ZICOSTEEL board chair Martin Manuhwa says Kuvimba Mining House’s undertaking to revive Ziscosteel is the best deal the former steel-making company has had.
Kuvimba, linked to tycoon Kuda Tagwirei, is set to inject about US$1 billion towards the resuscitation of Ziscosteel over a three year period.
The former integrated steelworks giant closed shop nearly two decades as a result of poor administration and corrupttion.
“We are happy that the Kuvimba deal in general is not taking any equity and it has a sunset clause that comes after three and a half years when the contract would have lapsed,” Manuhwa said.
“After their exit, the whole strategy is to make sure that Zisco’s balance sheet is strong enough for us to rebuild our steel plant and go back to our glory days.”
Ziscosteel board chairman Martin Manuhwa
Manuhwa said the deal was going to leave them in a position to negotiate with investors from a strong position as compared to their historical, desperate hunt for investors.
“This is also good for us to be strong enough to attract other investors as a very strong entity, if we had done that at this very moment it was not going to be a win-win situation because the investor would have brought everything and once one brings everything they can also take everything,” he said.
Diamond production is expected to rise 19% this year to 5m carats from 4,2m achieved last year due to the opening up of the world economies following the slowing down of the Covid-19 pandemic.
The improvement in production is also premised on the back of various expansion projects that diamond mining companies are undertaking.
The Chamber of Mines of Zimbabwe CEO, Isaac Kwesu (pictured), told Business Times that all diamond mining houses are expected to ramp up production this year following the expected completion of various projects which will improve the companies’ capacity.
“We are expecting diamond output at around 5m carats in 2022 from 4,2m carats in 2021 with various projects expected to boost diamond output in the outlook,” Kwesu said.
Last year, out of the 4,2m carats, the country’s largest diamond miner Zimbabwe Consolidated Diamond Company (ZCDC) contributed 3,78m carats.
Murowa, an associate of RioZim, which contributed about 10% of the total output, associated its reduced output in 2021 with low-grade ores.
ZCDC commissioned a 450 tonnes per hour metallurgical processing plant.
The mining company is expanding operations from alluvial operations to conglomerate ore processing.
Murowa Diamonds expansion project is almost complete and is expected to be commissioned this quarter.
Murowa processing capacity will grow to 500 000 tonnes per month from 190 000 tonnes per month.
ZCDC/ALROSA joint venture agreement has begun the exploration and establishment of a diamond washing plant with a capacity of 1 tonne per hour of ore.
Anjin diamond has reopened its diamond mine and is expected to produce up to 12m carats by 2025.
ZCDC resumed its monthly auction in April, ending an eight-month hiatus caused by Covid-19, after a record year of production in 2021.
These auctions are held monthly.
The company projects a further increase in output this year.
“For 2022, we are set to not only achieve, but exceed our diamond production target by more than 40% when compared to the 2021 baseline target,” ZCDC chief executive officer, Mark Mabhudhu said.
He said the Russia-Ukraine conflict has “far-reaching consequences” for many businesses.
Russia’s Alrosa, the world’s biggest producer which is currently prospecting for diamonds in Zimbabwe, is one of the Russian companies placed under Western sanctions over the Ukraine conflict.
This may push for an increased demand for ZCDC’s own stones.
The country’s diamonds have faced restrictions in the USA, which is the key gem market.
In 2019, the US held a shipment of Zimbabwean diamonds claiming they had been produced through forced labour.
Furthermore, Tiffany & Co, the leading American luxury jeweller, also stopped stocking Zimbabwean diamonds over human rights concerns.
Buyers for this month’s sale are drawn from various areas such as Dubai, Israel, India and South Africa.
According to experts, the resumption of the auction sales is expected to provide a litmus test on the viability of the country’s diamond value chain.
But Mabhudhu said the diamond mining industry has its fair share in terms of growth such that its sustainability hinges on the ability of the auction to generate lucrative earnings from the potential buyers across the globe.
The Government is impressed with the rate of compliance by companies mining black granite in Mutoko, Mashonaland East province to undertake Environmental Impact Assessment (EIA) processes.
