Mining ZimbabweLatest Mining News, Policy and Industry Updates

The amendment of the Mines and Minerals Act will deal with organized cartels that have been involved in illicit financial flow and smuggling of minerals from the country, Chairperson of the Parliamentary Portfolio Committee on Mines and Mining Development Hon Edmond Mkaratigwa has said.

Rudairo Mapuranga

The sentiments have come after Executive Director of the Centre for Natural Resource Governance (CNRG-Zimbabwe) Mr Farai Maguwu said the government was losing close to US$20 billion due to organized crime in the mining sector.

Maguwu said smuggling levels in Zimbabwe had escalated in 2022 as compared to 2008 where the then governor of the Reserve Bank of Zimbabwe (RBZ) Dr Gideon Gono said the country was losing $14.4 billion annually to diamond smuggling alone back in 2008.

“If mineral smuggling was a problem in 2008, it has reached pandemic levels in 2022,” Maguwu said.

There have been reports that the diamond and gold sectors have been captured by organized criminal cartels, most of whom use airplanes to smuggle the minerals from the country.  Reports have indicated that there is a criminal syndicate called IE&C which smuggle diamonds to South Africa for onward exportation to Britain.

In 2003 retired businessman Ian Macmillan, his son Ewan, pilot Clair Burdett and mining director Collin Rose appeared in court accused of smuggling about $68-million (about R436-million) of gold to SA through a “well-organised” crime syndicate. They were accused of smuggling almost 7 500kg of gold through a crime syndicate called IE&C.

Hon Mkaratigwa said the Mines bill was going to deal with informal mining as informal miners have been accused of selling their productions to the informal market.

“Definitely these criminals are organised and what we are doing as Parliament is to unclog as much as possible, all potential loopholes. At law, the Bill seeks to achieve that through reducing informal mining operations as much as possible. Informal mining is a choice but to some it has been just an alternative due to de-motivations against the formal system. That is why legally, we are working on unblocking that,” Hon Mkaratigwa said.

The Chairperson of the Parliamentary Portfolio Committee on Mines and Mining Development also said that the government was going to deal with institutional loopholes that allowed cartels to loot and smuggle the country’s minerals.

“On the other hand, there are institutional loopholes which we can call technological solutions and requisite expertise as well as adequate human resourcing, which can tackle that. These issues are critical at our territorial gateways where these precious minerals are mostly passing unnoticed. We have also advanced aspects related to training of personnel involved in mineral handling at all levels in the country, so that they are capable of identifying these resources and make it easy to also reduce their illegal movement among and through the population. In that respect we have made an inquiry into that, and identified gaps we have recommended to the government for implementation, and we are following up on that, while the other report that is almost ready, contains further recommended solutions in that respect.

“Another problem we identified was on intergovernmental institutions interoperability and there, we have identified gaps. There are limited synergies as the agencies have been working within a silo mentality with less cooperation. As a result, skills with one department have not been benefitting the whole but departmentally, at operational level. We have recommended redress against such,” he said.

Mkaratigwa said Parliament has been working flat out to see that the problem of mineral leakages has been dealt with once and for all with different stakeholder consultations done to achieve a crime free mining sector.

“A lot has been happening, but the bottom line is what the government sought to achieve through NDS1, which are overall the best conditions for business, be it small or big. We have also used various means to that end and enforcement of existing legislation is also key. Parliament has often called the various government departments to account in that regard and through different tactics, we have harnessed existing efforts towards the benefit of our great country.” Mkaratigwa said.

PRODUCTION at listed multi-asset mining concern, RioZim, was affected by exchange rate distortions during the year ended December 31, 2021.

The firm said operations were affected by power outages across its mines, along with policy inconsistencies.

The firm reported a 7% decline in gold output, but revenue increased by 84% to $5,8 billion, chairperson Saleem Rashid Beebeejaun said in a commentary to the company’s financial statements.

