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Lithium Mining in Zimbabwe on the rise

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Lithium Mining in Zimbabwe on the rise

Lithium Mining in Zimbabwe is on the rise with several projects in the exploration phase forecasted to kick-start production in 2023.

Zimbabwe has the largest lithium reserves in Africa and the fifth-largest deposits worldwide. It has the highest number of Lithium projects under exploration on the continent.  Below is a comprehensive list of current lithium mines from the exploration phase to full-scale operations in no particular order.

Kamativi Lithium Mine

 

Kamativi-Mining-Company-KMC
Workers pose for a photo at Kamativi Lithium Mine

Kamativi Mining Company (KMC) is rapidly spearheading its exploration drive to transform the former tin mine into one of the biggest spodumene and Petalite ore body in Zimbabwe.

Mining Zimbabwe visited Kamativi Lithium Mine to assess the progress and witnessed Diamond drill rigs drilling at different locations to delineate the potential deposit.

Between September 2021 and March 2022, Phase-one drilling commenced with 38 holes being drilled to the depth of 2140m. Phase-one drilling focuses on open-cast areas with shallow holes for Open Cast Mining.

Between April 2022 – June 2022, Phase-two drilling commenced and KMC managed to drill 28 holes of 5000m. The drilling was for underground mining and Mineral Processing research is still underway.

Phase-two detailed drilling of 100 holes of around 15000m is being carried out with detailed exploration for underground mining and resource report and feasibility study to be expected after drilling is completed.

To date, 4900m have been drilled from late September 2022 using the 8 rigs on site. Exploration is going to be upscaled by an additional 4 rigs which are expected to be on-site by early November 2022 (bringing the total number of rigs on-site to more than 12 rigs) in mid-November.

The type of lithium dominant at KMC

Preliminary sample results have shown encouraging results for the mine hosting high-grade lithium spodumene, petalite with the mine having the potential to become one of the biggest lithium producers in Africa.

Spodumene is an essential supply of lithium to be used in ceramics, cell phones and car batteries, medicine, Pyroceram and as a fluent substance.

With the rise and popularity of Electric Vehicles (EVs), spodumene has become the most important commodity in the world with nearly all battery producers looking for mines that can supply them uninterruptedly spodumene for the future of the transport sector.

Bikita Minerals

Bikita Minerals machinery

Bikita Lithium Mine is Zimbabwe’s biggest lithium producer and is the home to the world’s largest-known deposit of the metal at around 11 million tonnes.

Bikita Minerals has been an active mining site for around 100 years.

For over 50 years, the mining and extraction of lithium minerals has been at the centre of Bikita Minerals’ activities. Today, Bikita Minerals is the World’s foremost supplier of the lithium mineral Petalite.

China Sinomine Resource Group, which acquired Bikita Minerals will invest US$200 million to build a plant and expand its existing mining operations.

Arcadia lithium mine

Zimbabwe also has upcoming projects with the Arcadia lithium mine expected to start delivering lithium-containing minerals spodumene and petalite next year.

It is anticipated that Arcadia will be producing an average of 212,000 tonnes (t) of 6% spodumene concentrate, 216,000t of petalite concentrate, and 188,000 pounds (lbs) of tantalum per annum from Arcadia. The project is estimated to have a mine life of 12 years.

The project hosts greenstone rock units of Arcturus formation, a member of the Harare Greenstone Belt (HGB). It is housed within a series of stacker, petalite-spodumene bearing pegmatites, with an average thickness of 15m, in the HGB. The pegmatites extend up to 2.5km along strike.

The mineralisation at the Arcadia deposit is predominantly made up of petalite and spodumene, while the secondary minerals are eucryptite, bikitaite, lepidolite, and tantalite

Huayou, one of the world’s major producers of cobalt, last year completed a 422-million-U.S.-dollar purchase of the hard-rock lithium mine from Australia-listed Prospect Resources.