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The EIA is a legal requirement in Zimbabwe in terms of the Environmental Management Act as read with Statutory Instrument 7 of 2007.
It is a tool used to define, quantify and evaluate the potential and known impacts of human activities on ecosystems at the earliest stage of project development.
In Zimbabwe, projects that require EIAs include mining, quarrying and housing developments.
Environmental Management Agency (EMA) Mashonaland East education and publicity officer Astus Mabwe told New Ziana that the regular inspections that they made at the mining sites in the district were spurring the compliance.
At least 10 companies extract the black granite in Mutoko, namely Natural Stone, CRG, Zimbabwe International Quarry, Ilford Red and Enterprises.
“Granite mining companies in Mutoko have been forthcoming in terms of compliance with the EMA Act. All of the companies operating in the district now have EIA certificates and all relevant licenses that are issued by the agency in terms of the Act. As EMA, we continue to do monitoring inspection to check on any deviations from license conditions,” Mabwe said.
It is estimated that 150 000 tonnes of black granite are produced annually in Zimbabwe, with Mutoko contributing 75 percent of that output, which is exported to countries such as China, the United States of America, the United Kingdom, South Africa and Germany.
Concerns have, however, been raised at the failure by players in the industry to add value to the stone before exporting it, for the country to earn increased revenue.
Meanwhile, Mabwe said the agency was concerned by artisanal miners who had become a menace in some parts of the province, particularly in Mudzi, Uzumba-Maramba-Pfungwe and Goromonzi districts.
“That remains a challenge and we routinely monitor their activities closely as they negatively contribute to environmental degradation. Some scavenge for gold as syndicates while some do it individually. They play hide and seek games with us but we continue to engage them together with our stakeholders such as the police and traditional leaders,” he said.
The government plans to register all artisanal miners in the country as part of efforts to formalize their operations, curb illegal gold dealing as well as protect the environment.
RioZim, which had been banking on Chinese financing to build a major coal-fired power plant, says it is now looking for alternative backers as China pulls back on funding such projects overseas.
The effort by RioZim, one of Zimbabwe’s biggest mining and energy companies, reflects how China’s recent U-turn on foreign coal financing is forcing developing nations across Africa and Asia to rethink their energy plans. China, which had been a top funder of coal power projects around the globe, announced in September it would not build new coal projects abroad as part of efforts to curb future carbon emissions.
Plans for the multi-billion dollar Sengwa power plant in northwest Zimbabwe involve more than doubling the country’s current electricity capacity.
RioZim’s energy division, Rio Energy, had been hoping for funding for the planned plant and associated coal mine from Chinese banks Industrial and Commercial Bank of China (ICBC) and China Minsheng Banking Corporation Ltd.
Now, Rio Energy is considering alternative financing plans. “We are still in the market to fund the project and we will work with all possible funders, including the Chinese,” parent RioZim says.
The company said another option under consideration is to transform the project to a gas-powered plant, but that idea is “subject to the outcome of feasibility studies” and no time frame for those has been set.
RioZim told Reuters that ICBC and Minsheng Bank “came in to play a supporting role” but that it can’t comment on the status of their involvement because it doesn’t have a direct relationship with the companies. Chinese bank financing for coal power plants overseas has often been arranged to support Chinese construction companies, which then enter into building contracts with the company planning the power plant.
Smoke rises from chimneys at Hwange Power station in Hwange, Zimbabwe (REUTERS/Philimon Bulawayo)
ICBC told representatives of environmental non-governmental organisations in a June 2021 meeting that the bank would no longer finance the Sengwa project, according to two people who attended the meeting.
Plans for another large coal power project in Zimbabwe, known as Lusulu, are also up in the air, according to PER Lusulu Power, the Harare-based energy company behind the plant which had been planning on Chinese backing.
A Zimbabwe government spokesperson declined to comment on the status of either project. He said Zimbabwe has the right to exploit its coal resources if needed and would not "sacrifice growth prospects on the altar of arguments to do with the environment."
