Mining ZimbabweLatest Mining News, Policy and Industry Updates

Arnandale farm, just like much of its surrounding areas in and around Shamva, a small town north east of Harare gives a sad sight of faltered maize fields succumbing to an el Niño induced drought that has hit hard on much of the country and the entire Sub-saharan region.

By Kudzanai Gerede

In recent history, food insecurity has never reached intricate levels as currently looming for local villagers; with generally fair to bumper harvests conventionally sustaining this remote community but currently, the status quo points to a long lean year.

For most people here, the apparent poor harvests have rendered economic prospects sour as under-development is stifling growth opportunities for locals.

Little Shamva center which thrives on agricultural prosperity of the surrounding farms by offering a market for fresh local produce has seen the prevailing conditions already punctuating low trade volumes; there is generally little hope.

However, a panoramic view adjacent to Arnandale farm juxtaposes ailing maize fields and huge barren hills of mining debris from the now defunct mining operations believed to have been carried out by a German corporate decades ago and general convictions of large gold remains in this entire region are rife.

For this culturally preservative society, men have found a new economic mainstay to subvert the impeding calamity by engaging in artisanal mining.

Artisanal mining has always been practiced in this community for a period of time, only by a few village outlaws as the vast population concentrated on land cultivation but this year has seen a growing number of new comers into this laborious occupation driven by poor crop performance.

Along the meandering Pote River dozens of work pits where alluvial mining takes places are harbored. Hundreds of people in small groups of threes and fours work on the river beds on high alert of the ever marauding authority operatives as villagers do not hold certification to carry out mining activities.

They use shovels, picks, wheel barrows, chisels and metal bars among other simple hand tools with substantial amount of gold yielded on a daily basis.

“I have mined here for over 5 years with very few of us operating from this farm but lately we have realized a growing numbers of people joining us as a result of crop failure in our fields,” notes Calistas Mbirimi of Anardale farm.

“Women have also joined us but most of them prefer digging river sand which they sell to construction companies for building purposes whilst men go deeper for gold along Pote River,” he adds.

Arnold Magasa also from the same farm says there is abundant gold in the Shamva area but due to limited resources, lack of expertise and constant raids by local authorities they cannot dig deeper to boost their production.

“As you can see here, we do not have any other forms of livelihood except for those who do crop cultivation and mining. If we can be allowed to mine in an orderly manner we are prepared to do so, and if they provide us with a piece of land which we won’t be harassed by council operatives,”

In this area each group produces over 2 grams of gold per day and it is sold for not less than $ 20 dollar per gram. There plenty of gold buyers who travel from Harare every day and sometimes offer them working tools such as wheelbarrows and shovels for free to boost production.

“We are able to eke a living through mining here. We are sending our children to school, clothing and buying enough groceries for the family and also earn extra for pastime activities like drinking beer,” adds Magasa.

Artisanal mining have become a major economic event for most villagers in the country’s mining locations. There is however information gap between artisanal miners and government departments following the decriminalization of artisanal mining only if miners form mining syndicates.

Under the Reserve Bank of Zimbabwe orchestrated program, artisanal and small scale miners are required to form syndicates of 6 members or more and register with the authorities which earns them a mining certificate as a way of formalizing their activities and delivering their produce through formal channels.

Zimbabwe Miners Federation Chief executive officer, Mr wellington Takavarasha emphasized the role of artisanal miners in propping gold output and how the sector was helping alleviating poverty as a revenue earner in most resource rich but marginalized communities.

“Zimbabwe now that have been declared drought hit, the only recourse in the collapsing economy is artisanal mining which is more of a livelihood activity so we are going to find a lot of people joining the activity,” he stressed

263chat

CHINESE diplomats and companies’ unrestrained outbursts this week signalled how Zimbabwe’s foreign policy places the country at the mercy of big powers.

Zimbabwe has placed so much faith on one world power for everything from foreign direct investment to handouts.

The Chinese know that they have been the force behind Zimbabwe’s survival from waves of economic meltdowns and global isolation.

With that kind of money, almost the size of Zimbabwe’s GDP, China has literally placed the country in its palm.

This probably explains the Chinese embassy’s condescending utterances to the effect that without Beijing, Zimbabwe would be candle-lit, without power and internet connectivity. Harare has indeed placed itself at the mercy of its “all weather friend” and is no longer able to say yes or no to anything.

The “Look East” policy adopted by the late former President Robert Mugabe about 17 years ago without effort to spread tentacles to the rest of the globe has returned to haunt this country.

The Chinese’s recent outbursts following embarrassing exposure of their nefarious activities by local civil society groups could just be the beginning of more bad news to come as the Asian tiger begins to show its true colours.

