Mining ZimbabweLatest Mining News, Policy and Industry Updates

Australian Stock Exchange- listed Prospect Resources that recently executed a binding Share Sale Agreement (SSA) with Huayou International Mining for the sale of its 87 percent shareholding in Prospect Lithium Zimbabwe, said they are ready to invest the proceeds in other similar investments.

The deal is valued at US$377.8 million in upfront cash consideration, equating to approximately A$1.23 per Prospect ordinary share. The transaction represents the culmination of the strategic partnership process undertaken by Prospect since August 2021.

However, with seven non-binding offers being made for the licence in November 2021, Prospect’s 87 percent stake in the asset was sold to Huayou Cobalt, the remaining 13 percent stake is held by a Prospect geologist (7 percent) and the land user upon which Arcadia is situated (6 percent).

According to Prospect’s managing director, Sam Hosack, the company also plans to distribute 95 percent of the sale proceeds to shareholders in the form of a capital return. Going forward, Prospect intends to use the proceeds of the Arcadia sale to pursue similar projects.

“We are proposing to retain about A$30-million to A$60-million to take the existing team and look at some of the other assets we have been working through to do a similar exercise to Arcadia again,” he says.

Being a lithium-focused business, Prospect entered Zimbabwe in early 2012 looking for gold and other opportunities.
“We are very much an exploration-focused business. With lithium becoming a very critical mineral, we went in earnest looking for lithium and discovered, and then drilled out Arcadia, which at that time was the fifth- or sixth-largest hard-rock lithium resource globally. It put Prospect on the map,” says Hosack.

“We know Zimbabwe and it is very prospective. Our team is mostly made up of Zimbabweans and we have a world-class team of Zimbabweans that live in Australia and have a really strong network and technical and geotechnical understanding of Zimbabwe in terms of the country’s geology and operations,” says Hosack.

Zimbabwe is also set to benefit from the sale, through the payment of capital gains tax on selling of the asset held.
From the gross sales of A$528m, we estimate the company will need to pay Zimbabwe capital gains tax of approximately US$30m, plus US$15m across transaction costs including legal and adviser fees and a damages fee on breaking its existing offtake.

“The transaction is also expected to complete in late first quarter or early second quarter of 2022, the company still expending on corporate expenses, likely exploration, and new projects development up until then.”

“In summary, we estimate Prospect will have approximately A$500m after deducting expenses and tax, and including cash prior to transaction announcement (ca A$23m) and from in-the-money options we expect to be mostly exercised (A$11m).”

Business Weekly

The rains may have halted progress on the ongoing gas and oil exploration project in Muzarabani, Mashonaland Central, but it has not dampened the mood and expectations of villagers in the district.

Never has a project impacted the imagination of villagers the way the Invictus oil and gas exploration project in the Zambezi Valley has.

Invictus, the Australian firm, has been conducting preliminary tests in Muzarabani District of Mashonaland Central in preparation for drilling the first exploration well before June 2022.

In the early 1990s, Mobil undertook the first oil explorations in the Zambezi Valley — of which Muzarabani is part — and reportedly found gas, but the gas remained unexploited.

Subsequent reprocessing of the Mobil data and enlisting of the latest technology point to Muzarabani hosting significant deposits of petroleum oil and gas.

Ongoing work will, in the next few months, be expected to add clarity to the data, the upcoming drilling programme and the way forward.

Invictus, the company undertaking the exploration work, says in the meantime, it is focusing on delivering growth and fostering relationships with stakeholders and host communities.

Villagers note that Mobil’s gas and oil exploration stretching from Hurungwe and Chirundu lasted three years in the early 1990s before throwing in the towel, although concluding that there was “nearly “100 percent potential of gas and a high possibility of oil occurrence in the  Zambezi Valley.

The Chairman of the Muzarabani Rural District Council (MRDC), Alderman Ashton Chiweshe, confirms that the expectations are high, adding: “We expect a drastic improvement in the fortunes and lifestyles of the people in Muzarabani first, and secondly in the whole of Mashonaland Central, as the host province of the project.