Sabi Star Lithium Mine

Shenzhen-listed Chengxin Lithium Group last year also acquired a 51 per cent interest stake in Sabi Star Lithium Mine in eastern Zimbabwe for 77 million U.S. dollars.

The company, listed on the Shenzhen stock exchange, spent US$76.5 million last September to buy 51% of MaxMind, which held claims.

Sabi Star Mine is expected to produce 1 million tonnes of raw ore and is currently constructing processing infrastructure. The recovery of the lithium will be via the floatation process which will include gravity separation circuits to also recover tantalite. At full operational capacity, the 1 million tonnes of ore will translate to 300 000 tonnes of lithium concentrate and 300 tonnes of tantalite-niobium per year.

The construction of the processing infrastructure will be in the region of US$130 million.

Sabi Star Mine will initially export lithium concentrates to China.

MIRRORPLEX Lithium project

Mirrorplex lithium

Also promising is the Shamva-based MIRRORPLEX (Pvt) Limited’s lithium project which is currently in the exploration phase.

The project which is postured to become Zimbabwe’s biggest hard rock lithium resource has the potential to grow into a world-class lithium mine with results from 240 Rock Chip samples taken from the exposed Bonnyvale pegmatite body at the Shamva Lithium Project providing high-grade lithium assay results up to 3.13% Li2O and surface sampling at the Loch Ness prospect revealing two more pegmatites containing high Li2O grades up to 4.82% Li2O.

Speculatively sitting on over 6 million tonnes of lithium highest grade ore, Mirrorplex is working on Stage two drilling consisting of reverse circulation to confirm mineralisation beneath Lochness North, South Bonny Vale and Hereford East and West as well as testing for extensions of mineralisation.

Zulu Lithium and Tantalum Project

Another leading project is the Premier African Minerals-owned Zulu Lithium and Tantalum Project near Bulawayo.

Zulu Lithium and Tantalum Project is possibly the largest undeveloped lithium-bearing pegmatite in Zimbabwe, located 80 kilometres from Bulawayo.

In early August, Premier received US$18,1 million from Suzhou TA&A Ultra Clean Technology, as part of the marketing and prepayment agreement, which the two parties entered into in June this year.

Under the agreement, clean technology developer Suzhou TA&A agreed to purchase, in advance, spodumene concentrate six (SC6) worth US$34,6 million from Premier to enable the construction and commissioning of a large-scale pilot plant at the Zulu lithium project.

Step Aside Lithium project

Prospect Resources currently owns a potential high-grade lithium deposit located approximately 8km north of the Arcadia Lithium project, the Step Aside Lithium project.

The prospectivity of this area is confirmed by positive historical regional stream and soil sample geochemistry results. The potential is centred on four mineralised pegmatites that are mapped within a meta-dolerite host rock. These LCT mineralised pegmatites run parallel to each other in a north-south orientation and have dip angles of approximately 40-45˚ to the west.

An early-stage exploration program is underway at Step Aside, with rock chip sampling completed and trenching and drilling activities set to commence in Q3 2022. This work is targeted to determine the potential extent by delineating the thickness and strike length of the sub-surface pegmatite.

According to the company’s half-year financial results for the year ended December 31, 2021, an exploration programme is underway.

Kamativi Lithium project

Following an assignment agreement (Deed of Assignment) Galileo Resources entered with BC Ventures and Cordoba Investments Limited in January this year, the resources firm has the option to acquire a 51 per cent interest in BC Ventures by spending US$1,5 million on exploration. BC Ventures own the lithium project and two gold licences near Bulawayo through its wholly-owned Zimbabwe subsidiary, SinamateIa Investments (Private) Limited.

The Kamativi Lithium Project comprises EPO 1782, covering 520 km2, and lies on the Kamativi Belt directly adjacent to, and along strike from the historic Kamitivi tin-tantalum mine which operated from 1936 to 1994. The Kimativi Mine produced 37,000 tonnes of tin and 3,000 tonnes of tantalum ore from pegmatites, and in 2018 Chimata Gold Corp (Zimbabwe Lithium Company) announced a new JORC (2012) compliant Indicated Mineral Resource of 26Mt @ 0.58% Li2O within the Kamativi mine tailings, confirming that the mine contained significant quantities of lithium.