One only needs to listen to the Chinese’s tone to see the level of subservience our country has placed itself and how aggressive our so-called “all weather friend” has become.

The Chinese pointed a warning finger at NGOs that dared question their mirthless attitude towards vulnerable villagers whom they have displaced in a manner most inhumane. They arrogantly declared that they cannot be blamed for exploiting legal loopholes in Zimbabwe’s Mines and Minerals Act, which allowed them to take over farmlands, whole villages and destroy delicate wildlife conservancies.

Surely, this can’t be how an “all-weather friend” would behave. But again, this is not all about friendship but billions of dollars that we have allowed ourselves to be enslaved by.

The continuous public outcry over Chinese investors’ disregard of labour laws and traditional customs cannot all be dismissed as unjustified and false accusations. Human rights watchdogs must stand on both legs and refuse to be cowed by the hostile language by Chinese firms and diplomats who have so much to hide.

This is why they chose a belligerent stance when NGOs called them to order.

But this is not to say Chinese people have done nothing in Zimbabwe. True, there has been so much investment from China in the past two decades, including an overflow of Chinese loans, yet these must not come at the expense of our freedoms and liberties.

For Harare, the message is clear — government must not put all its eggs in one basket. Zimbabwe must expand the scope of its FDI sources and spread diplomatic ties.

As the old adage goes, there are no permanent friends but interests.

NewsDay

LAW firms from around the world are advising as Chinese company Zhejiang Huayou Cobalt acquires Arcadia Lithium Mine in Zimbabwe, majority-owned by Australian-based Prospect Resources, in a deal worth $422 million.

Prospect says the transaction highlights the benefits flowing from the Special Economic Zone status of Arcadia Lithium Mine, with its potential to “put Zimbabwe firmly in the electric vehicle supply chain”.

Huayou has turned to Australian firm Minter Ellison, Jingtian & Gongcheng in China, Scanlen & Holderness in Zimbabwe, and Morgan Lewis Stamford in Singapore, according to a statement on the deal.

King & Wood Mallesons in Australia, Manokore Attorneys, and DLA Piper Africa in Zimbabwe are Prospect’s two legal advisers.

Scanlen & Holderness’ senior partner Sternford Moyo told Law.com International that lithium is a highly sought-after commodity.

“It is used in producing batteries, energy storage, electric vehicles, portable devices, and solar panels, and Zimbabwe has one of the world’s largest reserves of Lithium.”,

Moyo is leading the Scanlan & Holderness team advising Huayou on the Zimbabwe law aspects of the matter, assisted by partner Memory Mafo, and associate Tapiwa Chivanga.

The Morgan Lewis Stamford team advising Huayou is led by director Bernard Lui, supported by associate director Gina Ng, and associate Aden Tan.

Zimbabwe firm Manokore’s team advising Prospect was led by partner Jabulani Nhongo, supported by senior associate Farai Nyabereka, associate Tatenda Tendayi, and consultant Rainor Robinson.

The transaction is expected to be completed by the second quarter of 2022, subject to Prospect shareholder approval, Chinese regulatory approvals, and all other conditions being satisfied or waived.

CHINESE company, Freestone Mines, is facing litigation for embarking on quarry mining activities in the Dangamvura Mountain before obtaining the Environmental Impact Assessment (EIA).

According to section 97 of the Environmental Management Act, mining companies are obligated to undertake an EIA procedure and apply for an EIA certificate to the Environmental Management Agency (EMA).

Under the confines of EMA Act (Chapter 20:27) as read with Statutory Instrument 7 of 2007 an EIA is a legal requirement.

Last year in November Mutare City Council leased its 6,5-hectare stand situated surrounding Dangamvura Mountain to Freestone Mines and war erupted over failure to consult residents.

Residents demanded council to relocate the Chinese miner to a new site far away from residential areas and water distribution pipes.

Amid the war, both the local authority and Freestone Mines issued statements which confirmed the EIA process had not been undertaken.

Speaking Friday during a community dialogue meeting on Dangamvura Mountain, Centre for Natural Resources Governance (CNRG) director, Farai Maguwu revealed that plans are afoot to take Freestones Mines to court after it ignored the EIA process.

“The Chinese miner started preparatory works for a quarry on Dangamvura Mountain without an EIA. It means they broke the law already and a crime was committed. Section 97 stipulates that anyone who commence a project without EIA is liable to a fine or a jail sentence,” Maguwu said.

“As an organisation working with other organizations here like Manica Youth Assembly (MAYA), Mutare Informal Traders Association (MITA), United Mutare Residents and Ratepayers Trust (UMRRT) among others, we are going to  approach the courts over the quarry. As citizens from Mutare we are not happy with the issue happening at Dangamvura Mountain,” he said.

