Mining ZimbabweLatest Mining News, Policy and Industry Updates

Zimbabwe’s mineral commodity producers will enjoy limited benefit from the currently upsurge in international prices as it is nearly impossible to ramp up production in the short term, industry experts have said.

Commodity markets are being squeezed from increased demand as economies recover from the coronavirus pandemic as well as the impact from geopolitical factors that are affecting supplies.

As a result prices for metals and other internationally traded commodities are climbing at the fastest rate since 1995, pointing to a very good year for producers.

Gold extended its rally towards a record high on Tuesday, after investors made a beeline for the traditional safe-haven metal on mounting fears around the Russia-Ukraine crisis.

While the gold price has since retreated below US$2,000 per ounce, it is still trading 15,16 percent higher than its price a year ago. As at mid-morning yesterday, the gold price was up 2,44 percent for the week.

Gold miners are expected to benefit from the rush to safe haven amid the Ukraine crisis.

The benefit is however likekly to be limited to current production levels as the nature of mining does not allow any unplanned ramp up in production levels.

According to Caledonia Mining Corporation CEO Mark Learmonth the miner does not have the flexibility to increase production at short notice in response to a higher gold price.

“Production increases over and above our current mine plan will require years of planning and investment,” Learmonth said in an emailed response to Business Weekly.

Caledonia will however still benefit from the current high gold prices as it has been able to ramp up production within its planned targets.

In January this year, Caledonia announced record annual production of 67,476oz, exceeding revised increased guidance.

This year, Caledonia is guiding for production of 73,000 ounces of gold from its Blanket mine in southern Zimbabwe.

The miner’s strategy is also to focus on becoming a multi-asset gold producer now that the Central Shaft is complete and the Company can focus on other areas of its growth strategy, predominately de-risking the business from being a single asset producer.

As a country Zimbabwe is set to earn more from its gold as producers have almost doubled production.

Latest figures from Fidelity Printers and Refiners show that gold output for the first two months to February 2022 was 5,131kg against 2,168kg of gold produced prior year comparative.

Dr Wilson Gwatiringa, RioZim Group Corporate Affairs Executive said the company already has its plans which it will stick to.

He said what is happening to international commodities now is considered short term and as such RioZim will not ramp production to take advantage of the good prices.

Gwatiringa said the higher price situation can turn at any given time.

And already gold prices extended declines by Thursday mid morning after recording their worst drop in nearly 14 months in the previous session as a retreat in oil prices and planned diplomatic talks between Russia and Ukraine boosted risk appetite.

Business Weekly

Platinum Group Metals (PGM) producer, Mimosa Mining Company, says it invested US$40 million into capital projects in the six months to December 31, 2021 aimed at expanding mine life and production capacity.

“Capital expenditure increased 25 percent to US$40 million from US$32 million during the previous quarter as spending on the plant optimisation project accelerated and studies on the North Hill life-of-mine extensions were completed,” the company said.

It noted that the feasibility study was completed and discussions regarding fiscal accommodations were progressing with the Zimbabwean Government.

“The plant optimisation project is aimed at increasing capacity and improving process recoveries, but due to Covid-19-related delays, the project commissioning is scheduled for December 2022,” said Mimosa.

Business weekly

ZIMBABWE is still struggling to be readmitted to the London Bullion Market Association (LBMA), more than 13 years since it was booted out of the world’s largest gold and silver wholesale market.

The southern African nation was kicked out of LBMA in 2008 when its gold output slumped to 3 072kg tonnes, far below the 10 tonnes per annum required to guarantee membership.

However, the requirement was fulfilled in 2015 when production hit 21 tonnes.

Since then, the country’s gold output has been on an upward trajectory, with production hitting 19,05 tonnes in 2020 before increasing to 29,6 tonnes last year.

“Joining the LBMA is an advantage to Zimbabwe as the prices are better,” said Nobuhle T Chikuni of the Zimbabwe Environmental Law Association in her report titled: The need for responsible mining practices in Zimbabwe.

Following the improvement in gold production, Zimbabwe has been trying to be readmitted to the LBMA with no success.

Chikuni said gross human rights violations, land degradation and poor law enforcement in the mining sector, could be some of the reasons Zimbabwe’s admission has been delayed.

“Until Zimbabwean authorities remedy this, then it is unlikely that they will meet the criteria set by the LBMA for readmission according to the Bullion post. In addressing this, Zimbabwe should adopt the Organisation for Economic Co-operation and Development (OECD) guidelines on responsible sourcing among other global transparency initiatives in the extractives sector,” she said.