China’s foreign ministry didn’t respond to questions about the status of the funding of the Sengwa and Lusulu projects. But it said Beijing will support developing countries in shifting to greener energy.
The foreign ministry added that China, which has close economic and diplomatic ties with Harare, “will increase its support to Zimbabwe’s development of renewable energy power projects, and help Zimbabwe’s sustainable development.”
HANGING IN THE BALANCE
Globally, some US$63 billion of Chinese state financing across 57 projects could be at risk from China’s withdrawal from coal financing overseas, according to Global Energy Monitor. The pullback could cut Africa’s pipeline of coal power projects by two thirds to 3.6 gigawatts (GW), estimates think tank E3G.
In Zimbabwe, less than half the population has access to electricity. The country has been betting on coal-fired power to address chronic electricity shortages and create jobs.
RioZim has talked about building the Sengwa plant for more than a decade. Plans include adding 2.8 gigawatts (GW) to the grid and restarting the adjacent coal mine, which has been closed since 2014. Currently, Zimbabwe has the capacity to generate around 2.3 GW, which comes mostly from a large hydroelectric power plant but also four coal-fired power stations.
A villager shows discoloured crops n Madhumabisa suburb in Hwange, Zimbabwe, October 18, 2021. Picture taken October 18, 2021. REUTERS/Philimon Bulawayo
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The planned Sengwa plant, near the town of Gokwe, would create 1,100 permanent jobs and nearly four times as many temporary construction jobs, according to Rio Energy. Sedeya Jetro, head of a local primary school, said the jobs would enable parents to pay school fees and “mean a lot to this community.”
Rio Energy told Reuters that ICBC had in 2019 provided an expression of interest – or non-binding commitment – to a Chinese construction company to fund the first phase of the Sengwa project. Neither the construction company, PowerChina International Engineering Co., nor its parent, Power Construction Corporation of China, responded to requests for comment.
Minsheng Bank also provided a non-binding commitment to RioZim to fund a second phase of the Sengwa project, according to Rio Energy and an August 2020 letter of interest from Minsheng Bank that Reuters reviewed. The pledge expired in February 2021, according to the letter.
A Minsheng Bank official who signed the document said in an emailed response to Reuters that the letter of interest was "a trade secret" and didn't respond to questions about funding plans. Spokespeople for Minsheng Bank and ICBC didn't respond to requests for comment.
Rio Energy was hoping for US$3.4 billion of funding for the second phase of the power plant, according to a draft contract with a unit of engineering and construction company China Gezhouba Group Corporation (CGGC). The contract, which was reviewed by Reuters, was dated November 2020 and drafted by both companies.
In response to questions about the planned Sengwa plant, CGGC’s parent company China Energy Engineering Corporation told Reuters that a subsidiary signed a construction cooperation agreement in 2020. “There is no progress on this project currently,” it said, citing a lack of financing commitments.
PER Lusulu Power plans to build the 2.1 GW Lusulu plant in Zimbabwe’s western province of Matabeleland North. It announced in 2015 that Chinese financial institutions had agreed to fund its construction, subject to conditions. PER Lusulu Power’s website says the company entered into a construction contract with China State Construction Engineering Corporation, which would secure debt finance from Bank of China.
PER Lusulu Power had also sought financing of up to $2 billion for the project from ICBC, according to extracts of a term sheet dated August 2020 viewed by Reuters. The term sheet is a non-binding agreement setting out the terms and conditions for an investment. It was unsigned, and was prepared by ICBC, according to a person familiar with the document.
Bank of China said in a statement that it doesn’t have any electricity projects in Zimbabwe and has no plans to develop any. ICBC and China State Construction Engineering did not respond to questions about the Lusulu project.
Zanzele Moyo sits outside her house in Madhumabisa suburb in Hwange, Zimbabwe, October 18, 2021. Picture taken October 18, 2021 REUTERS/Philimon Bulawayo
ECONOMIC DEVELOPMENT
One Chinese-funded project that is progressing is in the northwestern town of Hwange, where construction was already well underway when China announced its coal-funding freeze. The project involves the expansion of an existing coal-power plant and has been financed by a loan of roughly US$1 billion from Export-Import Bank of China, the Zimbabwe government has said. Zimbabwe Power Company, which manages the plant, said in a November statement that the expansion “continues to progress well” and was more than two thirds complete. China’s EximBank didn’t respond to a request for comment.