“Despite that an EIA certificate is there, if they start to mine on the mountain, we will approach the courts and file an urgent chamber application. This application will not allow the miner to operate since the matter will be pending at the courts of law,” he said.

“When CSOs registered their displeasure over the Chinese quarry, Mutare City issued a statement noting it had come to their attention that Freestones Mines had started preparatory works without EIA. We were surprised days later to see an EIA certificate dated 27 September 2021, noting that EIA process was conducted, and a certificate had been issued. However, on 18 November Freestones Mines had issued a statement saying they had not stated operations but were simply doing preparatory works as they wait for the EIA certificate,” Maguwu fumed.

NewZimbabwe

A local investment firm that signed a deal to revive Metallon’s Redwing Mine in eastern Zimbabwe, has taken the corporate rescue practitioner (CRP) of one of the country’s largest gold mining asset to court for terminating the transaction.

Duatlet, comprised of Probadek Investments, Betterbrands Mining — a vehicle owned by prominent gold dealer, Mr Scott Sakupwanya, and Prime Royal Africa on November 17, 2021 signed a four-year agreement with Redwing to revive the mine.

Redwing is under a corporate rescuer, Mr Knowledge Hofisi, of Aurifin Capital.

In the urgent application, in which Duatlet and Propadek are the applicants while Mr Hofisi, Redwing, Betterbrands and Master of the High Court are respondents, the CRP cancelled the deal although he had been furnished with proof of funding.

Duatlet is seeking a court order declaring the agreement valid and be implemented.

In his notice of opposition, Mr Hofisi disagree, arguing that the Duatlet failed to provide proof of funding, a substantive condition needed to operationalise the agreement.

According to Mr Hofisi, Duatlet tried to borrow money, pointing to lack of capacity to mobilise sustainable funding structures. He also argues that the matter should not be dealt with as urgent as it was filed 13 days after termination of the deal.

In terms of the agreement, the consortium was to provide initial working capital to the tune of at least US$3 million for procurement of critical spares, payment of corporate rescue costs, settlement of proven claims by creditors and payment of wages.

Redwing was to get 28 percent of net earnings while Duatlet would get the remainder at intervals directed by a steering committee using transactional platforms approved by the

Fidelity Printers and Refiners. Prior to the signing of the agreement, Betterbrands, which was co-opted into Duatlet was running the mine.

After signing the deal, Betterbrands was ordered to suspend all mining activities, with immediate effect, to pave way for the operationalisation of the joint venture agreement.

“First respondent (Hofisi) purported to cancel the joint venture mining agreement by letter dated 17th December citing that first applicant (Duatlet) had failed to furnish him with proof of funding of the project,” the court papers read.”

“This is notwithstanding that first respondent provided proof of funds through a later dated 29th November, 2021 and a bank guarantee on 15th December 2021.”

After cancelling the deal, Mr Hofisi is alleged to have directed — without approvals from Redwing creditors — Betterbrands to resume operations on December 20, 2021.

“Application is, therefore, seeking the leave of the court institute proceeding against the second respondent (Redwing) for an order declaring the joint venture mining agreement entered into between applicants and the second respondent (Hofisi) valid, and resultantly an order nullifying the authorisation of third mining respondent’s mining activities and the mining location and any subsequent agreements between second and third respondent,” the applicants argue.

Mr Hofisi maintains the fact that Duatlet failed to provide funding 14 days after signing of the joint venture agreement, cancellation of the transactions became inevitable.

“The operationalisation of the joint venture was subject to the first applicant satisfying the condition precedent and for all intends and purposes, only proof of funding was a substantive condition,” says Mr Hofisi.

In his rescue plan, Mr Hofisi said Redwing will need as much as US$6 million to restart production by bringing in new investors into the business valued at about US$30 million.

Underground gold production would resume from level one using conventional hand-held mining techniques before moving to level three to benefit economies of scale.

The Sunday Mail

INVICTUS Energy, the Australian firm searching for oil and gas in Muzarabani, says it has started several initiatives that are already positively impacting the local communities and may transform the area entirely in the future in into a modern settlement.

Managing director, Scott McMillan, said in an interview the initiatives had created direct employment for the locals and indirect economic activity for local businesses, especially during the firm’s seismic campaign.

The Australia Stock Exchange listed company recruited more than 100 locals for its seismic campaign (gathering sub-surface vibrations), while more jobs are expected to be created during exploration well sinking.

The subsurface vibrations from the seismic study are used in the oil and gas exploration to pinpoint locations that have the highest potential to host hydro-carbons, hence increasing the chance of successful discovery.

Invictus lauded the support it has received from the Government, which declared Zimbabwe “Open for Business”, saying this has spurred progress towards a major exploration exercise in Zimbabwe in more than three decades.

