Mining ZimbabweLatest Mining News, Policy and Industry Updates

VUMBACHIKWE Mine in Gwanda has allayed word of a mass exodus of mineworkers insinuated by whistle-blowers and picked on by the media calling the allegations “unfortunate but expected wherever change is being implemented in any establishment”.

Allegations had abounded that estimated that close to 140 mineworkers had either been laid off or resigned in the past two months.

However, documents provided to Chronicle from the official payroll detailing names, grades and designations of those that have left since the start of the year due to dismissal or resignations are a far cry from the alleged 140.

Instead, only 14 have either resigned or were let go, with a total number reaching 25 including those that had reached their age of retirement or had their contracts run out unrenewed.

“As you may have seen from the circular that triggered the response, we are in a diligent process of running an in-depth investigation into possible misconduct and unexplained gold losses at the mine’s processing plant and wherever the buck stops we have focused our investigations — a process that started on February 7 this year,” said a spokesperson for the mine.

“Expectedly, where people’s livelihoods are at risk any investigation is bound to instil panic and fear and while we do not fault the sources, we assure them that the process is independent and no one with nothing to fear has anything to worry about. In fact, the fingered services manager Marida Van Der Spuy is nowhere near these investigations and
proceedings.”

“We are investigating possible losses and the change that the process will usher in will mean better days for the plant as a business and the workers as part of the Vumbachikwe mine family.”

The Gwanda-based gold mine had been plagued by operational problems that saw a delay in the payment of staff and low output which prompted authorities to look deeper into operations and output resulting in the investigative process.

“The President, in line with national projections to boost gold production and create a middle-income economy for all Zimbabweans by the year 2030 has been clear on what needs to be done. We need to be diligent as producers for the benefit of the nation.

Supporting efforts to plug gold loss are therefore in line with the President’s vision, which he yet again repeated at the historic Independence celebrations held for the first time in our side of the country in Bulawayo. We believe there is no better time for Vumbachikwe to step up to the plate and push the national vision than now,” said the spokesperson.

The company has currently picked up amid the ongoing restructuring and has restored its status as an employer of choice in the mining sector in Gwanda, with salaries and NEC negotiated pay rises now up to date.

“We are not out of the woods until we fully cleanse any possible operational problems as well as finish investigations into staff conduct but certainly our general staff and partners ought to know we are optimistic that the best lies ahead as a mine as well as a player in the national economy as espoused in the President’s Independence message,” said the spokesperson.

Meanwhile, a whistle-blower policy is being carved to ensure two-way communication and that those with information to protect the mine can share it safely while also being able to communicate their fears and problems without fear of reprisals.

The Chronicle

Continuous investments have seen gold production at Caledonia Mining Corporation’s Gwanda-based unit – Blanket Mine – increasing 40 percent to 18 515 ounces in the first quarter to 31 March 2021 compared to 13 197 ounces produced in the previous quarter.

The company is also confident that its investments are likely to see gold production for 2022 expected to range between 73 000 to 80 000 ounces.

Group chief executive, Steve Curtis, in a production update said the output is a record for any first quarter which is usually affected by the rains.

“…during this quarter we have set a new first quarter production record and 18,515 ounces which is ahead of our expectations and reflects the increased capacity at Central Shaft,” he said.

“18 515 ounces is ahead of our expectations and reflects the increased capacity at Central Shaft.
..we are on track to meet our annual production target,” said Curtis.

He said the ramp-up in production towards the quarterly target of 20,000 ounces means that the group is on track to meet annual production targets.

However, during the period, the Group witnessed a fatal accident that resulted in the death of a Blanket employee.

Caledonia became the third listing on the Victoria Falls Stock Exchange (VFEX), where it listed by way of introduction of Depository Receipts as Caledonia’s shares cannot be directly traded in Zimbabwe, due to some limitations on the New York Stock Exchange where they are also listed.

In its previous quarter, the company said it continued to evaluate further investment opportunities in Zimbabwe’s gold sector to transform the Company into a mid-tier, multiasset Zimbabwe-focused gold producer.

The group highlighted that the last 12 months have marked a turning point for the business and the Central Shaft has been a huge project costing approximately $67 million, all funded through internal cash flow and was commissioned in the first quarter of 2021.

In the year to December 2021, production reached 67,476 ounces, which was above the top end of the guidance range and was a new record for annual production.

Caledonia in order to improve the quality and security of Blanket’s electricity supply, minimise environmental footprint and help create a more sustainable future for the business, Caledonia is constructing the first phase of a 12 MWac solar plant that will provide approximately 27 per cent of the average daily electricity demand at Blanket Mine.

According to Curtis, the project, which is expected to yield a modest return to shareholders, is expected to be completed in mid-2022.