“We expect development. As we speak, right now there is engagement of locals in such things as bush clearance and security to safeguard the exploration equipment. The people involved in these processes are locals,” he explains.

In the long run, he says, the expectation is that this is going to be a “megaproject”.

From the perspective of villagers in the district, the expectation is that once it takes off, there is going to be “total transformation” of the district and the project will recruit more locals required for various stages of the Invictus project.

As the project progresses and more people are recruited, accommodation will be required, he explains, and this will likely result in the growth and expansion of both Centenary and Muzarabani. For example, he points out, there could be more banking services, and certainly more shops going up, translating into improvement and development of the district, the two centres and the whole Mashonaland Central province.

He says: “I think there will be a lot that will happen.”

Generally, there is appreciation of the way that Invictus has gone about in undertaking its work in Muzarabani because there are constant consultations and engagements with the locals, he observes, explaining that he has attended some of the Invictus activities.

A case in point is that while Muzarabani has 29 wards, Invictus is active in 11 of these, where they expect to drill boreholes, once the rainy season is over.

The attendant improvement of the road infrastructure is part of the Government’s contribution under the Emergency Road Rehabilitation Project (ERRP).

Part of what informs the heightened expectations of the villagers in Muzarabani is their observation of how local businesses have responded to the ongoing exploration work. There is growing interest and enquiries for new businesses opportunities in the district and, villagers conclude the enquiries pointing to a possible boom of the district and province.

Pointing out the improved main road, villagers say this act will open up more areas and, in the process stimulate economic and social activities and development.

ErizaMariba, says a good road network, opens up access to markets for agricultural producers to move their crops, while also allowing them to purchase inputs. A good road network makes travel and movement of goods much easier.

Councillor Raphael Maruziva, who is in charge of the Social Services Committee of the Muzarabani Rural District Council, was part of the Mobil exploration workforce in the 1990s.

He believes the benefits of the Invictus project are that it will generate sizable revenue, create jobs and business opportunities, as well as bring new roads and access to water and power to rural areas.

Projects such as the one being spearheaded by Invictus have the potential to stimulate economic growth, reduce poverty, and raise living standards.

“We anticipate improvements in how the people here live. For example, during the first phase of the current exploration, people ended up getting employment.

“Some of the locals employed on the project ended up buying properties at Muzarabani Business Centre.”

He points out that among the immediate benefits of the exploration project are that boreholes will be drilled for the benefit of the villagers in both Mbire District and Muzarabani, while jobs have been created.

For village health worker, Kumbirai Ndhlovu, you would think Invictus has already confirmed as positive, the findings of the exploration. She is excitement personified, when it comes to what the project will mean for Muzarabani.

In other countries where gas and oil have been discovered these have generated employment, given a boost to local businesses, installed and maintained new infrastructure, while offering training and skills transfer to locals. 

New Zian

A 22-YEAR-OLD Domboshava man was hospitalised after he suffocated trying to rescue a colleague trapped in a gold mine shaft.

Ngoni Sika (53) died in the mineshaft while Peter Mudyiwa (22), who tried to rescue him, had to be retrieved by his colleagues while unconscious.

Mashonaland East provincial police spokesperson Inspector Simon Chazovachii confirmed the incident.

According to police, on February 26, at around 11am, Sika was working in a shaft at Nhokwara Magigi Mine in Domboshava with colleagues Peter Chingomo (41), Mudyiwa (22) and Tinei Tom (37).

Sika reportedly descended to the 30m shaft using a rope tied around his waist.

The deceased reportedly shouted for help, telling his colleagues that there was a gas leak in the shaft and he was having difficulty breathing.

Mudyiwa reportedly went down the shaft using the same rope, but was also affected by the gas and fell unconscious.

The other workers managed to retrieve the pair, but Sika was already dead.

A report was made to the police in Chinamora who attended the scene before ferrying the deceased’s body to Makumbe Hospital mortuary for post-mortem.

Mudyiwa is admitted to the same institution.

NewsDay

A TOTAL of 52 families in Lubimbi, Binga, Matabeleland North are facing eviction after Hwange Colliery Company got a grant to extract coal from the area.