In June 2022, Galileo announced that it has started exploration works at the Kamativi lithium project.

 

Lithium discoveries in Zimbabwe

The Ministry of Mines and Mining Development and the Minerals Marketing Corporation of Zimbabwe list Areas of verified Lithium deposits in Zimbabwe are Goromonzi, Mudzi, Buhera, Bikita, Chegutu, Hwange, Harare, Insiza, Rushinga, Mutoko, Mutare and Hwange. However, Lithium continues to be discovered in various areas across the country. So far the mineral has been discovered in areas such as Mberengwa, Fort Rixon, Bindura, and Kadoma cementing the statement by veteran Geologist Mr Kennedy Mtetwa that “Zimbabwe is hamstrung by lack of exploration”.

Zimbabwe official gold buying prices 29 September 2022

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Zimbabwe official gold buying prices 29 September 2022

Fidelity Gold Refinery (FGR) official gold buying prices Thursday 29 September 2022.

SG 90% AND ABOVE US$50.46/g
SG ABOVE 85% BUT BELOW 90% US$49.66/g
SG ABOVE 80% BUT BELOW 85% US$49.13/g
SG ABOVE 75% BUT BELOW 80% US$48.60/g
SAMPLE BELOW 10g BUT ABOVE 5g US$47.80/g
FIRE ASSAY CASH US$50.46/g

NB: Fire Assay cash price is for gold above 100gs and no sample is deducted.
For FireAssay Transfer price, a sample of not more than 10g is deducted
2% royalty is charged on all deposits (Small-scale Miners)
5% royalty is charged on Primary Producers

Cash available. Fidelity Gold Refinery prices will be changing daily in relation to world market prices.

Illegal Miner murdered at Jumbo Mine

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Illegal Miner murdered at Jumbo Mine

While Mashonaland Central Province Minister of State Senator Monica Mavhunga has been calling for the reopening of Mazowe Gold Mine to reduce issues of illegal mining, gold smuggling and unemployment in Mazowe, last week an illegal miner was killed by a rival gang for the control of the goldfields.

Anerudo Mapuranga

Senator Mavhunga was quoted by this publication saying, the reopening of Mazowe Gold Mine was of importance because many illegal miners were dying while seeking a decent living.

Speaking through its official Twitter handle the Zimbabwe Republic Police (ZRP) said a man named Avon was stabbed to death with an unidentified sharp object on the thigh by members of a rival group while illegally mining gold.

“Police in Mazowe are investigating a case of murder which occurred on 17/09/22 at Jumbo Mine Mazowe. The victim, only identified as Avon, was stabbed to death with an unidentified sharp object on the thigh by members of a rival group while illegally mining gold,” the Police said.

The vast Mazowe gold fields have several mines, with the parent one being Mazowe Mine owned by Metallon Corporation Ltd.

Mazowe Mine comprises Jumbo Mine but is currently under care and maintenance after Metallon Corporation was forced to close its mines in 2018 due to “unsustainable costs of running them without proper compensation for its proceeds from the government of Zimbabwe.”

The mine has 247 claims covering 2 939 hectares.

Zimbabwe’s mining sector, especially the extraction of gold, has lately been characterised by illicit leakages of gold and it is believed the establishment of gold centres could help restrict obscure movement of the yellow metal. The gold sector carries a huge potential for the Zimbabwean economy with small-scale miners producing about 60 per cent of gold receipts which has necessitated consistent efforts to support their production.

The impact of tax incentives requires parliament scrutiny, Chidakwa

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The impact of tax incentives requires parliament scrutiny, Chidakwa

The Parliament of Zimbabwe needs to monitor and evaluate the impact of tax incentives as these hidden public expenditures deserve equal Parliamentary and public scrutiny as much as direct budget allocations, Chairperson of the Zimbabwean Caucus of the African Parliamentary Network on Illicit Financial Flows and Taxation Hon James Chidakwa said.

