Mining ZimbabweLatest Mining News, Policy and Industry Updates

THE cancellation of the US$225 million deal between Zimbabwe Iron and Steel Company (ZiscoSteel) and ZimCoke was necessitated by the need to maintain the former as an integrated firm and the arrangement was not a “win-win” deal, ZiscoSteel board chair Engineer Martin Manuhwa has said.

The Ziscosteel board terminated a contract with ZimCoke which was supposed to take over the coke ovens within the Ziscosteel plant.

In 2017, both firms entered into an agreement when ZimCoke bought the coke-making assets of Ziscosteel consisting of the plant and machinery, land and buildings as well as associated infrastructure of coal handling and wagons.

However, Government terminated the deal upon recommendation by the previous board led by Professor Gift Mugano which believed the deal was not in “good faith”.

ZimCoke have since sought compensation from the State claiming the deal wasted their time and resources during their three-year stay at the plant.

But during the recent visit by Industry and Commerce Minister Dr Sekai Nzenza to the ZiscoSteel plant, current board chair, Eng Manuhwa said the arrangement was not a winwin.

Industry and Commerce Minister Dr Sekai Nzenza
“We have cancelled the ZimCoke deal as the board and we have advised our ministry, Cabinet and all stakeholders. Agreements of this nature were not on a win-win platform and we wanted to try and maintain ZiscoSteel as an integrated steelmaker, rather than breaking      the company into many parts,” said Eng Manuhwa.
ZiscoSteel is expected to sign a three-year contract with their new investor, Kuvimba Mining Holdings that will see the investor investing largely in human capital to strengthen the balance sheet.

The contract, with a sunset clause, is also open for extension of the contract after its lapse depending on the state of affairs by then.

The steelmaker is expected to receive an initial US$300 million capital for immediate resuscitation of the company and Eng Manuhwa said ZimCoke was not part of the revival strategy.

“As professionals on the ground, we want to see smoke in the next 12 or so months and the methodology or proposal by ZimCoke are not part of the strategy hence we have cancelled it.

All the legal elements required have since been undertaken,” he said.

Although appreciating efforts done by previous boards and the potential investors, Eng Manuhwa reiterated that the deal was one sided.

“Because of that reason, we had no option but to cancel the deal. We now need a thorough interrogation and feasibility study of the pathway ZiscoSteel want to take, which is an integrated approach as a steelmaker,” said Eng Manuhwa.

Technical teams from both Kuvimba and ZiscoSteel are already on the ground carrying out feasibility studies that will lead to the purchase of latest technology to augment what is already on the ground before signing of MoU and kick start production.

ZiscoSteel, located in Redcliff became defunct after a string of operational problems.

By early 2008, the company was producing less than 12 500 tonnes, way below the breakeven capacity of 25 000 tonnes and was shut down later that same year.

In November 2010, Essar Holdings, the African unit of India’s Essar Global agreed to buy 54 percent in ZiscoSteel in a deal worth $750 million, with the Government keeping 36 percent and 10 percent to be owned by minority investors.

But the deal eventually fell through due to a number of technicalities.

The Chronicle

THE mining sector has expressed optimism it will meet its annual production targets despite being disrupted by rains, which have affected several mining operations in the first

Mines Parliamentary Portfolio Committee chairman, Mr Edmond Mkaratigwa, said the sector was encouraged by the implementation of the National Development Strategy (NDS1), and were geared to buttress its success.
Mine
He said the mines committee is currently touring gold production operations to ascertain the impact of S.1. 40 of 2022 Mining (General) (Amendment) Regulations on the gold production sector.

Among other issues, the Statutory Instrument sets fees for special minerals lease inspections, prospective lease grants, annual fee for block of claims, special grants and mining leases of precious stones, renewals, transfers and export permit fees.

During the first tour, the portfolio committee visited Bubi Milling Centre in Matabeleland North and milling centres in Gwanda, Matabeleland South.

He said while the incessant rains received in some parts of the country do impact on gold operations, the disruption levels will not offset set output targets as the sector anticipates a production increase instead.

“It (rain) will not affect overall gold targets because its natural in the gold sector that the rainy season may have some low production levels especially in small-scale mines,” said Mkaratigwa.

“The production levels normally rise after the rainy season and we do not expect any dip in production as other seasons of the year will be compensatory.

“Instead, we anticipate a significant increase owing to NDS1 implementation among other enabling efforts being undertaken.”

Under the Second Republic, the country targets to establish more gold service centres across all the mining regions as a strategy towards attaining the US$12 billion milestone by 2023 with the gold sub-sector expected to contribute US$4 billion.

“There are mixed findings in terms of positives and findings but largely, a lot of improvements have happened in the sector,” said Mkaratigwa.

“There are also common challenges but basically, NDS1 has carried us to a better position and further steps building on the foundation will definitely help us build our country. We have visited just after the rains. So, the mines have not been fully operational.”

The Chronicle

ZIMBABWEAN tax experts this week reactivated the push for government to establish a public exploration firm, as they cast doubts over the credibility of mining data from private multinationals.