The project is expected to increase employment by nearly doubling the current 2,853-strong workforce, while also sustaining the town’s coal-mining industry, which employs thousands more people. The Zimbabwean government spokesperson said the country will be much better placed to meet electricity demand once the expansion – which is due to add 600 megawatts – is complete.
Renewable power advocates in Africa and elsewhere say China’s pullback from coal power provides an opportunity to clean up. Zimbabwe is expanding its plans for generating renewable energy, such as solar power, but such projects can require fewer permanent employees than coal, making them less attractive for governments keen to generate employment.
Sydney Gata, executive chairman of the Zimbabwe Electricity Supply Authority, said that an instant switch to solar and wind isn’t feasible given the scale of the country’s power needs.
“Renewables are not an immediate plan B for Zimbabwe,” he said.
Zimbabwe’s mining industry sees a funding shortfall of US$10 billion over the next five years, a challenge compounded by erratic power supplies and exchange-rate volatility.
While Zimbabwe has the world’s third-biggest reserves of platinum-group metals, plus gold, diamond and chrome mines, development has been stymied by economic instability, which affected foreign direct investment.
While mining is projected to generate earnings of US$5,5 billion this year, it faces a number of headwinds, the country’s Chamber of Mines of Zimbabwe said in its latest commodity outlook report.
The Government of Zimbabwe is targeting to grow the country’s mining sector to a US$12 billion industry by 2023, a significant milestone towards the country’s Vision of upper middle income status by 2030.
Mining, currently riding high amid a surge in global prices, is expected to anchor short to medium term growth for the mineral rich Southern African country, which has more than 40 mineral occurrences.
Last year, Zimbabwe announced rules forcing exporters to transfer 40 percent of their foreign currency earnings to the central bank, instead of 30 percent. That’s exchanged into local currency at little more than half the parallel market rate.
Those foreign-exchange losses pose a risk to the mining industry, said the chamber, a lobby group that represents companies including Impala Platinum Holdings Ltd. and Anglo American Platinum Ltd.
“Key risks to the Zimbabwe mining sector outlook include inadequate foreign exchange allocations to fund operational requirements and expansion projects,” the chamber said.
While the outlook for steel makers remains cloudy, the weakening of the US dollar is propping up global commodity prices including metals as well as crude oil.
When the dollar weakens, the same amount of any commodity costs more in terms of dollars. Therefore, prices increase. And, the stocks of metal companies are mirroring that optimism. — Bloomberg.
Last month, 13 copper-industry representatives at the London Metal Exchange were asked whether Russian metal should be blocked from its warehouses. Ten of them said “yes.” But when advisory groups for nickel and aluminum discussed the same question, the general consensus was “no.”
The LME, which is the ultimate decision-maker, says it won’t take action that goes beyond government sanctions — which, so far, have left most of the metals industry untouched.
But the behind-closed-doors discussions reflect a wider angst over whether to keep buying from Russia, as the industry weighs the stigma from the war against its own commercial interests — and the fact that vital metals like aluminum and copper were in short supply even before the invasion of Ukraine.
For now, Russian metal is largely still flowing to the world’s factories and building sites. Many traders and fabricators who buy from Russian companies are tied in to pre-existing purchase deals that can extend over years. And commodities merchants have a well-earned reputation as buyers and financiers of last resort when others have long backed away.
Still, a growing number in the industry say they won’t take on new Russian business, and some are actively working to disentangle themselves. That’s making it ever-harder for Russia’s metals producers to sell whatever output is not already contracted, and may ultimately force them to cut production if there’s no change by the time long-term deals come to an end.
For the LME, the risk is that material mined in Russia starts piling up in its warehouses because it has nowhere else to go, creating dangerous dislocations at the nexus of the global metals trade.