Sophia Takuva

Many mining companies in Zimbabwe like Great Dyke Investment, and Prospect Lithium Zimbabwe, among others, are listed under special economic zones (SEZ) where tax incentives schemes are included. The mining community has been raising red flags that tax incentives given to some mining firms will bleed the country of its much-needed foreign currency.

Speaking at the Zimbabwe Environmental Law Association (ZELA)‘s Champion MPs Capacity Building Programme with Zimbabwe Parliament Caucus on IFFs and Taxation Chidakwa said the country was confronted with a discourse of growing public demand for basic services such as health, education, water, power, food to mention a few. Therefore, optimizing public revenue, efficient and effective allocation and public spending is a necessity.

“How are we monitoring and evaluating the impact of tax incentives and are we doing a cost-benefit analysis? These hidden public expenditures deserve equal Parliamentary and public scrutiny as much as direct budget allocations. Apart from overly generous tax incentives, what are we doing to curb base erosion and profit shifting, aggressive tax planning by corporates and the wealthy to avoid paying a fair share of taxes in Zimbabwe despite generating substantial income from our economy? With festering informality, criminality, and corruption, how are we priming our role as Parliament to crank pressure on the executive to deliver on optimal tax revenue mobilization? While we focus on domestic initiatives to curb illicit financial flows, we must not lose sight of the big picture, the inequitable and sustainable global financial architecture that benefits developed countries as the primary destination for IFFs from Africa,” Hon Chidakwa said.

Chidakwa said, “Shifting focus from tax to debt. Do we need debt to finance public expenditure? Developed countries massively rely on debt to fund public expenditure, USA and Japan, are classic examples. Zimbabwe is facing a debt sustainability crisis. Debt servicing obligations, if honoured, will significantly thin much-needed investment in health and education.  Think about it, allegedly US$70 million facilitation fees for the loan for Plumtree to Forbes border post highway, the Chinese loan from collateralization of platinum resources. The linkage between debt and IFFs is fundamental in that toxic and hidden debts, their repayment, exorbitant borrowing costs, and the principal, are a tax burden on future generations, thereby posing a huge threat to intergenerational equity, an important constitutional principle of public financial management. Transparency, public participation, and accountability, just like tax revenue, should underpin debt governance in Zimbabwe,” he concluded.

Zimbabwe official gold buying prices 28 September 2022

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Zimbabwe official gold buying prices 28 September 2022

Fidelity Gold Refinery (FGR) official gold buying prices Wednesday 28 September 2022.

SG 90% AND ABOVE US$49.91/g
SG ABOVE 85% BUT BELOW 90% US$49.12/g
SG ABOVE 80% BUT BELOW 85% US$48.60/g
SG ABOVE 75% BUT BELOW 80% US$48.07/g
SAMPLE BELOW 10g BUT ABOVE 5g US$47.28/g
FIRE ASSAY CASH US$49.91/g

NB: Fire Assay cash price is for gold above 100gs and no sample is deducted.
For FireAssay Transfer price, a sample of not more than 10g is deducted
2% royalty is charged on all deposits (Small-scale Miners)
5% royalty is charged on Primary Producers

Cash available. Fidelity Gold Refinery prices will be changing daily in relation to world market prices.

Weaknesses in gemstones policy results in illicit trade practices

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Weaknesses in gemstones policy results in illicit trade practices

The weaknesses in laws, policies and institutional frameworks governing the gemstone sector in Zimbabwe, have resulted in illicit trade practices, Zimbabwe Environmental Law Society (ZELA) Programs Assistant Fadzai Midzi said.