During the year under review, Caledonia acquired the mining claims at Maligreen in the Zimbabwe Midlands which is estimated to host a NI 43-101 compliant inferred mineral resource of approximately 940,000 ounces of gold in 15.6 million tonnes at a grade of 1.88g/t.

Curtis said the immediate focus on this asset is to improve the confidence level of the existing resource base and the company is currently re-assaying historic drill cores.

Government is targeting 100 tonnes of gold per year by 2023, a figure which is expected to help the mining sector earn US$12 billion annually.

The multi-billion-dollar industry will be driven by gold, platinum, diamond, chrome, iron ore, coal, lithium, and other minerals.

The background of mineral contribution to the US$12 billion is that US$4 billion will come from gold, US$3 billion in platinum, US$1 billion in diamonds, US$1 billion in coal, US$1 billion in chrome, ferrochrome and carbon steel, half a billion in lithium and US$1,5 billion in other minerals, making it US$12 billion.

The artisanal and small-scale miners (ASM) are also expected to play an important role towards the mining milestone with sector player’s committing to contribute US$4 billion by the targeted period.

Business Weekly

TWO men were found dead in a flooded mine shaft in Gokwe South, police have said.

Munyaradzi Muduri (33) and Admire Mazarahanda (22) both from Chief Njelelele in Gokwe, died upon admission at Gokwe District Hospital after they were retrieved from Umo Mine while in an unconscious state as they were trying to pump out water from the shaft.

Midlands Police Spokesperson, Inspector Emmanuel Mahoko confirmed the incident which took place on 17 April around 2PM.

“The Zimbabwe Republic Police confirms receiving a sudden death report involving two men who died whilst pumping water from a mine shaft at Amo Mine in Gokwe,” said Inspector Mahoko.

The now deceased Muduri and Mazarahanda reportedly went into the shaft to pump water.

“Their colleague who was outside the mine heard them calling for help. He mobilized some villagers who assisted him to retrieve the two,” said Insp Mahoko.

The duo was found in an unconscious state and were rushed to Gwanika Clinic where they were further referred to Gokwe District Hospital.

They were pronounced dead upon arrival.

Inspector Mahoko urged people in the mining industry to get guidance from experts and the Ministry of Mines and Mineral Development in putting effective safety measures in their work.

The Chronicle

Tharisa Capital says the development of the tier 1 Karo Platinum Group Metals (PGMs) project will see the group’s PGM production doubling within the next 24 months.

The London – listed platinum miner which recently acquired a controlling stake in Karo Holdings, intends to spend US$250 million to complete the first phase of the project.

“We progressed our much anticipated cross borderstep by announcing our plans for developing the tier 1 Karo PGM project, doubling our PGM production within 24 months,”

Phoevos Pouroulis, the Tharisa’s chief executive said in a commentary for the Group’s second quarter ended 31 March 2022.

He said the transformation of Tharisa into a multi-asset, multi-commodity and multijurisdiction business, combined with strong PGM and chrome prices, as well as the further production upside from initiatives including the ramp of the Vulcan Plant at the Tharisa Mine, provide a very healthy outlook for the prospects of the Company in the second half of the year, and beyond.

Tharisa increased its shareholding in Karo Holdings to 66.3 percent and this was completed post quarter end.Pouroulis said an implementation study at Karo Platinum provided the robust economics of the first phase of the project while still presenting significant growth opportunities.

According to Tharisa, at the start of production in two years, annual production will be 150
000 ounces of PGMs in concentrate during the first phase.

Tharisa’s mining lease area for the Karo project covers an area of 23,903 hectares and is located within the Great Dyke in the Mashonaland West District, approximately 80km southwest of Harare.

The Zimbabwe government has a 15 percent stake in the Karo project and it has an option to buy another 11 percent.

Based on Karo’s valuation of US$770.4 million, the Government would have to spend US$84,7 million if it chooses to take up the option.

According to Pouroulis, the Salene Chrome plant commissioning is underway and production due to commence in Q3 FY2022.

Tharisa acquired a 90 percent shareholding in Salene Chrome Zimbabwe (Pvt) Limited (Salene) in 2018 from the Leto Settlement Trust (Leto), a related party being the beneficial shareholder of Medway Developments Limited, a material shareholder in Tharisa.

The effective date of the acquisition was 15 May 2018 and Leto retained a 10 percent free carried shareholding in Salene and was entitled to a 3 percent royalty on the gross proceeds from the sale of the chrome concentrates produced.

Salene was awarded three special grants under the Zimbabwe Mines and Minerals Act covering an area of approximately 9 500 hectares (95 km2) on the eastern side of the Great Dyke in Zimbabwe, which entitles it to mine the minerals thereon including alluvial chrome, being at surface chrome fines generated from seams as a result of weathering.