The RioZim chairperson cited an unfavourable operating environment for the drop in output.

“The operating environment throughout the year was challenging,” he said.

“It was characterised by significant exchange rate distortions, ongoing power supply deficits and policy changes among other challenges, which negatively impacted the operations of the group,” the RioZim boss added.

He said the COVID-19 pandemic presented further challenges to a macroeconomic environment that was already volatile.

“The foreign currency retention was revised downwards to 60% in January 2021 from 70% in the prior year. This not only reduced the value realised for the group’s gold produce but also negatively impacted the timeous execution of the group’s projects, which predominantly required foreign currency,” he added.

Rashid Beebeejaun was referring to a foreign currency retention policy where exporters surrender part of their US dollar earnings in foreign currency, with the rest coming in Zimbabwe dollars at the prevailing exchange rate.

“This continued to put pressure on the group’s profitability as inputs tracked rates on the alternative market. The combination of a challenging operating environment and the delays to the completion of the BIOX plant project due to inadequate foreign currency resulted in the company incurring a loss for the year,” Beebeejaun said.

He said gold production, declined by 7% from 1 205kg produced in the prior year to 1 122kg.

He said due to delays in the completion of the BIOX plant project, the lifespan of the stopgap One-Step mining operation was extended and continued to supply ore to RioZim’s Cam & Motor plant.

Beebeejaun said production at Renco Mine, another RioZim asset, dropped by 3% because of reduced plant throughput as a result of increased power cuts.

Production at Dalny Mine improved by 6% as a result of increased plant throughput.

Gold production at its One-Step Mine fell by 18% from the prior year’s production of 427kg to 351kg as a result  of  lower grades.

The RioZim chairperson said there was no gold production from Cam & Motor Mine during the year as it continued with the construction of its BIOX plant project.

Diamond production at the group’s associate, RZM Murowa, declined by 28% to 414 000 carats, from 579 000 carats produced during the comparative period in 2020.

Beebeejaun said RioZim was engaging with potential financiers for its 178 megawatt solar plant project.

He added that discussions were progressing at a slower pace as a result of the complexities brought about by the COVID-19 pandemic.

On the  2 800 megawatt  Sengwa Power  Station, he said due to a mix of considerations brought about by the COVID-19 pandemic, the company had put up various financing options to attract potential investors to the project.

Newsday

Premier African Minerals chairperson Neil Herbert has resigned from the board with immediate effect.

Herbert, who joined the company as non-executive chairperson in 2020, has left the board to pursue other business interests including his recent appointment as executive chairperson of Atlantic.

“Herbert rejoined the Premier board at a critical time in the rejuvenation of the company and I express my thanks and appreciation for this,” Premier chief executive officer George Roach said in a statement last week.

“Herbert leaves the board to pursue his other business interests including his recent appointment as executive chairman of Atlantic Lithium. I have agreed to act for a limited period as the interim chairman,” he said.

Roach said Premier was in consultation with eligible candidates and would announce further corporate changes in the near future.

Herbert left the company after it had just signed a joint venture agreement with Li3 Resources Inc to acquire 50% interest in Premier’s lithium assets located in Mutare.

The London Stock Exchange-listed resource group acquired the claims located in the Mutare Greenstone Belt in 2020 and were held by the company’s subsidiary LicoMex Private Limited.

Li3 Resources is a private lithium-focused exploration company founded and backed by senior mining executives who have had prior success in the lithium sector.

Herbert was appointed director of the company on August 28, 2019.

He has nearly three decades experience in finance. He trained with PwC and has been involved in growing mining ventures, both as an executive (including Antofagasta plc, Brancote Holdings plc and UraMin Inc) and as a manager of investments (including Galahad Gold plc and Polo Resources Limited).

Herbert has served as a director of several stock exchange-listed companies across the world and was previously a director of Premier between August 20, 2013 and April 22, 2016.