Giving insights during a workshop, which ran under the theme; ‘Fight Inequality’, which gave journalists an impression of tax dynamics in the resources sector, the experts warned that exploration data manipulation had opened floodgates for unrestricted plunder.

They said manipulated exploration figures had a huge bearing on the amount of royalties that governments earn from minerals.

The fresh fears added to concerns that billions were being siphoned by big investors at the expense of millions of people battling to shake off mounting hardships.

It also confirms reports that out of an estimated US$12 billion spirited out of Zimbabwe through illicit financial flows, the bulk was pillaged out of the mining industry.

But the rush for Zimbabwe’s minerals has gained traction in the past decade, with Chinese investors leading an influx that has been felt from platinum to gold and, recently, to lithium. On the lithium front, Beijing’s investors poured US$600 million in the last quarter of 2021 alone, demonstrating how Zimbabwe’s minerals have assumed higher demand on the global scale.

Experts told the Zimbabwe Independent that government should take control of the exploration system, instead of leaving multinationals to take charge and wander along minerals.

“Zimbabwe does not know the minerals that we have,” economist Vince Musewe, who spoke to the Independent on the sidelines of the workshop, said.

“We have to know what we have but we can’t rely on exploration companies because the results they produce are obviously to their own benefit. They will under-declare what they find and sometimes they don’t tell you what they have found because they make money from it.

“We can’t wait for third parties to determine that for us because they will produce what benefits them. Zimbabwe needs to have its own exploration. Investors are coming in to explore for us. The Ministry of Mines and Mining Development needs to explore for us and know the value of our resources and potential mineral revenue,” he added.

Towards the unceremonious exit of the late former president Robert Mugabe, ex-Mines and Mining Development minister Walter Chidhakwa tabled a plan to transform the Minerals Marketing Corporation of Zimbabwe (MMCZ) into an exploration company.

The plan ended when he exited government in 2017.

Musewe said accurate exploration data enhances royalties’ collection, helping Zimbabweans out of the heavy tax burden imposed on them by government, as it seeks to generate enough revenue to run the country.

“We need to actually project what royalties we can make from the minerals that we have and you will find that is enough to fund the tax bill of the country if we take away illicit financial flows and account for the royalties,” he said.

“Other counties do that then make sure that their developmental capital does not come from individuals but their resources and that is the paradigm shift that we need. We have to stop squeezing citizens of their money.

“Zimbabweans are going through a lot. We need to reduce their taxes. We can receive that tax from royalties. You will find that it will be profitable and companies will pay, especially when commodity prices are going up on the international market,” Musewe said.

He called for the broadening of Zimbabwe’s tax base, simplification of the tax collection regime, a reduction in tax avoidance and full monitoring of tax evasion by companies and individual.

The Independent 

VIOLENCE erupted on Wednesday last week at Dandi 5 gold mine in Matobo, Matabeleland South province, after people suspected to be from Harare invaded the mine.

The gang reportedly used machetes and unidentified weapons to drive out workers from the mine.

Confirming the incident, mine owner Ndodana Moyo told Southern Eye that: “The gang came all the way from Harare with fake papers claiming ownership of the mine. They claimed to be the rightful owners of the mine.

Moyo said they were reclaiming ownership of the mine following the skirmishes, adding that a similar incident happened in 2019 when another group of people tried to invade the mine.

Contacted for comment, Mines ministry deputy director Brian Mtewa said: “I am not aware of the issue, I am yet to receive anything.”

Matabeleland South police spokesperson Inspector Loveness Mangena also said she had not yet been notified about the incident.

“I will contact Matopo police to find out if there has been such a case recorded because normally, such cases would have been reported (already),” she said.

According to a report from the International Crisis Group, violence associated with Zimbabwe’s gold mining sector killed hundreds of people in 2019 and early 2020.

The violence stemmed from miners fighting over gold or gangs robbing miners at gunpoint.

Newsday

RAN Mines Private Limited, a gold asset that has been at the centre of a protracted dispute between Zimbabwean investors, lurched into fresh controversy last month after winning a High Court case giving it a nod to evict retrenched workers out of its compound.

The 123-year old Bindura-based operation closed in 1999.

However, it is being brought back to operation by investors led by leading human resources executive Jack Murehwa.

Fighting over the asset reached a tipping point late last year when G&P Industries said it was pressing ahead  with plans to extract its first bullion at the mine in 22 years.

Blackgate warned that sinking shafts at the operation was illegal until the government makes a determination over ownership of the mine, which hit headlines in 2020, when 30 artisanal miners perished under its flooded shafts.

Documents obtained by the Zimbabwe Independent indicated that on March 21, Munyeza escalated her battle to Chief Justice Luke Malaba, seeking his urgent intervention.

She has previously written to President Emmerson Mnangagwa, the Zimbabwe Anti-Corruption Commission (Zacc) and the Ministry of Mines and Mining Development seeking a resolution to the dispute.

But around the time she approached the chief justice, her rivals were moving to evict former workers out of its compound.

Rights groups and ruling Zanu PF estimates show that up to 500 families have been affected by the evictions, although the court case listed 18 representatives of the former workers.