The country is envisioning a US$12 billion mining industry by 2023. PGMs are expected to contribute US$3 billion with production expected to jump from about 979 thousand ounces in 2018 to about 2, 5 billion ounces annually in 2023.

Gold, diamonds will contribute US$4 billion and US$1 billion respectively, while chrome, iron ore and carbon steel will contribute US$$1 billion while coal and hydrocarbons will contribute the same. Lithium at US$500 000 while other minerals will constitute US$1.5 billion.

Business Weekly

Is Zimbabwe a good investment destination for miners or not? It all depends on who you ask.

Each year, Canada’s Fraser Institute asks over 2000 mining companies to assess which countries are best to invest in. The latest Investment Attractiveness Index, which has just been released, says Zimbabwe is the worst mining jurisdiction in the world.

Zimbabwe replaced Venezuela at the bottom, after an almost 11-point drop in its policy score.

African countries fare badly. Sitting with Zimbabwe in the bottom 10 of the index are the DRC, Mali, and South Africa. Botswana lost its top spot in Africa, because investors are worried by uncertainty over policy on protected areas, political stability, labour regulations and taxation.

Western Australia was ranked the best mining jurisdiction in the world.

Not so open for business

The survey reflects how badly Zimbabwe is doing in terms of managing perception, despite a spirited “Open for Business” campaign to attract FDI.

Fraser’s survey approached over 2 000 global mining companies. They were asked how a country’s mineral assets and public policies affect their decisions to invest. Their verdict on President Emmerson Mnangagwa’s administration was damning.

“All respondents claimed that the uncertainty regarding the administration, interpretation, or enforcement of existing regulations, the country’s legal system, its taxation regime, its infrastructure, trade barriers, its political stability, and security were major areas of concern that discouraged investment in the country,” the report says.

The companies surveyed say 40% of their investment decision is based on policy factors. Combined, the companies involved represent exploration spending of US$2.5 billion in 2021.

A recent report by the Chamber of Mines said while mining is growing, it faces a funding shortfall of US$10 billion over the next five years to really meet its potential. This shows Zimbabwe’s failure to attract the large mining investors that it needs to fully reach its resource potential.

According to the Chamber, the retention system, under which miners must sell 40% of their export earnings to central bank at the overvalued exchange rate, is hurting growth.

“This situation is resulting in loss to mining companies translating to at least 20% of gross revenue,” the Chamber says.

Zimbabwe: Bad for you, great for us

But, not everyone will agree with the new Fraser report.

Those surveyed won’t touch Zimbabwe with a long barging pole. Nico Muller, CEO of Implats, is happy that they see it that way.

“From a group perspective, I’d have to say Zimbabwe has been our best jurisdiction in which to operate over the past 20 years. It’s the jurisdiction in which, thanks to the leadership of Alex (CEO Mhembere) and his team, we have the least amount of disruptions, we have had the most predictable production profile,” Muller told a recent mining indaba in Johannesburg.

“We also have our safest operations, (and) the best control over costs, and our projects there are always on schedule.”

As for those who see Zimbabwe as a big risk, Muller said, wryly: “Personally, I am quite happy that the jurisdiction is seen as a risk by most other competitors because it allows us to continue expanding our interests in the jurisdiction”.

He did admit there is risk, “because a government that is desperate for foreign currency earnings will often tend to extract a great proportion of our foreign currency earnings.”

In the last half-year, Zimbabwe’s old currency problems shaved 32% of Zimplats’ year-on-year net profit.

Yet, this has not put Implats off Zimbabwe. It has had no problems repatriating its earnings. The company has, in fact, recently announced US$1.8 billion in new investment into Zimbabwe, which will expand mining and refining capacity, including a base metal refinery. That Zimplats is funding this expansion from internally generated resources – not loans – shows how profitable the company is.

Questioned at the indaba on the ethics of investing in Zimbabwe under a ZANU-PF government, Muller replied: “We are very comfortable working with the Zimbabwe government. Our participation is always aimed at improving conditions. You are in a far more constructive position if you participate within the economy because your ability to influence things in a positive direction is strengthened. You can encourage the authorities to move in the right direction.”

Zimplats is not alone.

Tharisa is spending US$250 million on a new mine, while Caledonia has just reported a record quarter and is looking for new mines to buy. Russia’s Vi Holdings is building the country’s biggest platinum mine, while Alrosa, the world’s biggest diamond company, has acquired exploration rights. Amplat’s Unki launched a US$60 million smelter in 2019 and has invested a further US$40 million to expand capacity there, which will increase output by 30%.

NewZwire