“We see from our customer base there is hardly any interest to buy Russian metal if they can avoid it — and they can,” said Roland Harings, chief executive officer of copper giant Aurubis AG, which is represented on the LME copper committee. If the metal flows to the LME instead, “then you have this phantom stock which has an influence on the market because it shows high stock levels but nobody wants it.”
The question of what happens to Russia’s metal exports is of vast consequence to global markets — it’s a key supplier of palladium, nickel, aluminum, steel and copper. Prices for all of those metals set new all-time highs in March, although steel is the only one to be the direct target of sanctions so far.
Aurubis, Europe’s largest copper smelter, is “trying to get out” of its contracts for Russian supplies, and is in favor of sanctions against metals, Harings said in an interview last week. “I believe in the end whatever money we pay will end up in the wrong pockets,” he said.
Norwegian aluminum company Norsk Hydro ASA said it was taking the minimum possible under its contracts with Russian companies and was aiming to reduce that further.
There are still buyers for now — even in Europe. Russian metals producers like MMC Norilsk Nickel PJSC and United Co. Rusal International PJSC tend to sell on annual or multi-annual deals to big industrial groups, and for the most part these contracts are still being fulfilled, according to people familiar with the matter.
Traders like Glencore Plc, which has a deal to buy aluminum from Rusal until at least 2024, and Trafigura Group, which has a long-standing relationship with Nornickel, are also fulfilling contracts in Russia.
Still, there are big challenges. Most container shipping lines have stopped calling at Russian ports. Precious metals like gold and palladium are typically sent to Switzerland or London by plane — but most flights out of Russia are now grounded.
And few new deals are happening. Glencore, which has been one of the largest traders of Russian commodities since the days when founder Marc Rich struck agreements with the Soviet Union, announced last week it would do no new business in Russia.
Traders say it’s nearly impossible to find banks willing to finance new purchases of Russian metals, even in China, the world’s biggest metals consumer.
That’s where the debate over the LME comes in.
Producers generally prefer to sell their metal to end users, but delivering onto the exchange is also an option. Buyers on the LME don’t know whose metal they will receive until the contracts expire.
Those arguing for a ban on Russian metal say there’s a risk that the country’s producers could dump large volumes of metal into LME warehouses to raise cash quickly. If it became clear that LME stocks were dominated by Russian metal that no one wants, the exchange’s contracts could be priced differently from the rest of the global market.
Already, Trafigura has been delivering Russian copper to LME warehouses in Asia in recent days after failing to sell it in China, Bloomberg reported.
The two copper committee members who voted against a ban — representatives of China’s Minmetals and IXM, a trading house owned by China Molybdenum Co. — argued that it wasn’t the LME’s place to impose sanctions, and that doing so would disrupt an already febrile market. A third, from French cable maker Nexans SA, abstained, according to people familiar with the matter.
The LME committees only have an advisory role. But the exchange is also wrestling with the issue: Chief Executive Matthew Chamberlain told Bloomberg TV the LME wanted to make sure it “can’t be part of financing any type of atrocity,” and was in talks with governments.
The LME has said it will not impose restrictions on Russian metal that go beyond government sanctions. Still, any move by the U.S., U.K. or EU to target Russian metal flows would probably lead the exchange to block new deliveries.
On Friday, the LME made the largely symbolic decision to ban deliveries of newly exported Russian aluminum, copper and lead from its warehouses in the U.K., in response to a new import duty imposed by the U.K. government.
“The western world is going to have to work out ways of using less Russian metal,” said Duncan Hobbs, research director at metals trader Concord Resources Ltd. “We will see some redistribution of trade flows as a result of what has happened, even if the fighting stops tomorrow.”
Tharisa Plc, the South African miner run by the Pouroulis family, plans to start producing platinum in Zimbabwe within 24 months after acquiring a controlling interest in the Karo mine.
While Zimbabwe has the world’s third-biggest reserves of platinum-group metals, development has been stymied by political instability, economic collapse and previous local-ownership rules. Impala Platinum Holdings Ltd., Anglo American Platinum Ltd. and Sibanye Stillwater Ltd. also have operations in the country.