“Despite demand, it is alleged the 18 defendants refused to vacate the mine houses,” High Court papers, seen by the Independent in a case filed by Blackgate, point out.

“The defendants (former workers) failed to discharge the onus upon them to show an entitlement to continue holding on to the houses.

“The defendants and all persons claiming occupation through them and of all other persons in use, possession and control of any part of the Ran Mine compound without the consent of Ran Mine shall forthwith vacate the compound,” High Court judge Justice Jacob Manzunzu ruled on March 7.

The ruling, which attracted a rebuke from the Zimbabwe Lawyers for Human Rights Organisation further states: “ Failing vacation, the Sheriff, with the assistance of the Zimbabwe Republic Police if necessary, is authorised to eject the defendants and all persons claiming occupation through them and of all other persons in use, possession and control of any part of the Ran Mine compound without consent of the plaintiff…”

But before the messenger of court moved to effect the court order, ruling Zanu PF officials are said to have negotiated for a grace period.

The former workers’ plan collapsed after former colleagues testified against them, saying the correct position was that they had been retrenched and paid a ZW$5 000 relocation package in 1999.

A tussle over houses played out as Blackgate mounted its appeal to Malaba.

“This (mining) is all happening under the supervision of the Ministry of Mines as they have allowed them to continue mining on and establishing a mining processing plant on the disputed claims,” Munyeza wrote in a letter to Malaba dated March 21, 2022.

“We still wonder how they accessed the permission and paperwork to construct a mining processing plant on disputed claims as well as how they are selling their gold output to Fidelity Printers and Refiners.

“Mr. Jackson Peterson Murehwa has been bragging that he has an “iron claw” on the Ministry of Mines and Mining Development and the Judiciary wrapped around his finger, which implies that he is undermining the judicial foundations in legislation enshrined in the constitution of Zimbabwe, which is in tandem to committing intentional malicious treason.

“The commencement and initialisation of these criminal case investigation proceedings were informed by over a decade long legal tug of war that has been characterised by relentless blatant acts of corruption, fraud, forgery, collusion and connivance between the Ministry of Mines and Mining Development and the 2nd and 3rd Respondents under HC CASE NO. 6425 and HC 4431/20 &SC 296/11.

“They have been using this purported allegiance to the Highest Office of the land in order to circumvent legislation stipulated in the Mines and Minerals Act for them to corruptly benefit from illegal ownership of the mining claims,” she alleged in the letter.

The chief justice turned down the request to intervene, while Murehwa had not responded to Blackgate’s allegations at the time of publishing.

“Regrettably the Office of the chief justice has no power to interfere in litigation pending before a court on behalf of one of the parties,” Malaba said in his response in a letter dated March 25, 2022.

“Further, the Constitution mandates all judicial officers independently apply the law, impartially, expeditiously and without fear, favour and prejudice.

“This is how the chief justice expects the matter to be dealt with by the respective court,” he said.

Contacted for comment, deputy Mines minister Polite Kambamura said: “Can you refer to the provincial mining director Mashonaland Central with regard to that, if there is a dispute”.

The independent 

A MINISTRY of Mines and Mining Development probe into diamond exploration of big multinationals in the 1990s exposed shocking evidence of plunder. The big resources outfit, spirited away substantial tonnes of diamonds to South Africa, claiming that its shipments were only samples that were going to laboratories for studies.

It is difficult to tell how much Zimbabwe may have lost in the process. But government claimed that the figure ran into multiple millions of United States dollars.

At one point, government threatened to sue, but the hype fizzled out. The important thing was that there was a quick response.

This was important because as analysts said this week, exploration is a vital part of the resources sector which should not be left to private companies alone. Exploration gives a country the extent of its endowment. Exploration leads to knowledge and understanding.

Exploration is an important step in finding minerals so they can be potentially mined. Demand for minerals is increasing. For example, the world needs more lithium to manufacture batteries for electric cars, which are now in high demand.

This demand is helping drive an increase in exploration across the world, especially as new inventions bring demand for new minerals. Unfortunately, Chidhakwa’s dream died the moment governments changed in 2017, with focus now shifting to other issues.

But by so doing, Zimbabwe is making a huge mistake, a mistake that the country has lived with for four decades. By dropping the idea of an exploration company, the country is continuing to hand the stewardship of its resources to foreign firms, which will explore and use the data as they see fit. This week, there were concerns that exploration being carried out by multinationals cannot be trusted because they tend to use the data for their benefit. These reports are correct.

But improvements in knowledge for analysing reports and giving accurate feedback to government about the resources map must also be prioritised.

Already, there have been reports that data from many years of exploration in the past century is available, but it cannot be found. If government had taken the lead from 1980 to carry out its own exploration, the result would be different today.

This is why the push by tax experts this week to reactivate plans to establish a public exploration firm must be taken seriously.

The experts are worried that plunder and pillage may continue until the resource administration regime is strengthened. They are very correct. Zimbabwe’s wealth must be used to benefit its citizens, and those investors, who exploit minerals in a fair manner.

The time to act is now.

The Independent