“We have also been implementing our corporate social responsibility programme as well and that will continue and also be expanded this year,” MacMillan said.

However, he said the project was still in the exploration phase and future socio-economic activities in the area depended on drilling results and whether commercial discovery was made.

The Muzarabani prospect is considered to be the largest undrilled conventional oil and gas prospect onshore Africa and could host prospective resources of about 9,25 trillion cubic feet and 294 million barrels of gas condensate.

“If we do make a commercial discovery then it will definitely have a huge positive impact in the community with the development of the project,” he said, adding opportunities would entail construction jobs for the facility and pipeline as well production roles.

The company is also focused on providing water, education and health initiatives, which have been guided by the local community input gathered when it undertook its environmental impact assessment study.

The local leadership told this publication during a recent visit to the area that they expected Invictus to prioritise locals in recruitment for jobs, especially those that do not demand skilled expertise, and for the company to invest in key infrastructure like dams, roads and bridges, education and health facilities.

“We did not like to be like an NGO (non-governmental organisation) that goes in with prescriptive programmes, but actually (wanted to) understand what the community really needs,” MacMillan said in an interview.

Additionally, MacMillan said commercial discovery of oil/gas in Muzarabani would bring about significant downstream benefits through indirect downstream industries and new jobs.

At national scale, success in the exploration programme would result in significant royalties, taxes and production or profit share for the Government, which would spur development in the country.

Invictus Energy has already recorded significant milestones and encouraging study findings since acquiring and further processing a US$30 million data set from French petroleum giant Mobil, which was gathered back in the mid 1990s.

The study by Invictus is only the second in more than 30 years since the one by Mobil, which was at a reconnaissance scale in terms of line spacing (15-20 kilometres) apart from looking at the basin configuration.

“Our spacing is 1,5 km apart and designed to identify specific drilling targets. Our survey was done with vibroseis units as the source whereas Mobil used dynamite, (this is) first survey since 1990 and technology has moved considerably since then,” MacMillan said.

Key milestones the company has recorded thus far include a petroleum exploration development and production agreement (PEDPA) signed with the Government.

President Mnangagwa said at the signing ceremony that the PEDPA represented major strides in Zimbabwe’s efforts to tap into its oil and gas deposits, which is a new territory in the country’s mining sector.’

Invictus also managed to renew its Muzarabani special grant licence by a further 3 years and has completed an environmental impact study.

Further, Invictus has also signed a drilling contract with British firm Cluff Energy and inked drilling rig agreement with Exalo, agreements which have seen it remain on course to meet its target of commencing drilling in the first half this year.

“We are gearing up for the drilling programme now and the long leads (wellheads and casing) have been manufactured and getting ready to be shipped to our warehouse outside Harare over the next few months and then to the field once everything is ready and the rig is on its way,” he said.

MacMillan said the company would possibly start receiving the key equipment for the exploration drilling programme at the end of next month, with the test well sinking planned before the end of the first half of this year.

The local leadership told this publication during a visit to the area that they expected the project to prioritise residents on non-skilled jobs and to help develop key infrastructure.

“Jobs should be made available first to locals while other development projects should come through as a result of this initiative. We welcome this project, but we also have a lot of aspirations.

“We must not repeat what happened in Chiadzwa where people from other places were first to benefit (diamond rush), and go away to develop and build nice houses in plush suburbs like Borrowdale in Harare,” said Chief Muzarabani.

According to Chief Hwata, whose chiefdom also borders the project area “The project should develop the area, we expect to get better residential houses, roads and bridges among other things. This project must succeed and we can see it is making good progress,” he said.

Business Weekly

Persistent heavy downpours in and around Hwange have disrupted coal mining in the area, resulting in failure by local mines to meet Hwange Power Station’s monthly demand of 90 000 tonnes required for power generation, an official said on Friday.

Most of the country’s coal supplies comes from Hwange, and several companies are involved in the commodity’s extraction.

The bulk of the output is used in thermal power generation at Hwange Power Station, and only a limited amount is exported.

In an interview, Zambezi Gas and Coal operations manager, Menard Makota said heavy rains pouring persistently in the region had affected mining operations, resulting in cut backs in production.

Some of the mines flooded, forcing the companies to invest in water pumps to be able to pump out the water from underground.

As a result, Makota said mining companies were not able to meet Hwange Power Station’s coal demand of 9 000 tonnes per month.

“This year we received more than normal rainfall. We once recorded 90 millimeters of rain in three hrs, meaning the rain was very heavy,” he said.

“In the past four months, we have purchased water pumps for about US$300 000 which will be used to pump out the water. Our men in the pits are working tirelessly so that we do not have any problems emanating from the rain,” he said.

New Ziana