Infrastructure works for the first $250 million phase of the open-pit mine will start later this year, Tharisa Chief Executive Officer Phoevos Pouroulis said in an interview. The operation, 120 kilometers (75 miles) west of Zimbabwe’s capital Harare, will produce 150,000 ounces of PGMs in its first phase and have a 20-year life.
“We’ve kick-started the development,” Pouroulis said. “There is potential to expand further.”
Tharisa, which also has interests in chrome, paid $27 million for control of Karo on March 31. The first-phase development will also include a pilot smelter.
“We want to do the whole value chain in Zimbabwe,” the CEO said.
The Pouroulis family set up the South African platinum-mining ventures Lefkochrysos and Eland Platinum. Eland was sold to Xstrata Plc in 2007 for the equivalent of $1.1 billion.
From being treated as a pariah in the global diamond industry in the not too distant past,the remarkable work that Zimbabwe has put in to shrug off the undesirable tag is paying off, and will be on show in Victoria Falls when it hosts the African Diamond Producers Association (ADPA) extraordinary council of Ministers meeting from tomorrow to Friday this week.
Zimbabwe is currently the ADPA deputy chair and will assume chairmanship from Tanzania at that meeting.
Concurrently, Zimbabwe is also the deputy chair of the Kimberley Process Certification Scheme (KPCS) and will again this year take over chairmanship of the global diamond watchdog, laudable milestones for a country whose diamond industry has in the past quoted a lot of controversy, albeit for malicious reasons.
Some Western countries opposed to the land reform programme which the Government implemented in 2000 and being bent on isolating the country as punishment, sought to prevent it from selling its newly found gems by accusing it of violating human rights in their extraction and labelling them “blood diamonds”.
The Ministry of Mines and Mining Development touted the Vic Falls meeting and last year’s elevation to ADPA deputy chair as one of the fruits of Zimbabwe’s re-engagement agenda.
“At the 7th Council of Ministers meeting 2021 held virtually, the Republic of Zimbabwe was nominated to be the incoming chair of ADPA after Tanzania. The nomination falls in line with the National Development Strategy 1 on engagement, re-engagement and international relations,” the ministry said ahead of the meeting.
“Zimbabwe as a country has made efforts to continue to engage with the international community through its ADPA membership.”
The pending assumption of chairmanship of ADPA and the KPCS, two crucial organisations in the global diamond industry, is also testament of the remarkable transformation that the Zimbabwe diamond sector has undergone in recent years.
Zimbabwe, which is a founding member of ADPA, is expecting to push through a strong agenda during its tenure as chair, including by formulating strategies to improve the African diamond industry.
“As the incoming ADPA chair in 2023, the Republic of Zimbabwe is expected to carry out the following mandate, among others: ensuring that African diamond producers present a united voice on the international diamond scene on matters which affect them and promoting cooperation and information sharing amongst ADPA member countries,” the ministry said.
Other ADPA members include the Democratic Republic of Congo, Sierra Leone, Namibia, Central African Republic, Botswana, Ghana, Guinea, Togo and Tanzania.
Speaking at a KPCS pre-inspection workshop late last month, Mines and Mining Development permanent secretary Onismo Mazai-Moyo said the recognition by ADPA and the KPCS was a signal that the international community was beginning to accept Zimbabwe as a serious player in the global diamond industry.
“The elevation to take over the vice-chair of the KPCS is really an honour to us and it shows that slowly the international community is beginning to grow confident in Zimbabwe and of course grow confident in the way we handle our diamonds and the way we relate to all stakeholders in the areas that we operate and the markets that we sell,” he said then.
The local diamond industry is expected to contribute US$1 billion to the targeted US$12 billion mining income level by 2023.
Firm growth is expected in the sector this year, as it regains its sparkle following production challenges experienced in the past.
For example, the Zimbabwe Consolidated Diamond Company (ZCDC), the country’s largest diamond miner, has set a production target of over 5 million carats this year, while others including Anjin and Murowa are expanding production capacities to drive growth in the sector.
ZCDC, along with Anjin, Murowa and Alrosa are the four companies licensed to mine diamonds in the country.