Chikuni said the LBMA had adopted responsible sourcing.

LBMA established the responsible gold guidance refiners to combat systematic or widespread abuses of human rights, to avoid contributing to conflict, comply with high standards of anti-money-laundering and combating terrorist financing.

“Zimbabwe is working towards achieving a US$12 billion mining economy by 2023, it is important to ensure that the mining sector improves investor confidence by putting in place measures that ensure that mineral produced in Zimbabwe passes the due diligence test at the global level and people are willing to buy it and invest in the country’s mining sector.”

She said the time to start dealing with corruption and lack of accountability in the mining sector was now.

Chikuni said lack of proper and effective regulation in the mining sector was making it difficult to set up effective traceability systems and at the same time are creating opportunities for opportunists to cash in at the cost of Zimbabwean people.

“Zimbabwe needs to improve on the Policy Perception Index to ensure maximum benefits from the mining sector.

“All this starts with the adoption of the OECD guidelines and other responsible sourcing initiatives that are being adopted by mineral rich countries in Africa, if not now then when?”

Efforts to get a comment from the ministry of mines on the progress regarding the country’s readmission to the LBMA were fruitless, but ministry deputy minister Polite Kambamura told Mining Magazine recently that the government was making frantic efforts to be readmitted to the global market.

Newsday

LITHIUM mining and exploration junior Prospect Resources says the company does not plan to undertake further exploration activities at its Chishanya Carbonatite Project.

Anerudo Mapuranga

Last year the company announced that preliminary results undertaken from a soil sampling process focusing on rare earth elements (REEs) at Chishanya in the southeast of Zimbabwe are very encouraging.

According to Prospect, the REE knowledge gained at Chishanya will help the company in evaluating other early-stage projects in Zimbabwe.

“Following a rock chip sampling program to investigate the potential prospectivitiy of the Chishanya Carbonatite Project (Chishanya) for economic rare earth element concentrations, Prospect does not plan to undertake any further exploration activities on this project.

“The knowledge gained at Chishanya has assisted the team in understanding the regional geology and Prospect is evaluating other early-stage projects in Zimbabwe for their prospectivity for rare earth elements,” Prospect Resources said.

Zimbabwe is reportedly sitting on 17 REEs, namely cerium, dysprosium, erbium, europium, gadolinium, holmium, lanthanum, lutetium, neodymium, praseodymium, promethium, samarium, scandium, terbium, thulium, ytterbium, and yttrium.

REEs are now widely used in automobiles, electronic equipment, military technology and other fields.

Although Zimbabwe has not carried out a comprehensive mineral survey, President Emmerson Mnangagwa in 2019 revealed that the country’s REEs are the second largest in the world after China’s.

Prospect said the Chishanya phosphate project is one of five known phosphate-bearing carbonatites in Zimbabwe.

The deposit has been explored by a number of companies since the 1950s including Anglo American and Rhodesia Chrome Mines Ltd.

The deposit is a series of un-exploited phosphate-bearing, apatite-magnetite lenses in carbonatite located near Birchenough Bridge, Manicaland. The project will be located at Dorowa near Buhera.

A LOCAL conservationist has said the Zambezi Valley ecology is under threat from hydrocarbon exploration and extraction of minerals.

Jaeninne Norris, a conservationist with Zambezi Valley Conservation Network, yesterday told NewsDay that small-scale mining and gold panning was a growing environmental and wildlife threat and was becoming a complex socio-economic issue.

“This practice, along with commercial mining is illegal in riverbeds and in the protected areas under the management of the Zimbabwe Parks and Wildlife Management Authority (ZimParks), unless a permit is issued by the Environment, Tourism and Hospitality Industry minister with the consent of the Mines minister,” Norris said.

The Zambezi Valley Conservation Network is exploring innovative solutions for mining and believes there are opportunities for conservation entities to partner with development organisations which are experienced in developing, rolling out and scaling viable sustainable livelihood programmes.

While mining has been identified as a key sector for the attainment of National Development Strategy 1 goals, the impact of some mining operations has become a cause of concern.

The government promulgated Statutory Instrument 104 of 2021 Environmental Management (Control of Alluvial Mining) (Amendment) Regulations, 2021 (No 2) which regulates mining operations across the country.

Zimbabwe is in the process of reviewing mining laws and policies to ensure communities benefit from their resources and to improve transparency in the
sector.

Newsday