Mining ZimbabweLatest Mining News, Policy and Industry Updates

Diversified resources group, RioZim Limited, says gold production is forecast to improve as Cam and Motor, the group’s high grade ore flagship gold mine is set to resume production.

For the past two years, there was no production at Cam and Motor to facilitate construction of its US$17 million BIOX Plant, whose commissioning completed on April 14, 2022.

The closure of the mine saw the group’s gold production for 2021 declining by seven percent to 1 122 kg from 1 205 kg in the prior year.

“Production is forecast to improve as Cam and Motor returns to producing from its high grade pits,” Saleem Rashid Beebeejaun, the group’s chairman, said in a statement of 2021 financials.

He said during the year, the lifespan of the stopgap One-Step mining operation was extended and continued to supply ore to the Cam and Motor plant, however, the grades were low which resulted in low production.

The group’s other operations, Dalny and Renco, recorded almost consistent production from the prior year.

According to Beebeejaun, the completion of the BIOX Plant, which was scheduled for the second half of 2021, was delayed due to inadequate foreign currency and Covid -19 pandemic induced challenges.

Therefore, earlier commissioning of the BIOX Plant Project, would have enabled resumption of mining operations at the Cam and Motor high grade ore pits.

“The BIOX Plant commissioning remained a priority for the Group. Subsequent to year end, testing of the plant components commenced in earnest with no major challenges being encountered. The commissioning of the BIOX Plant was completed on April 14, 2022,” he said.

The Biox plant has the capacity of improving the processing of pure oxide ores to make good grades and high recoveries.

Cam and Motor resumed operations in 2014 following the group’s successful US$10 million capital call and had a projected production of 4 000 ounces per month.

The mine had been closed in 1968, with the gold price at US$35 per ounce and the mine operating at depths of 1,800 metres when operations were no longer viable.

At that stage, the mine cut- off grade was 8 grams/tonne and so it was considered likely that there could be significant resources adjacent to the old workings that would now be economic to mine.

According to Beebeejaun, despite a seven percent decline in gold production, the Group’s revenue for 2021 increased by 84 percent to $5,8 billion compared to the prior period’s $3,1 billion primarily due to the depreciation of the local currency against the United States dollar.

In terms of individual gold business performance, Renco Mine operated at almost the same level of production as the prior year, achieving 561kg of gold, three percent lower than 580kg produced in the prior year.

The chairman said the slight shortfall in gold output from the prior year was attributed to reduced plant throughput as a result of increased power cuts during the year.

At Dalny Mine, there was a six percent growth in gold production achieving 209kg of gold from 198kg produced in the prior year.

Beebeejaun said the growth in gold production was due to increased plant throughput as plant improvements carried out during the year successfully stabilised the plant.

Gold production at One-Step mine fell by 18 percent from the prior year’s production of 427kg to 351kg.

“The low gold output was attributable to lower grades which dropped from the prior year.

“The life of mine was extended during the year despite the grades deteriorating and mining operations continued for the full year,” said Beebeejaun.

He added that the One-Step ore was processed at the plant in Cam and Motor as had been happening in the previous year.

Business Weekly

GROSS revenues at the Victoria Falls Stock Exchange (VFEX)-listed Caledonia Mining Corporation increased by 37% to US$35,1 million in the first quarter of this year, reflecting a major increase in gold production and prices, the firm said yesterday.

In the same period last year, gross revenue stood at US$25,7 million.

In its results for the quarter ended  March 31, 2022, Caledonia, which is also listed on the New York Stock Exchange and London Stock Exchange, said the high revenue reflected a 40% increase in production and a 6% increase in the realised gold price.

The 40% increase in production was due to higher tonnage milled, improved grade and better metallurgical recoveries.

Earnings before interest, taxes, depreciation and amortisation stood at US$14,6 million in the review quarter from US$9,7 million achieved last year.

Commenting on the results, Caledonia chief executive officer Steve Curtis said the first quarter of 2022 was an “excellent start”.

“Gold production in the quarter represents a new production record for any first quarter. Production in April showed a further improvement; production of almost 6 800 ounces in the month reflects an annualised production rate that is marginally above the top end of our guidance range for 2022 of 73 000 to 80 000 ounces of gold,” he said.

