Mining ZimbabweLatest Mining News, Policy and Industry Updates

HWANGE Colliery Company Limited (HCCL) is inviting tenders from “eligible” dealers to buy scrap metal at the firm’s concession in Matabeleland North Province.

In a statement, HCCL said the request for invitation to tender was issued by the company’s engineering department for the buying of scrap metal that had been disposed of in the form of obsolete equipment and plant structures.

“The company invites eligible scrap metal dealers to submit sealed tenders for the purchase of scrap metal in HCCL. The bidders should demonstrate their technical and financial capability to prepare, load and transport the scrap metal from HCCL concession,” said the colliery.

Completed bids should be addressed and delivered at HCCL offices in Hwange before close of business on Friday 18 March 2022.

Meanwhile, in the past concerns have been raised by industry over the continued exportation of scrap metal as the move was disadvantaging local businesses who need the raw material.

Given that Zisco was not operational, scrap metal has become a critical value chain component hence it is in high demand locally and abroad.

However, the Government has announced that it has secured a local investor, Kuvimba Mining House, as a strategic partner to revive Zisco, which ceased operations in 2008.

The closure of the company that was once Zimbabwe’s steel manufacturing giant was largely due to maladministration and the adverse impact of the illegal sanctions.

Kuvimba has reportedly proposed to invest up to US$1,3 billion over three years to revive operations at Zisco.

In the past, efforts to resuscitate Zisco hit a brick wall after foreign investors such as Essar Global, Jindal Steel and Power as well as Global Steel Holdings of India and Hong Kongbased firm, R and F, failed to agree on terms with the Government leaving stakeholders dejected.

However, stakeholders have expressed optimism that the selection of Kuvimba Mining House as the lead investment partner in the resuscitation of Zisco would yield positive results this time around.

Kuvimba is a reputable player in the mining and metals sector and has previously been involved in the resuscitation of Jena Gold Mine in the Midlands province as well as Shamva Gold Mine in Mashonaland Central province.

The industrial sector has also highlighted that due to scrap metal exports, local firms were being compelled to spend more importing the scrap and thus rendering the domestic players uncompetitive.

Scrap metal is largely used by steel manufacturers and foundries. 

The Chronicle

The Zimbabwe Investment and Development Agency (ZIDA) expressed reservations over the eight percent management fees from gross revenue proposed by Kuvimba Mining House (KMH), a company selected to revive the Zimbabwe Iron and Steel Company (ZISCO), Business Weekly has established.

The Government selected Kuvimba to revive ZISCO, once Africa’s largest steel mills after ZIDA recommended three investors from six that had initially shown interest in the Kwekwe- based integrated steel works.

Kuvimba, which is owned 65 percent by the Government, has proposed to enter into a threeyear management contract with ZISCO and inject US$1,3 billion into the business to revive mining and steel processing operations, according to a due diligence report submitted to Government in November 2021.

The contract, ZIDA described as “too rich” would be for three years, after which ZISCO may choose to extend or assume full responsibility of operations. It is targeting to reach annual output of one million tonnes of steel in three years from the date of signing the contracts.

The Cabinet selected Kuvimba among three shortlisted potential investors, paving way for negotiations and signing of binding agreements.

Industry and Commerce Minister Dr Sekai Nzenza said negotiations for binding contracts would commence soon.

Kuvimba proposed a management fee of 8 percent but ZIDA, which conducted a due diligence on ZISCO’s potential investors, said a flat management fee “seems loosely structured and may be lopsided” to the advantage of Kuvimba.

Kuvimba owns various mining assets in Zimbabwe including gold, platinum, nickel and chrome.

Eight percent management appears too rich, there is need for revenue split to be equitable.  We would…propose that the management fees be structured differently,” ZIDA said.

“A lower base management fee of say 5 percent plus an incentive above an agreed IRR hurdle of say 15 percent would align parties’ interests.
“We are happy to elaborate and debate this matter,” said ZIDA in its November 22 due diligence report.

ZISCO stopped operations in 2008 due to mismanagement and lack of funding to retool.