However, Alrosa is still at the exploration stage.
Zimbabwe is also currently conducting a self-assessment exercise of the entire local diamond value chain, in preparation for a mandatory KPCS evaluation next month. A Kimberley Process team will be undertaking a review visit to Zimbabwe between May 8 and 13, with the last one having been conducted in 2012. — New Ziana.
Red Rock Resources plc, a UK-listed exploration company, has acquired lithium claims in Zimbabwe and is setting up a lithium exploration unit in the country to hunt for more.
The company, quoted on London’s AIM market for smaller companies, has bought land in Bikita, near where Bikita Minerals has already been mining petalite. Red Rock will establish a new company, African Lithium Resources (ALR), in which it will hold 75%. The other 15% will be held by an unnamed local partner.
Red Rock already owns some battery mineral prospects in the DRC – it is exploring copper and cobalt there – and its CEO Andrew Bell has explained why Zimbabwe is looking attractive for lithium explorers.
“(Zimbabwe’s) pegmatites have a mineral endowment that has considerable expansion potential, and international investors have shown themselves willing to invest in lithium exploration and development in this traditional mining country that has been in disfavour for decades,” Bell said Thursday.
Red Rock said it bought the 51-hectare claim from a local company, Thebe Resources. It is applying for more licences in the Bikita areas as well as in Arcturus, where Prospect Resources has been developing Arcadia Mine.
“The company set up African Lithium Resources after discussion with its local partner and others with a view to seeking further investment and developing a significant presence in lithium, leading potentially to listing,” Red Rock says.
Zimbabwe lithium rush?
Red Rock’s buy is the latest in a series of recent foreign moves into Zimbabwean lithium.
Since November, there have been at least six Zimbabwe lithium transactions, of various sizes.
Last November, China’s Shengxin Lithium paid US$76.5 million for 51% of MaxMind Hong Kong, which holds the Sabi Star lithium-tantalum project in Zimbabwe.
In December, China’s Huayou announced it would pay US$42 million for Arcadia. It was a big win for Prospect Resources, which had spent about US$26 million on exploration and evaluation. That transaction has piqued the interest of other explorers, keen to also ride on rising global demand for lithium.
In March, UK resources investor Galileo Resources said it would spend US$1.5 million to explore for lithium and gold in Zimbabwe after being granted the option to acquire 51% of a local prospecting firm.
Red Rock is also present in the DRC, where it has Luanshimba copper-cobalt project in the Haut-Katanga province. The company has mineral assets in Kenya, Australia, Burkina Faso and Côte d’Ivoire.
VICTORIA Falls Stock Exchange-listed Caledonia Mining Corporation says dividends continue to be a central part of its strategy as the mining firm seeks to grow the business and de-risk it from being a single asset producer.
The company, which is also listed on both the New York and London Stock Exchange declared a quarterly dividend of US$0,14 on each of its shares.
The total dividends paid in 2021 were 50 cents per share, almost 50% higher than in 2020, it said.
“Our dividend continues to be a central part of our strategy as we seek to grow the business and de-risk it from being a single asset producer. We continue to evaluate investment opportunities while balancing returning money to shareholders and investing in the company’s growth,” the company’s chief executive officer Steve Curtis said in a statement.
Caledonia said the payment date for the dividend is April 29, 2022.
Caledonia’s strategy to maximise shareholder value includes a quarterly dividend policy which the board adopted in 2014. The board, according to the statement, will consider future increases in the dividend as appropriate in line with its prudent approach to risk management.
Dividend declaration comes after the company last month reported gross revenues of US$121 million for the year 2021, up 21% compared to the same period in 2020.
Gross profit stood at US$54,1 million while earnings before interest, taxes, depreciation, and amortisation (EBITDA) was at US$46,4 million.
Cash generated from operations before working capital increased by 17% from US$42,4 million to US$49,6 million.
The company is targeting production of 73,000 to 80,000 ounces of gold in 2022.
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The LME, which is the ultimate decision-maker, says it won’t take action that goes beyond government sanctions — which, so far, have left most of the metals industry untouched.
