculation is rife. The onus is on the RBZ to give the official position to put the matter to rest as the country awaits the debut of the Mosi-Oa-Tunya Gold coins.
The CNRG last week conducted the Kamandama commemoration in honour of the widows who lost their spouses during the disaster.
According to CNRG Executive Director Mr Farai Maguwu, the widows are living in misery therefore the Hwange Colliery Company should make sure that the living conditions of the women who lost their spouses through the disaster is looked into.
“The widows are living in misery. We call on Hwange Colliery Company to build decent houses for these widows. Their living conditions is an indictment of both Hwange Colliery Company Limited and the GoZ. How we treat widows and orphans speaks volumes about the state of our conscience,” Maguwu said.
During the commemorations, the widows who lost their husbands in the Kamandama disaster could not hide their emotions saying that the incident is always fresh to them.
In the history of mining in Zimbabwe, the Kamandama disaster remains the deadliest. On June 6, 1972, four hundred and twenty-seven mine workers perished at the then Wankie Colliery’s Number 2 shaft when a string of underground gas explosions ripped through the mine.
The accident was so bad that most miners’ bodies were not retrieved and the shaft sealed off.
Miners drawn from South Africa, Angola, Zambia, Malawi and Costa Rica, among other countries, also died in the disaster.
In an effort to promote safety and health in the artisanal and small-scale mining (ASM) sector, the Zimbabwe School of Mines in conjunction with the Zimbabwe Environmental Law Association (ZELA)yesterday trained 36 ASM technical response teams from Bubi, Gwanda Zvishavane and Shurugwi to promote the effective and safe use of first aid.
Rudairo Mapuranga
The School of Mines and ZELA also took the opportunity to expand training of the teams on miner rescue practices and technologies so as to reduce mine accidents in the ASM sector.
“ZELA, School of Mines and partners are encouraging Artisanal and Small-Scale Miners to adopt best practices in their operations.
“In our endeavour to promote the effective and safe use of first aid and miner rescue practices and technologies in the ASM in Zimbabwe we are training 36 ASM technical response teams from Bubi, Gwanda Zvishavane and Shurugwi,” ZELA said.
Earlier this year, the Minister of Mines and Mining Development Hon Winston Chitando warned small-scale and artisanal miners who are not working in compliance with the dictates of the laws of Zimbabwe that they risk losing mining certificates.
Minister Chitando said the government will not renew licences for non-compliant miners who are not adhering to sustainable mining practices, marketing laws, tax regimes and labour laws.
The Minister said that the government will deal with issues of environmental degradation happening in mining communities by making sure that before the commencement of any extraction of resources miners should have an Environmental Impact Assessment (EIA) certificate.
He said that the government was not going to renew any mining certificates for miners with no EIA certificates. He also ensured the ASM sector that a special EIA certificate specifically for them has been designed.
“I’m sure we are all aware that once you get your mining certificate or concession, it is not yet the approval to commence mining. One has to submit the sight of works plan to the Ministry, one has to get an EIA certificate and there is an abridged version of the EIA certificate specifically for the ASM sector. Every miner must comply with responsible mining laws. The level of environmental degradation taking place in some areas is simply unacceptable. We will as the government before the renewal of any mining concession ensure that environmental laws are adhered to,” Chitando said.
SG 90% AND ABOVE US$55.23/g
SG ABOVE 85% BUT BELOW 90% US$54.36/g
SG ABOVE 80% BUT BELOW 85% US$53.78/g
SG ABOVE 75% BUT BELOW 80% US$53.19/g
SAMPLE BELOW 10g BUT ABOVE 5g US$52.32/g
FIRE ASSAY CASH US$55.23/g
Exchange rate TBA
NB: Fire Assay cash price is for gold above 100gs and no sample is deducted.
For the Fire Assay Transfer price, a sample of not more than 10g is deducted
2% royalty is charged on all deposits (Small-scale Miners)
5% royalty is charged to Primary Producers
Cash available. Fidelity Gold Refiners’ prices will be changing daily in relation to world market prices.
On track to achieving its annual production gold-focused miner, Caledonia Mining Corporation (NYSE AMERICAN: CMCL; AIM: CMCL; VFEX: CMCL) is pleased to announce that the Board of Directors has declared a quarterly dividend of 14 United States cents (US$0.14) on each of the Company’s shares.
Rudairo Mapuranga
The company which is targeting annual production of 73,000 to 80,000 ounces of gold in 2022 at its Blanket Mine in Gwanda is strategizing on becoming a multi-asset gold producer. The company continues to evaluate investment opportunities in Zimbabwe and elsewhere.
“Gold production so far this year has been strong, and we are on track to hit the top end of our guidance range of 73,000 to 80,000 ounces.
“Although the dividend continues to be a central part of our strategy, I am very excited with the opportunity that we have to evolve our business in Zimbabwe and de-risk it from being a single asset producer.
“I look forward to updating the market of our progress in due course,” the company Chief Executive Officer Mr Mark Learmonth said.