Since then, the Government engaged various potential investors in a bid to re-open the company but with limited success. Kuvimba won the tender ahead of other two final bidders who had expressed interest in ZISCO, which used to employ 5 000 people.

However, ZIDA said Kuvimba was already involved in mining in the country and expert knowledge in the extractive sector, giving an edge over other potential bidder. ZIDA said

Kuvimba has managed to revive distressed companies such as Shamva Gold Mine, Freda Rebecca, Sandawana and Jena.

“Funding will be through debt and quasi-equity facility,” said ZIDA, adding Kuvimba “has existing relationships with funders and mobilization will be easier.” Who else was in the race

PAI International, incorporated in England and Wales submitted its unaudited financial results for the period ended 30 November 2020, showing an asset base of 27 000 pounds.

It proposed to partner with AEEPL, Anglo American, CMS, Blue International and other local firms. Anglo American would undertake mining operations with AEEPL being a technical partner for steel manufacturing. PAI and its partners would work with the ZISCO and take joint decisions on the revival of the company.

PAI had also proposed share ownership and options schemes to incentivise workers.

In addition, it had proposed technical partners to be off takers of the steel products, so share agreements would be part of the strategy of financing the operations.

Further, it proposed to attract financing through an Initial Public Offering on the Johannesburg Stock Exchange, where it hoped to attract enough financial resources to further develop the company’s operations.

ZIDA recommended that PAI was a small company, which was established in 2019 and had not been involved in any mining venture.

On its proposal to extinguish the debt, through offering shares to the public in a new stock issuance, ZIDA noted that PAI did not guarantee that the company would garner positive attention since companies that offer IPO lacked a proven record of operating publicly.
Epikaizo and Sebeuzani
Epikaizo and Sebeuzani submitted a joint proposal where the former would mobilise funds from the United States in the form of US Treasury bonds to the tune of US$3 billion while the later would coordinate technical partners for the project.

The directors for the joint venture company are Engineers M Chivaura and T Revanewako, who once worked for ZISCO, and Dr R Chamba.

The joint venture indicated it would mobilise US$3 billion through US Treasury bonds upon submission of an evaluation report on ZISCO.

The company sought to determine the value of ZISCO assets from a valuation exercise and geological reports to raise capital.

If the outcome was favourable, it would engage technical partners with expertise in mining and steel production.

Government shareholding would be negotiated, taking into consideration the equity brought by other parties to the project.

Its technical partner in the bid was SMS Group, a Germany family-owned business established in 1817 and has branches in 90 countries including in South Africa.

SMS has more than 100 years of experience in ferrous and nonferrous plant technology.

The resuscitation strategy sought to do away with blast furnace operations and introduce new ultra-low-cost technologies which eliminate the expensive and highly polluting coke making processes for use of coking coal.

Epikaizo would also seek to invest in a 600MW power plant using environmentally compatible coal technologies and incorporate new mineral beneficiation processes.

In its recommendation, Epikaizo-Sebeuzani joint bid has failed to satisfactorily explain its investment of US$3 billion.

According to their submissions, the company would use United States Treasury Bills for financing the proposed deal.

THE Zimbabwe Diamond and Allied Minerals Workers Union (ZDAMWU) has rejected a 50% salary offer tabled by mining companies as a pittance, and insisted on United States dollar salaries.

In a statement, ZDAMWU secretary-general Justice Chinhema said recent salary adjustments which were reached between the National Employment Council and the Associated Miners Workers Union of Zimbabwe were a farce.

Workers in the mining sector have been awarded a 46% to 50% wage increase which will see the lowest paid employee earning $45 000 up from $30 000.

The highest paid will earn about $104 000, up from
$71 000.

According to the Nec, the mine workers will also receive United States dollar allowances ranging from US$198 and US$460 depending on their grades.

“The increments are nothing, but actually a selling out salary negotiation outcome. This is a mockery for the mine workers considering that the poverty datum line is pegged at $70 000 and most mining districts across the country are using US dollar, rand and pula,” Chinhema said.