He said production in the quarter excluded approximately 1 500 ounces of recoverable gold contained in an ore stockpile which accumulated during the quarter as “we await the commissioning of an additional mill later in the year”.

“Operating costs were well controlled. The on-mine cost per ounce fell by 16% compared to the first quarter of 2021. The reduction was because of higher production, which means that fixed costs are spread over more production ounces; costs were also helped by reduced diesel consumption following the installation of equipment in late 2021 which allows us to manage the poor-quality grid power,” he said.

Following Caledonia’s successful secondary listing on the VFEX in late 2021, Curtis said the firm had increased the proportion of revenues received in United States dollars.

“This, in conjunction with other arrangements, means that we are not accumulating excessive local currency balances. We have a strong, long-term working relationship with the Reserve Bank of Zimbabwe and Fidelity Printers and Refiners and we are delighted that the payment process for gold deliveries and the regulations that manage the flow of funds from Zimbabwe continue to operate smoothly,” he said.

Curtis said Caledonia remained confident in achieving production guidance for 2022 of 73 000 to 80 000 ounces.

“Caledonia’s immediate strategic focus is to convert the commissioning of the Central Shaft project into higher production, lower costs and increased cash generation. We have made an excellent start in each of these objectives,” he said, referring to the new shaft, which was commissioned last year.

He said the firm would continue to evaluate further investment opportunities in the gold sector in the country, with the long-term vision of becoming a mid-tier, multi-asset gold producer.

The Caledonia chief said its 12 megawatt solar project was now in the final phase of construction and would be operational within the next few months.

Newsday

A CONTROVERSIAL firm that produces bling products for domestic and international markets has shaken Zimbabwe’s export market, outsmarting big brands in the past four years, central bank data showed yesterday.

Suzan General Trading, which exports jewellery products and beneficiates diamonds and gold, is generally out of the spotlight.

But away from public limelight, the firm has developed a network that has given it financial clout, generating more United States dollars for the country than most big brand manufacturers, the Reserve Bank of Zimbabwe (RBZ) said.

The firm courted controversy in 2018 when an RBZ boss was dragged to court for criminal abuse of office.

It was alleged at the time that on October 13, 2017, Suzan opened a bank account to facilitate payments from Fidelity Printers and Refiners, the firm that buys all of Zimbabwe’s gold.

In the aftermath, an RBZ director appeared in court, accused of authorising the withdrawal by Suzan of amounts beyond the authorised limits.

The firm has been named in other cases involving gold, but none of its executives have ever been found guilty in Zimbabwe.

Exports out of its international sales reached US$40,9 million in 2018, before rising to US$113,2 million in 2019.

The value surged to US$168 million in 2020, even as the COVID-19 pandemic-induced lockdowns grounded economies, before slowing down to US$6,6 million last year, but still far ahead of the rest of the country’s exporters.

By April 26 this year, Suzan had exported products worth US$1 million.

The US$330 million exports revenue was far ahead of second-placed Tregers, which exported goods worth US$55,2 million during the four-year period, according to the exchange control table listing the top 20 best exporters from the manufacturing sector.

Paramount Exports was the third after shipping out products worth US$49,6 million during the period.

Other big exporters included Sunny Yi Feng Tiles Zimbabwe, a Chinese firm that has been manufacturing tiles in Norton in the past three years.

Hunyani Group, Schweppes Zimbabwe, Lobels Biscuits, Megapak Zimbabwe, Varun Beverages, Nestle Zimbabwe and Steelmakers Zimbabwe are some of the firms that made it to the top 20, according to central bank data.

Zimbabwe has struggled to generate enough exports to power its faltering economy, but the Confederation of Zimbabwe Industries (CZI) said on Wednesday exports from
the manufacturing sector were firming.

It said exports grew by 5,5% to US$404 million in 2021, powered by improved access to cheaper foreign currency from the foreign currency auction system.

Industry and Commerce minister Sekai Nzenza said the manufacturing industry was poised for growth.

“Testimony to this, the manufacturing sector has realised a 5,5% increase in exports from US$383 million in 2020 to US$404 million in 2021,” said Nzenza, speaking at the launch of the CZI’s 2021 Manufacturing Sector Survey report launch in Harare.