On January 3, 2020, it was announced that Caledonia would be increasing the quarterly dividend by approximately 9% to 7.5 US cents per share, commencing with the dividend to be paid at the end of January 2020. On June 29, 2020, it was announced that Caledonia would be increasing the quarterly dividend by approximately 13% to 8.5 US cents per share, commencing with the dividend to be paid at the end of July 2020, and on October 1, 2020, a further increase was announced to 10 US cents per share (an 18% increase). In 2021 increased dividends were announced in every quarter: January, April, July and October. The October dividend was increased 8% to US$0.14 cents a share, a 104% increase from the dividend announced in October 2019.
In January 2022, the Company announced a further dividend of US$0.14 cents a share. With Central Shaft now complete, the Company strategy is predominately de-risking the business from being a single asset producer.
The Caledonia board will continue to review dividends which will depend on the performance of the company and its capital investment requirements.
The visit saw Mine Managers touring the underground mine sharing technical information and taking notes on how the recently awarded “most improved gold mine” conducted its business. After an underground tour, I had a sit down with the man running the show Engineer Elton Gwatidzo. It was easy to see why he was voted President of the AMMZ as the man knew his business. Here is how the interview went.
KS Tell us a bit about yourself.
EG Elton Gwatidzo is a Mining Engineer who studied at the UZ. He has worked for BIMCO at ZISCO, PanAff-Ayrshire Mine and is the current How Mine’s Mine Manager. He is married with 3 boys. He is a holder of various mining and management qualifications.
KS How old is Elton Gwatidzo?
EG Elton is 41 years old.
KS What made you choose Mining as a profession?
EG My father is Ex-Wenera so I had an interest in mining from a very young age.
KS What’s your typical working day like?
EG Early morning daily reports, meetings, news press catch-up and various KPIs tracking.
KS You are running one of the oldest mines in the country, tell us about the history of How Mine?
EG Pegged in 1941 by J. Howe (hence How Mine). The mine Started with open pits and stamp mills for processing. It changed various ownership hands including 1971 when Lohnro took over then Metallon took over in 2002 until today.
KS How many metres below ground level is your deepest shaft and how do you get air circulation down there?
EG The deepest shaft is currently at 33L, 1200m and still sinking further down. Ventilation is supplied through the North shaft and Main Shaft which are intake while exhausting using districts in the old workings. A negative pressure system is employed.
Elton Gwatidzo with AMMZ members underground at Bulawayo Mining Company’s How Mine.
KS We have seen the new (Level) you are currently working on (opening). Tell us about it.
EG The new mining level being opened is 32L. Shaft sinking is progressing to 36L so as to establish a loading level at 35L which will enable access to ore from 32L. Each mining back is 76m ie from 30L to 32L.
KS Seeing there is lots of Mining in Southern Africa are there any plans for the AMMZ to work with SADC Mine Managers for example and conduct technical visits for information sharing?
EG Post Covid-19, that should be the plan.
KS You have a strong Mining background and as a person who grew up in Mining, is there anything you are doing to help Artisanal and Small-scale Miners around you to conduct proper mining?
EG How Mine has trained Women-In-Mining to obtain Blasting Licenses and basic mining training
KS What policy improvements would you like to see?
EG The main issue is policy inconsistency
KS To ensure the sustainability of the mine, what exploration and capital development projects are you running?
EG The mine is undertaking an aggressive exploration plan for both surface and underground resources at a cost of $8.2m. The mine is also expanding operations at a cost of $3m and deepening the 16N7 shaft to extend life at a cost of $3.6m.
KS In the last five years to current, do you have any upgrades or increases in your mineral reserves?
EG Last five years of exploration have only been to maintain the known resources.
KS What is your production target this year and what measures are in place to achieve these targets?
EG The mine is planning to produce 30koz of gold and over $5.7m was spent in 2021 to ensure sustained production in terms of capital expenditure.
How Mineworkers housing
KS We have seen a mini-town suburb at How Mine, currently how many workers reside in the workers’ residential area?
EG Currently 1016 workers reside at the mine
KS Zimbabwe set a 12-billion-dollar mining economy by 2023! Is this achievable?
EG Very possible although the timing is taking a toll. Covid-19 and International instabilities are always affecting the plans.
KS Congratulations on winning the most improved gold producer of the year. What did you do right to achieve improved production?
EG Investing in the business. Investing in new and modern equipment, underground exploration, and underground development. The results were mostly a function of the shaft deepening project commissioned in 2020 at a cost of $5.3m.
KS What challenges would you say you are facing as Zimbabwean miners?
EG Access to capital, quality of supplies and fair value of revenue.
KS Any words to those who are interested in venturing into Mining in Zimbabwe?
EG Zimbabwe is still highly untapped. The vast mineral abundance is still being accessed in shallow operations. There is still huge potential We have witnessed new ventures in Coal, Lithium, Gold, Diamond, Iron Ore and Platinum. More are still opening.
KS Besides Mines and Mining, what’s Elton into?
EG Elton is into Golf, farming and some family ventures.
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