“Those who claim to represent mine workers are representing their own selfish interests. As a union, we are reiterating that a minimum pegged around US$400 paid as per retention is at least acceptable. We need to at least revert to 2018 structures of US$286 and the remaining balance in RTGS [real time gross settlement]. We have since launched a court challenge so as to restore mine workers’ salaries.”

Employees in the private and public sectors are clamouring for United States dollar salaries as the local currency keeps losing value. But government has insisted that there is no going back to dollarisation.

Newsday

A fight has erupted in the gold rich Mazowe area — 40km north of Harare where a group of farmers are reportedly disrupting operations at a mine.

A long running attempt to have the alleged intruders at Zawadi Mining removed have drawn blanks as the provincial leadership in government and police are accused of failing to resolve the matter.

The fight over the lucrative gold claims has since spilled into the courts as owners of Zawadi Mining Private Limited led by Asante Mayeka are battling a group of farmers operating under Revmark Mining Syndicate.

Zawadi has sought protection from the alleged invaders but the police are taking longer than expected to act. Zawadi Mining filed a complaint against Revmark syndicate members with the police in June 2020 under case number RRB 471475 ZRP Concession. Again, no action was taken.

Sources said Revmark Mining Syndicate was given an opportunity to present its case to Mavhunga.  This was after Revmark syndicate members gained entry into the Zawadi mining claims.

Mavhunga did not respond to questions sent via WhatsApp while her mobile phone went unanswered several times.

The fight over the mine spilled into the High Court where Justice David Mangota referred the matter to the Mines and Mining Development ministry for resolution. Revmark (the applicant) had escalated the matter with the High Court against Zawadi Mining.

In part the July 21, 2021 judgment reads, “Where upon after reading documents filed of record and hearing counsel it is ordered by consent that the application be and is hereby withdrawn.

“The dispute between the parties be and hereby referred to the ministry of Mines and Mining Development for resolution. 1st respondent (Zawadi) shall continue erecting its fence around the claim known as Murodzi 45 and shall provide access for the applicants to and from their fields and pastures between the hours of 6am and 6pm.

“The applicant hereby undertakes not to, in any way interfere with the mining operations of Zawadi Mining Pvt Ltd including carrying out any mining activities within that mining company’s claim known as Murodzi 45. In the event that the applicant breach paragraph (4) of this order, the 1st respondent be and is hereby authorised to close the entrance leading to its claim known as Murodzi 45.”

But Revmark has allegedly been in breach of the court order.

The dispute is raging like veld fire, prompting Zawadi’s lawyers to petition police Commissioner General Godwin Matanga.

In a letter dated December 23, 2021, Joel Mambara and Partners representing Zawadi Mining pleaded for Matanga’s intervention.

The letter reads: “We act on behalf of our client Zawadi Mining Pvt Ltd, a company duly registered with the laws of Zimbabwe. Hence note our legal interest. Our client made a report of theft of gold against Vavarirai Revesai and his accomplices, Isaac Mukazi, Christopher Mukazi, Anymore Makarichi, and Andrew Chaboka under RRB4714575.

“They are threatening our client‘s employees as of December 23, 2021 in violation   of a court order HC 37557/1. As of today nothing has happened and the police did not go to collect samples to determine the correct value of gold stolen as well as conduct any investigations,” the letter reads.

“What it basically means is that the police are now under-policing /investigating and as such the case runs the risk of being thrown out of court for lack of evidence. I must state that I am a holder of mining rights and our client mine is registered under Murodzi 45 concession.”

Revmark Mining Syndicate leader Vavarirai Revesai’s phone went unanswered after several attempts to get his comment while Zawadi representatives declined to discuss the matter, saying it was subjudice.

Police spokesperson Paul Nyathi was not available for comment.

The Independent 

Australian Stock Exchange- listed Prospect Resources that recently executed a binding Share Sale Agreement (SSA) with Huayou International Mining for the sale of its 87 percent shareholding in Prospect Lithium Zimbabwe, said they are ready to invest the proceeds in other similar investments.

The deal is valued at US$377.8 million in upfront cash consideration, equating to approximately A$1.23 per Prospect ordinary share. The transaction represents the culmination of the strategic partnership process undertaken by Prospect since August 2021.