Newsday

INVICTUS Energy has started constructing the site for its first exploratory well in Muzarabani where it is prospecting for oil and gas.

This is being done in preparation for drilling, which is expected to start in July this year, as the company enters a crucial phase in the development of the prospect.

The exploratory wells will give a better idea of the full extent of the oil and gas reserves in the Muzarabani prospect following the collection of more than 800 km of 2D seismic data in 2021.

The initial exploration work by Invictus has suggested the existence of a substantial amount of oil and gas reserves.

In an update, the company said: “Invictus Energy has commenced construction at the Mukuyu well site in Zimbabwe. The Mukuyu structure is independently estimated to contain 8.2 trillion cubic feet+ 247 million barrels of conventional gas-condensate.”

Invictus has contracted Exallo Drilling to provide drilling services while American company Baker Hughes was tied up for well services, which include cementing, drilling fluids, tubular running, installation of wellhead equipment and project management.

Invictus managing director, Scott Macmillan, recently said the project was on course.

“The (drill) rig is mobilising in May and should arrive in Zimbabwe around mid-June, it depends on transit from Songo Songo in Tanzania,” he explained.

A second exploration well is also expected to be sunk at a newly discovered site.

“In addition to Mukuyu, there’s a basin margin play; it is a typical East African rift play; it is entirely separate from Mukuyu. We are mobilising a rig and there is only a small incremental cost to drilling this as well.”

American company Mobil once conducted limited exploration work in the area in the 1980s, which excluded drilling.

In 2020, the Zimbabwe government classified the Muzarabani project as one of the priority development projects, which would aid the country’s pursuit of its economic development agenda.

Zimbabwe is aiming to transform into an upper-middle Income economy by 2030.

NewZiana

With Russia-Ukraine conflict raging on, European countries have set eyes on Africa as an alternative supplier of gas and oil, with observers suggesting this could provide an opportunity for Zimbabwe to tap into the multi-billion sector.

The EU heavily depends on energy from Russia, the largest supplier to the bloc.

Russia, which holds the largest gas reserves in the world produces about 17 percent of global natural gas and supplies about 30 – 40 percent of the gas to Europe.

With countries such as Zimbabwe registering gas and oil discoveries, analysts say time could be ripe for the exploration and production to be sped up. Economists and energy experts believe such global changes are usually rare to come by.

In the latest research developments, EU members are now rapidly moving in the African direction, ultimately aiming at cutting the dependency due to sharp political and economic differences that have emerged connected to the Russia – Ukraine war.

Generally, EU is closely coordinating with Algeria, Angola, Equatorial Guinea, Egypt, Nigeria and Mozambique and analysts say its time Zimbabwe also presents itself as a new kid in the lucrative oil and gas sector.

Local economist, Mr Tinevimbo Shava said; “The country needs to realise that such a tectonic shift in global markets happen maybe once in a decade or two and in order to benefit the country needs to get pre-production agreements in place to secure markets.”

Invictus Energy, the Australian company exploring gas and oil locally, expects to start drilling its prospect by July.

Mobil, in the late 1980s, got the ball rolling with a seismic shoot in Muzarabani and the US company did not go ahead to test the licence in the Cabora Bassa Basin, leaving its underground information neglected. However, Invictus plans to tackle this oversight, potentially transforming Zimbabwe as new markets are presenting themselves.

“The rig is mobilising in May and should arrive in Zimbabwe around mid-June, it depends on transit from Songo Songo in Tanzania,” Invictus managing director, Mr Scott Macmillan, explained recently. Following some initial maintenance, drilling should begin in July.

The Muzarabani structure – now known as Mukuyu, after the fig tree – may hold more than 8 trillion cubic feet (227 billion cubic metres) of gas. In addition, it may have another 290 million barrels of condensate.

“With our close proximity to Beira, we could leverage on that and put forward our name in order to cash in on the deals that are currently being signed by our neighbours. Muzarabani is also close to Mozambique, making it cheap to construct a pipeline from there to connect with Mozambican ports for exports,” Shava added.

Statistics show that last year, Algeria and Nigeria were the only two African suppliers of gas to the European Union, accounting for 17 and 4 percent of the EU’s natural gas imports, respectively. The other major players in the region are Egypt, Libya, Equatorial Guinea and Angola.