Rudairo Mapuranga

According to Midzi Speaking at ZELA’s Champion Member of Parliament (MPs) capacity-building program with the Parliamentary caucus on Illicit Financial Flows (IFFs), the gemstone sector in Zimbabwe has no adequate legal instruments regulating it thereby contributing to massive illicit financial flows.

“While the Mines and Minerals Act mention precious stones, it is conspicuously silent on semi-precious stones.

“The Precious Stones Trade Act only regulates two precious stones, namely diamonds and emeralds and when read together with the Mines and Minerals Act, it implies that the latter Act’s definition of precious stones includes only diamonds and emeralds.

“However, the Precious Stones Trade Act leaves room for the Minister to include via a statutory instrument to expand the category of precious stones and perhaps semi-precious stones. The greatest worry in all this is that both Acts leave two precious stones and thirty-three plus semi-precious stones unregulated throughout their value chains.

“Weaknesses in policy, legislative and institutional frameworks governing the gemstone sector in Zimbabwe, have resulted in illicit trade practices.

“For all gemstones, the formal footprint on the value chain is very narrow (several stages are missing) resulting in offshoring of value – loss of foreign currency earnings, tax revenue, jobs and industrial linkages due to lack of local beneficiation and value addition,” Midzi said

Midzi said Artisanal and Small-scale Miners are being exploited by illegal gemstone traders who are not paying the real value of gemstones. She said pricing and valuation of the country’s gems is a very big challenge. Semi-precious and gemstones do not have a defined value as it’s based on a willing buyer willing seller.

“The sector is characterised by the existence of syndicates which include foreign buyers based in towns, local dealers who do the running for the foreign dealers, compromised security details (including the police and the military) at extraction sites, grossly exploited artisanal miners and transporters of gemstones who use informal and formal routes including airports and borders.

“In July 2020, the Ministry of Mines and Mining Development produced a draft policy on gemstones in Zimbabwe whose scope supposedly covers the whole value chain and all the other gemstones besides diamonds, which are covered by the Diamond Policy (Ministry of Mines and Mining Development, 2020).

“Most of these other gemstones have been exploited since the 1960s by small-scale miners except the Sandawana Mine which produces emeralds. Occurrences of gemstones are dotted all over the country.

“The fact that there are no large mines or MNEs mining gemstones in Zimbabwe apart from the diamonds eliminates the massive risk of abusive transfer pricing.

“The price we see on the internet do not represent the present transaction as they are just indicative of the previous sale. The pricing of our stones is also based on supply, demand and quality as compared to other countries.

“The only organization doing price valuation is MMCZ located in Harare while producers are all over the country, also they do not issue valuation certificates making it difficult to conclude a trading agreement,” she said.

Midzi said the government and other stakeholders have been neglecting the trade of semi-precious stones. She said formalization and regularization together with the recognition of gemstones mining and trading might not be enough to prevent illicit financial flows.

“The gemstone industries apart from diamonds and emeralds, generally, have been neglected by the government and other stakeholders like civil society.

“A draft legal framework to guide the mining and trade of semi-precious stones was formulated in 2019. In addition, the gemstone policy is in the pipeline.

“Generally, the four objectives mentioned by the Draft Gemstone Policy are all around formalization of the ASSM sector, which is expected to increase accountability in the sector.

“Questions arise around this. Is formalization of the ASSM sector alone enough a safeguard against illicit financial flows in the sector? Does that cover the whole value chain and plug loopholes and vulnerabilities in the whole chain? Should the policy not specifically speak to trade and trading systems, and the movement of people in and outside the country?

“On the trading side, the Precious Stones Trading Act (PSTA) defines precious stones as “… rough or uncut diamonds, or rough or uncut emeralds or any other substance which is, in terms of subsection (2), declared to be precious stones for the purposes of this Act.

“While it is a glaring gap that only diamonds and emeralds are mentioned by the PSTA, there is room for the Minister of Mines “…by notice in a statutory instrument, declare any substance to be precious stones for the purposes of this Act.”