The community was already facing eviction to pave way for the construction of the Gwayi-Shangani Dam.

Lubimbi ward councillor, Chrispen Munkuli confirmed the developments.

“As a community, we have discussed the issue and agreed that we will not agree to the evacuation.  However, we are advised that he mining company is now ready to mine.”

Munkuli said they were waiting for the district development co-ordinator (DDC) to address the villagers on the issue.

DDC Land Kabome said he was aware of the issue.

In 1945 the Lubimbi community was moved from the Madilo area between Shangani and Kana rivers to pave way for a Cold Storage Commission project.

Some were moved to the area during the construction of the Kariba Dam around 1956, and the others came from Sinamatela area around 1950 and were moved to pave way for the establishment of the Hwange National Park.

“It has not yet reached that level of evacuation but l am aware that HCC was given a mining claim long back. The colliery is supposed to go to the community and advise the villagers,” Kabome said.

“We have not yet engaged the community. We will update you, because there will be certain things we expect the HCC to do for the community.”

HCC public relations manager Beauty Mutombe said they were engaging the community.

“There are no evacuations at this stage, we are engaging the community through the office of the DDC but so far we have not yet done anything on site,” she said.

Newsday

ZESA Holdings says the power utility will focus mainly on providing solutions amid a spike in theft and vandalism on its property.

ZESA executive chairman Sydney Gata said the power utility was going to use technology in the fight against theft as the number of incidents has been on the rise, delaying development of key infrastructure as the utility had to channel the money towards replacing the stolen key equipment.

“Solutions to theft and vandalism should be prioritised. In order to mitigate the risk of theft and vandalism, Loss Control is working with other stakeholders and law enforcement agents. Even though this is the case, there is a need to explore technology and ride on such technological interventions to curb with speed the  problem of theft and vandalism,” Gata said at the ZESA Risk Management Awards ceremony held this month.

Equipment theft and vandalism has been identified as one biggest risk prejudicing the power utility of more than US$2m annually.

So widespread is the theft and vandalism that in 2019 the power utility acquired industrial-grade enterprise drones to curb the vice, which has been likened to economic sabotage.

Zesa has also been lobbying for a stiffer, longer sentence for those convicted of infrastructure theft.

There have also been claims that ZESA employees were behind most of the theft cases as economic conditions in the country have worsened rendering salaries useless forcing them into crime.

The Zesa Risk Management awards were held to honour stations with outstanding performance within the ZESA group that excelled in good risk management practices during the year 2021.

ZPC Kariba Power Station and ZENT Projects division were awarded for being the overall best in risk management and loss prevention.

In order to mitigate the risk of fires and explosions, which has also caused severe losses other than theft and vandalism, Zesa reported that it acquired and commissioned Arc Flash personal protective equipment valued at US$350,000.

Business Times

Workers in the mining sector have been awarded between 46% and 50%  wage increase which will see the lowest employee earning ZWL$45 000 from ZWL$30 000 a month following a recent agreement between the Associated Miners Workers Union of Zimbabwe and the Chamber of Mines of Zimbabwe.

The highest paid will now earn about ZWL$104 000 from ZWL$71 000.

According to the National Employment Council (NEC) of Zimbabwe for the mining industry, the workers will  also get a minimum portion of US$198 and US$460 respectively.

“This notice serves to bring to your attention that the following new minimum rates or pay grades 1-13 have been agreed upon in dual currency. This agreement carries an exemption Clause as stipulated in the Principal Agreement Statutory Instrument 152 of 1990 Clause. Non  foreign currency generating companies upon being granted an exemption may be allowed to pay the United States dollar amount in Zimbabwe dollars  equivalent using the official bank rate. Employers who are able to pay more than the NEC minimum are encouraged to do so,” NEC said.

The salary increment comes after the cost of living for a family of six increased  by 25% to $72 967 to meet their basic needs according to the Consumer Council of Zimbabwe (CCZ).

The current cost of living implies that a family of six now requires US$300 using the current parallel market exchange rates per month to meet their monthly requirements or US$700 based on the official rate.

Revenue and together with agriculture the sector is expected to anchor economic growth this year.

Business  Times