While countries in sub-Saharan Africa have gas reserves, they have not had the interest from abroad and investment needed for the industry to open up access to Europe, according to Al Jazeera.

Three pipelines currently bring natural gas from Africa to Europe; the Transmed, which allows the export from Algeria to Italy (via Tunisia), the Medgaz, which connects Algeria to Spain under the sea, as well as the Greenstream, more modest in capacity, which connects Libya to Sicily according to media reports.

Energy expert, Lennon Magwadza said; “The country definitely has gas, that has never been in doubt. We have evidence of it from the Exxon Mobil research. It is the oil component that we are doubting is viable but as of gas it is given and we need to cash on the opportunity that has arisen.”

In April, many foreign firms with high exploring ambitions turned to Africa. Angola and Italy have already signed a declaration of intent to develop new natural gas ventures and to increase exports to Italy, according to a statement from the Italian Foreign Ministry.

“We have reached another important agreement with Angola to increase gas supplies. Italy’s commitment to differentiate energy supply sources is confirmed,” Foreign Minister Luigi Di Maio said in a statement posted on his social media pages soon after the end of a two-and-half-hour long visit to Luanda.

Di Maio also wrote that the Italian Prime Minister, Mario Draghi, wanted to add Angola and the Congo Republic to a portfolio of suppliers to substitute Russia, which provides about 45 percent of Italian gas.

The deal was described as “an important agreement that gives impetus to the partnership between Italy and Angola in the fields of renewables, biofuels, LNG and training in  technology and environment.”

The foray follows the signing of agreements with Algeria and Egypt in recent weeks. Algeria is currently Italy’s second-largest supplier, providing around 30 percent of its consumption.

Business Weekly

Gold deliveries to the country’s sole buyer and marketer, Fidelity Printers and Refiners (FPR) rose 88% to 10.176 tonnes in the first four months of this year from 5.4 tonnes delivered during the same period last year
lured by high commodity prices.

FPR acting general manager, Peter Magaramombe, said the company was engaging the authorities with the view to
deal with high taxes, low retention levels and investment to ramp up production.

“The gold deliveries have reached 10.176 tonnes by the end of April from 5.44 tonnes during the same period while the gold deliveries for the month have jumped 79% to 2.481 tonnes in April this year from 1.384 tonnes delivered during the same period last year, ” Magaramombe said.

He said Zimbabwe should capitalise on good international gold prices to ramp up production.

“There is a huge need to ramp up production following the firm commodity prices on the international market,
” Magaramombe said.

Of the 10.176 tonnes delivered during the reviewed period, small scale miners delivered 6.571 tonnes against big mining houses’ 3.605 tonnes.

With pricing firming due to Russia-Ukraine war and global inflation, large scale miners expected to get large export revenues thereby ramping up production.

Experts project large scale miners to give small scale miners a run for their money following good global gold prices.
The Chamber of Mines of Zimbabwe CEO, Isaac Kwesu, said various miners were riding on the current strong mineral prices hence strong investments are needed.

“Miners should capitalise on firm prices to ramp up production in order to get significant export revenue that can
be reinvested into the mining houses operations, ” Kwesu said.

He said there was still a long way to go to achieve an average of 8.3 tonnes per month to reach 100 tonnes a year, although the output was fairly good.

Zimbabwe’s gold export receipts went up 42% to US$1.7bn during 2021 from US$1.2bn earned during 2020 due to improved gold output and firm prices.

Gold deliveries to FPR soared 55% to record 29.6 tonnes in 2021 from 19.05 in 2020 on the back of timeous payments and incentives given to yellow metal producers.

Business Times

Listed miner RioZim Limited, swung to a loss of ZWL42bn in the 12 months to December 31,2021, from a profit position of ZWL$453m reported in the previous year, largely due to subdued gold production.

Overall gold production for RioZim, which operates Renco Mine, Dalny Mine, One-Step Mine, Cam & Motor Mine, plunged 7% in the period under review.

Production at One-Step Mine, fell 18% to 351 kilogrammes (kg) in 2021 from 427kg reported in the previous year.

The low gold output was attributed to lower grades which dropped from the prior year.