“Unfortunately, the Minister of mines has never issued a Statutory Instrument (SI) to declare semi-precious stones as part of the standard definition of precious stones as required by the PSTA,” Midzi said.

What should be done?

Zimbabwe’s stones are finding their way into the international market outside formal channels. “The informal nature of the coloured-gemstone trade, combined with the inherent difficulty in valuing rough stones at the site of extraction, provides ample opportunity for criminal and corrupt actors to exploit and profit from it. This includes large-scale smuggling of stones, resulting in significant under-reporting of export and trade figures.”

According to Midzi, it is of importance to expedite the formulation and implementation of the gemstone policy. She said, the process must be inclusive and particularly involve local communities where gemstones are extracted and critical stakeholders like artisanal and small-scale mining associations, local government, civil society, buyers, jewellers, and vocational training colleges.

“Expedite the reforms of the Mines and Minerals Act and the Precious Stones Trade Act to foster a conducive environment for formal extraction and trade of gemstone to close legal and institutional gaps that facilitate illicit gemstone trade.

“Local governments must have clear strategies for harnessing the gemstones in their jurisdictions to transform local economic and social development outcomes.

“Political will is needed at local, national, regional, continental, and global levels to tackle the scourge of illicit trade of gemstones that are undermining efforts to achieve sustainable development in Zimbabwe.

“Incentives are needed to promote the fusion of skills for stone sculpturing that Zimbabwe is globally renowned for and jewellery making that is offshored along with value creation.

“Awareness raising of illicit gemstone trade is vital, and communities must be mobilised through the alternative mining indabas to engage with key stakeholders on leveraging gemstones for the promotion of local economic and social development,”

Youth urged to establish environment initiative groups

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Youth urged to establish environment initiative groups

The Environmental Management Agency (EMA) has urged the youth to form their own environmental initiative group to help fight against environmental degradation caused by mining and other activities.

Presenting at this year’s Zimbabwe Alternative Mining Indaba (ZAMI) in Bulawayo EMA said it was of importance for the youth and children to be actively involved in preserving the future of the environment since they are the future.

The organisation said mining should follow environmental management strategies when doing their Environmental Impact Assessment (EIA) reports therefore the youth should also make sure that mining companies adhere to the environmental laws of the country.

It said the youth should ensure safety of the environment by creating environmental rehabilitation groups as well as ensuring that mining companies have an environmental rehabilitation plan.

“Mining companies should follow environmental management strategies in their EIA report. Waste (solid and effluent) and emissions suppression measures should always be in place. Rehabilitation of degraded areas should be done soon after the area is no longer being used. The youths must start their own environmental initiatives e.g. clean up groups, environmental youth networks, build a large social and environmental organisation,” EMA said.

Environmental laws

Section 73 of the constitution of Zimbabwe entrenches the environmental rights:

(1) every person has a right –

(a) to an environment that is not harmful to their health or wellbeing

(b) to have the environment protected for the benefit of present and future generations through reasonable legislative and other measures that –

(i) prevent pollution and ecological degradation

(ii) promote conservation

(iii)secure ecologically sustainable development and use of natural resources while promoting economic and social development

(2) the state must take measures to achieve the realization of the rights of this section

  1. THIS IS ALSO FURTHER EXPLAINED IN ENVIRONMENTAL MANAGEMENT ACT Cap 20.27, section 4 (1).

Environmental rights apply to and protect everyone including children.

Section 81 of the constitution, elaborates on the rights of children to non-discrimination, equal protection of the law, right to be heard, right to protection from economic exploitation, right to education, right to health services among others.

The duty to provide for and facilitate the right to an environment that is not harmful to the health or well-being of every person rests upon the state.

Also, non-state actors have a duty towards the implementation and fulfilment of these rights.

All non-state actors and all levels of government at the national, provincial and local levels have a constitutional duty to uphold and fulfil the environmental rights of children.

The environmental management act chapter 20.27 is the primary legislative instrument that provides for environmental management and governance.