However, with seven non-binding offers being made for the licence in November 2021, Prospect’s 87 percent stake in the asset was sold to Huayou Cobalt, the remaining 13 percent stake is held by a Prospect geologist (7 percent) and the land user upon which Arcadia is situated (6 percent).

According to Prospect’s managing director, Sam Hosack, the company also plans to distribute 95 percent of the sale proceeds to shareholders in the form of a capital return. Going forward, Prospect intends to use the proceeds of the Arcadia sale to pursue similar projects.

“We are proposing to retain about A$30-million to A$60-million to take the existing team and look at some of the other assets we have been working through to do a similar exercise to Arcadia again,” he says.

Being a lithium-focused business, Prospect entered Zimbabwe in early 2012 looking for gold and other opportunities.
“We are very much an exploration-focused business. With lithium becoming a very critical mineral, we went in earnest looking for lithium and discovered, and then drilled out Arcadia, which at that time was the fifth- or sixth-largest hard-rock lithium resource globally. It put Prospect on the map,” says Hosack.

“We know Zimbabwe and it is very prospective. Our team is mostly made up of Zimbabweans and we have a world-class team of Zimbabweans that live in Australia and have a really strong network and technical and geotechnical understanding of Zimbabwe in terms of the country’s geology and operations,” says Hosack.

Zimbabwe is also set to benefit from the sale, through the payment of capital gains tax on selling of the asset held.
From the gross sales of A$528m, we estimate the company will need to pay Zimbabwe capital gains tax of approximately US$30m, plus US$15m across transaction costs including legal and adviser fees and a damages fee on breaking its existing offtake.

“The transaction is also expected to complete in late first quarter or early second quarter of 2022, the company still expending on corporate expenses, likely exploration, and new projects development up until then.”

“In summary, we estimate Prospect will have approximately A$500m after deducting expenses and tax, and including cash prior to transaction announcement (ca A$23m) and from in-the-money options we expect to be mostly exercised (A$11m).”

Business Weekly

The rains may have halted progress on the ongoing gas and oil exploration project in Muzarabani, Mashonaland Central, but it has not dampened the mood and expectations of villagers in the district.

Never has a project impacted the imagination of villagers the way the Invictus oil and gas exploration project in the Zambezi Valley has.

Invictus, the Australian firm, has been conducting preliminary tests in Muzarabani District of Mashonaland Central in preparation for drilling the first exploration well before June 2022.

In the early 1990s, Mobil undertook the first oil explorations in the Zambezi Valley — of which Muzarabani is part — and reportedly found gas, but the gas remained unexploited.

Subsequent reprocessing of the Mobil data and enlisting of the latest technology point to Muzarabani hosting significant deposits of petroleum oil and gas.

Ongoing work will, in the next few months, be expected to add clarity to the data, the upcoming drilling programme and the way forward.

Invictus, the company undertaking the exploration work, says in the meantime, it is focusing on delivering growth and fostering relationships with stakeholders and host communities.

Villagers note that Mobil’s gas and oil exploration stretching from Hurungwe and Chirundu lasted three years in the early 1990s before throwing in the towel, although concluding that there was “nearly “100 percent potential of gas and a high possibility of oil occurrence in the  Zambezi Valley.

The Chairman of the Muzarabani Rural District Council (MRDC), Alderman Ashton Chiweshe, confirms that the expectations are high, adding: “We expect a drastic improvement in the fortunes and lifestyles of the people in Muzarabani first, and secondly in the whole of Mashonaland Central, as the host province of the project.

“We expect development. As we speak, right now there is engagement of locals in such things as bush clearance and security to safeguard the exploration equipment. The people involved in these processes are locals,” he explains.

In the long run, he says, the expectation is that this is going to be a “megaproject”.

From the perspective of villagers in the district, the expectation is that once it takes off, there is going to be “total transformation” of the district and the project will recruit more locals required for various stages of the Invictus project.

As the project progresses and more people are recruited, accommodation will be required, he explains, and this will likely result in the growth and expansion of both Centenary and Muzarabani. For example, he points out, there could be more banking services, and certainly more shops going up, translating into improvement and development of the district, the two centres and the whole Mashonaland Central province.