At Cam & Motor Mine, there was no gold production during the year as the mine continued with the construction of its BIOX Plant Project throughout the year.

Output at Renco Mine stood at 561kg in the reviewed period , which was 3% lower than 580kg produced in the prior year as increased power cuts throughout the year decreased plant throughput.

Dalny achieved a 6% growth in gold production achieving 209kg of gold from
198kg produced in the prior year.

The growth in gold production was due to increased plant throughput as plant improvements carried out during the year successfully stabilised the plant.

More so the company also took a significant hit in the diamond business as production for the group’s associate, Murowa Private Limited, declined 28% to 414 000 carats from 579 000 carats produced in the prior
comparative year.

RioZim board chairman, Saleem Beebeejaun, expects the group to return to profitability this year following the commissioning of the Bio X plant last month.

“Production is forecast to increase at Cam & Motor after commissioning of the BIOX plant which will turnaround the group to profitability and a positive working capital position. The group forecasts to discontinue the haulage of low grade ore from One-Step to the Cam & Motor plant and migrate mining operations to the high grade Cam & Motor pits, which will result in cost savings and contribute positively to the profitability and cash flows for the group,
” Beebeejaun said.
He added:
“…The future cash flow forecasts are dependent on the level of gold production from this BIOX plant. Therefore,
whilst production is budgeted to increase going forward, there is a material uncertainty that the budgeted production
levels will be achieved.”

Beebeejaun said Murowa is focused on the completion of its Project Crown Jewel which entails increasing the current processing plant capacity to move to a ‘low grade high volume’ strategy in order to sustain production as it is currently processing low grades.

Despite having subdued production, revenue for the group increased 84% to ZWL$5.8 bn from ZW$3.1bn achieved in the previous year due to the depreciation of the local currency against the United States dollar.

Contributing to the revenue was the base metals business which generated ZWL$381m albeit operating under care and maintenance throughout the period.

About 210 tonnes of matte, 78tonnes of PGMs and 21tonnes of copper were produced from the refinery.

The company also reported that engagements with potential financiers for the 178MW solar project were ongoing albeit at a slower pace due to the complexities brought about by the Covid-19 pandemic.

For the 2 800MW Sengwa Power Station the company has put up various financing options to attract potential investors into the project.

Business Times

RioZim base metals refinery, Empress Nickel Refinery (ENR) generated a total revenue of ZW$381 million in 2021 as the operations were under care and maintenance throughout the year.

Rudairo Mapuranga

ENR has been RioZim’s best performer, contributing an average of 77 percent of the group’s revenue with RioZim confident that it will increase the refinery’s capacity.

According to RioZim through its Financial Report for the year ended 31 December 2021 the Kadoma based refinery’s revenue for the year was partially used to fund the care and maintenance costs. The company also said that it was engaging various stakeholders to identify sources of raw material to feed the Refinery to normal production capacity.

During the year, the refinery produced 210 tonnes of matte, 78 tonnes of PGMs and 21 tonnes of copper.

“The Refinery operated under care and maintenance throughout the period 210 tons of matte, 78 tons of PGMs and 21 tons of copper were produced. Revenue of ZW$381 million was generated during the year from the projects at the Refinery which partially funded the care and maintenance costs. The Company continues to engage various stakeholders to identify sources of raw material to feed the Refinery to normal production capacity and our stakeholders will be kept appraised,” the company said in a statement.

The Zimbabwe stock Exchange listed diversified mining company has been exploring various ways to upgrade ENR as the plant is a strategic asset with potential to contribute significantly to the economy.

The company has been exploring various methods of upgrading the refinery so that it is also able to beneficiate lithium concentrate in light of the huge investor appetite to exploit lithium in the country.

Lithium has become a much-sought after mineral not only in Zimbabwe, but also across the globe as the automotive industry moves towards electric cars, which, among other things, use lithium batteries.

According to energy experts, global supplies of lithium used to make EV batteries will fall short of projections for demand to more than triple by 2025 if prices do not rebound to fund expansions. Value addition is therefore important as it will bring more investment into lithium mining and exploration.

Lithium’s vital role in electric-vehicle batteries means automakers, miners and investors are racing to figure out how much supply the world will need in the coming years and also how much it’s going to get.