The EM act Cap 20.27, provides general basic norms that may be used to introduce environmental legislation or to amend or maintain existing legislation

The EM act Cap 20.27, reflects what is in the constitution section 73, particularly, section 4 (1) of the act enshrines the right to a clean environment that is not harmful to health and the right to protection of the environment for the benefit of present and future generations.

It also provides for every citizen’s right to participate in the implementation of reasonable legislative policy and other measures to prevent pollution and environmental degradation.

Section 4 of the EM act, provides for the rights and principles of environmental management. E.g. Environmental management must place people and their needs at the forefront.

Section 4(1)(b) of the environmental management act provides that every person has a right to access environmental information.

Section 4(2)(d) provides that environmental education, environmental awareness and the sharing of knowledge must be promoted so as to increase the capacity of communities including children.

Youth Environmental participation

Environmental management agency has programs that involve the youth both in schools and out of schools. These include environmental clubs in schools, environmental debates and environmental competitions.

Environmental management agency has adopted the ‘catch them young initiative’, where all children are taken on board in environmental issues.

Children/ the youths are taking part in environmental programs such as clean-up campaigns and clean schools completions.

The youths and children in schools are also taking part in environmental projects such as nursery projects, waste management projects, plantations and orchard projects.

Corruption, tax evasions and incentives, major causes to illicit financial flows 

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Corruption, tax evasions and incentives, major causes to illicit financial flows 

Criminal activities, corruption as well as tax evasion and tax incentives given to multinational corporations are the major causes of illicit financial flows (IFFs) in Africa.

Rudairo Mapuranga

Speaking at the Zimbabwe Environmental Law Association (ZELA)’s Champion Member of Parliament (MPs) capacity-building program with the Parliamentary caucus on Illicit Financial Flows (IFFs) and taxation Kenyan Finance researcher Everlyn Muendo said Multinational Corporations in Africa work flat out to make sure that they reduce tax liabilities by evading taxes through legal and illegal means bleeding African countries of the much needed foreign currency.

According to Muendo multi-national Corporations, especially those in the extractive industry are bleeding African countries of their taxes and revenues through different schemes like using lawyers to create tax evasion companies like Trusts, Private Voluntary Organizations (PVOs) among others as well as coming to invest indirectly through tax Haven countries like Mauritius.

“There are ways multinational Corporations are reaping off African countries that do not seem to be illegal but a form of illicit financial flows. The companies use lawyers to create companies that do not pay tax, and instead of coming directly to Zimbabwe or Africa, they come through Mauritius,” she said.

She said that the way Zimbabwe’s tax system in the mining industry is porous and a danger to the growth and development of the economy. She said the process and principle of double taxation creates a winner and loser with African countries losing at the hands of multi-national corporations.

“Double taxation agreements in reality are subject to massive tax abuse. African countries in the name of competing for Foreign Direct Investment (FDI) end up losing tax revenue. Many African governments including Zimbabwe are providing tax incentives in an effort to attract investment, therefore, ending up giving developed countries their resources for free in the name of attracting investment,” Muendo said.

She said African governments although they justify tax holidays by saying they provide FDI, the truth of the matter is that the holidays are based on politics more than on economics.

“Our tax system are favourable to the multinational corporation. Parliament urged to exercise a well-researched and informed oversight role to ensure that Africa does not lose from ‘legal illicit financial flows ‘ there should be due procedures that should be to countries coming in to extract natural resources.

“The people who set the global rules or double taxation are developed countries at the same time the same ones causing illicit financial flows.

“Africa should be the one dictating on tax laws than taking the laws from developed countries,” she said.

According to Chikomba Member of Parliament Hon Tatenda Mavetera in response to Muendo’s presentation, for the Parliament to help the government in coming with tax holidays, there is need to push for a clear legislative framework that benefits the country.

“As legislators, we need to assist our government so that they benefit from investments. We need proper legislation when it comes to tax holidays. There was revenue for Zimplats, initially, it was 15 per cent, then it was totally removed, and now it was introduced as 5 per cent. We need to take the bull by the balls,” Hon Matevera Tatenda said.