He is also chairperson of IronRidge Resources, Helium One, Siderian Resource Capital and is the acting chairperson of MN Holding Limited and its subsidiaries which operate Otjozondu.

Premier is a multi-commodity mining and natural resource development company focused on southern Africa with its RHA Tungsten and Zulu Lithium projects in Zimbabwe.

The company has a diverse portfolio of projects, which include tungsten, rare earth
elements, lithium and tantalum.

Newsday

Tharisa, the South African company developing a platinum mine in Zimbabwe, plans to sell US$50 million of bonds on the Victoria Falls Stock Exchange to help finance the project.

The miner last month announced a US$250 million first phase investment in Karo mine, expected to begin development later this year.

“While the financing solution for the development of the Karo Platinum project is well advanced, Karo Platinum is seeking to tap the capital markets in Zimbabwe to part finance this impactful development,” Ilja Graulich, Tharisa’s head of investor relations, said Wednesday.

The miner plans to offer the bond by the second half of this year. It would be the first debt listing on the exchange.

The bourse in Victoria Falls opened in October 2020. It has just four listings: SeedCo, Caledonia Mining Corporation, Bindura Nickel Corporation, and Padenga Holdings. Known as VFEX, it offers tax exemptions on capital gains and promises investors the ability to repatriate funds from a country where foreign exchange is typically in short supply.

A VFEX-listed exporter is allowed to keep 100% of what they earn from any incremental output above its monthly average.

Tharisa’s planned sale adds to similar proposals by the government to begin trading debt on the VFEX, said Justin Bgoni, the chief executive officer of the exchange.

“It will allow a creation of a yield curve on VFEX, provide alternative investment and more importantly show that VFEX is a credible capital raising platform,” he said.

Zimbabwe’s Great Dyke holds the world’s second-largest PGM deposits, and gives producers the lowest-cost platinum and good skills, Tharisa CEO CEO Phoevos Pouroulis said in April as he announced development plans for Karo.

Karo will produce 150,000 ounces of platinum group metals in its first phase and will have a 20-year life. It joins other mines on the Great Dyke. Zimplats produces 580,000 ounces per year, Unki 190,000 ounces and Mimosa 120,000 ounces. Great Dyke Investments’ delayed Darwendale project will, on completion, be the largest producer, at 860,000oz per year.

Bloomberg (additional reporting by newZWire)

Listed diversified group, Padenga Holdings Limited’s revenue grew 10% to US$78.5m in the reviewed period from US$71.6m achieved in the previous year on the positive performance in the gold mining division.

The uptick in revenue comes when the crocodile and the alligator businesses faced reduced demand and changing market dynamics.
Padenga recently acquired a controlling stake in Dallaglio group, which contributed 66% to the total revenue while Zimbabwe crocodiles contributed 31%. Texas alligators contributed 3%.

“Solid group revenue performance was largely driven by exceptional contribution from the mining operations. This follows the on-line commissioning of the new Eureka Gold Mine in Guruve in October 2021. The
Eureka Gold Mine achieved its plant nameplate capacity seven weeks earlier than forecast on November 25, 2021,
” board chairman, Thembinkosi Sibanda said.

The mining division made an operating profit of US$8.4m. There was a 43% increase in operating costs and the mining business generated positive cash flows of US$10.1m from its operations that contributed to working capital relief.

“Gold volumes for the Dallaglio group are therefore anticipated to increase 25% during 2022 with a concomitant 20% reduction in the all in sustaining costs per ounce produced . This will increase margins and
enhance profitability. Eureka produced 976kgs which was an improvement from 722kgs in the prior year, ” Sibanda said.

He said the mining sector picked up its pace in the second half of the year as Eureka made its successful commercial production volume in September 2021 following its official opening on October 21, 2021 by President Emmerson Mnangagwa.

Despite growth in revenue, Padenga, however, plunged into a US$7.4m loss from a profit of US$3.2m achieved in the previous year.
Total assets stood at US$169.8m from US$151m in 2020.

Business Times