According to ZELA ‘s Tafara Chiremba, the parliament should take guard, to ensure that every deal is beneficial to our country.

“There is a need to ask important questions before treaties are signed. Parliament usually comes at the end of the agreement, that’s a real problem, parliament should come from the beginning. Parliament should not be just notified but be involved. Capital exporters will push for more benefits to the detriment of our countries,” Tafara said.

ASM operations a cause for concern in illicit financial flows

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ASM operations a cause for concern in illicit financial flows

Due to its informal and semi-formal operations, the Artisanal and Small-scale Mining (ASM) sector is a hub breeding illicit financial flows in Zimbabwe.

Rudairo Mapuranga

Speaking at Zimbabwe Environmental Law Association (ZELA)‘s Champion Member of Parliament (MPs) capacity-building program with the Parliamentary caucus on Illicit Financial Flows (IFFs), ZELA PROGRAMS OFFICER Joyce Machiri, said what the nation is producing is not a true reflection of the gold that is delivered to the country’s sole gold buyer and exporter, Fidelity Gold Refinery (FGR). She said, most ASM are being financed informally leading them to channel their gold to informal markets.

Machiri said, the legal framework governing ASM needs to be improved and the realities of gold mining taken into account in order to increase the chances of compliance by gold miners.

She said, there was a need to improve the data available on the ASM sector to ensure that formalization measures reflect the reality of the sector through more systematic monitoring of key data points, such as where mining takes place, how many people are involved, how much is produced and traded, etc., and greater digitalization and integration of monitoring systems, such as cadastral and inspection missions, regular ASM sector monitoring data, and inspections and controls at export points and customs.

“Smuggling in the ASM sector occurs partly due to the fact that artisanal miners, traders, and exporters face difficulties in the form of unnecessarily complicated administrative procedures, high fees, or rigid regulations that cannot meet their needs. Removing these barriers could lead to more supply chain actors operating formally and reduce incentives to smuggle products. Formalization would also make artisanal operators less vulnerable to exploitation, extortion, and onerous informal taxation

“Simplifying licensing and permit procedures and requirements for ASM operators and value chain actors, for example, by reducing the number of permits required.

“Promoting the financial inclusion of artisanal miners to combat their dependence on informal and sometimes abusive pre-financing relationships.

“Establishing an official network of gold buying, marketing, and export offices, particularly in reserved gold mining areas. This should include the establishment of local gold buying offices that pay as close to the world market price as possible and pay artisanal miners in a timely manner.

“Accelerating the formalization of the sector and the value chains of ASM and making gold mining a legitimate part of the economy alongside LSM would allow the sector to become a driver for peace and stability. This requires a shift in perspective, where state regulation of the sector aims to govern ASM through positive incentives.

“Formalization of the sector could also help marginalized and remote communities to take advantage of the economic, income, and livelihood opportunities gold mining presents, thereby mitigating grievances against the state,” Machiri said.

Zimbabwe official gold buying prices 27 September 2022

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Zimbabwe official gold buying prices 27 September 2022

Fidelity Gold Refinery (FGR) official gold buying prices Tuesday 27 September 2022.

SG 90% AND ABOVE US$50.19/g
SG ABOVE 85% BUT BELOW 90% US$49.40/g
SG ABOVE 80% BUT BELOW 85% US$48.87/g
SG ABOVE 75% BUT BELOW 80% US$48.34/g
SAMPLE BELOW 10g BUT ABOVE 5g US$47.55/g
FIRE ASSAY CASH US$50.19/g

NB: Fire Assay cash price is for gold above 100gs and no sample is deducted.
For FireAssay Transfer price, a sample of not more than 10g is deducted
2% royalty is charged on all deposits (Small-scale Miners)
5% royalty is charged on Primary Producers

Cash available. Fidelity Gold Refinery prices will be changing daily in relation to world market prices.

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