He says: “I think there will be a lot that will happen.”

Generally, there is appreciation of the way that Invictus has gone about in undertaking its work in Muzarabani because there are constant consultations and engagements with the locals, he observes, explaining that he has attended some of the Invictus activities.

A case in point is that while Muzarabani has 29 wards, Invictus is active in 11 of these, where they expect to drill boreholes, once the rainy season is over.

The attendant improvement of the road infrastructure is part of the Government’s contribution under the Emergency Road Rehabilitation Project (ERRP).

Part of what informs the heightened expectations of the villagers in Muzarabani is their observation of how local businesses have responded to the ongoing exploration work. There is growing interest and enquiries for new businesses opportunities in the district and, villagers conclude the enquiries pointing to a possible boom of the district and province.

Pointing out the improved main road, villagers say this act will open up more areas and, in the process stimulate economic and social activities and development.

ErizaMariba, says a good road network, opens up access to markets for agricultural producers to move their crops, while also allowing them to purchase inputs. A good road network makes travel and movement of goods much easier.

Councillor Raphael Maruziva, who is in charge of the Social Services Committee of the Muzarabani Rural District Council, was part of the Mobil exploration workforce in the 1990s.

He believes the benefits of the Invictus project are that it will generate sizable revenue, create jobs and business opportunities, as well as bring new roads and access to water and power to rural areas.

Projects such as the one being spearheaded by Invictus have the potential to stimulate economic growth, reduce poverty, and raise living standards.

“We anticipate improvements in how the people here live. For example, during the first phase of the current exploration, people ended up getting employment.

“Some of the locals employed on the project ended up buying properties at Muzarabani Business Centre.”

He points out that among the immediate benefits of the exploration project are that boreholes will be drilled for the benefit of the villagers in both Mbire District and Muzarabani, while jobs have been created.

For village health worker, Kumbirai Ndhlovu, you would think Invictus has already confirmed as positive, the findings of the exploration. She is excitement personified, when it comes to what the project will mean for Muzarabani.

In other countries where gas and oil have been discovered these have generated employment, given a boost to local businesses, installed and maintained new infrastructure, while offering training and skills transfer to locals. 

New Zian

A 22-YEAR-OLD Domboshava man was hospitalised after he suffocated trying to rescue a colleague trapped in a gold mine shaft.

Ngoni Sika (53) died in the mineshaft while Peter Mudyiwa (22), who tried to rescue him, had to be retrieved by his colleagues while unconscious.

Mashonaland East provincial police spokesperson Inspector Simon Chazovachii confirmed the incident.

According to police, on February 26, at around 11am, Sika was working in a shaft at Nhokwara Magigi Mine in Domboshava with colleagues Peter Chingomo (41), Mudyiwa (22) and Tinei Tom (37).

Sika reportedly descended to the 30m shaft using a rope tied around his waist.

The deceased reportedly shouted for help, telling his colleagues that there was a gas leak in the shaft and he was having difficulty breathing.

Mudyiwa reportedly went down the shaft using the same rope, but was also affected by the gas and fell unconscious.

The other workers managed to retrieve the pair, but Sika was already dead.

A report was made to the police in Chinamora who attended the scene before ferrying the deceased’s body to Makumbe Hospital mortuary for post-mortem.

Mudyiwa is admitted to the same institution.

NewsDay

A TOTAL of 52 families in Lubimbi, Binga, Matabeleland North are facing eviction after Hwange Colliery Company got a grant to extract coal from the area.

The community was already facing eviction to pave way for the construction of the Gwayi-Shangani Dam.

Lubimbi ward councillor, Chrispen Munkuli confirmed the developments.

“As a community, we have discussed the issue and agreed that we will not agree to the evacuation.  However, we are advised that he mining company is now ready to mine.”

Munkuli said they were waiting for the district development co-ordinator (DDC) to address the villagers on the issue.

DDC Land Kabome said he was aware of the issue.

In 1945 the Lubimbi community was moved from the Madilo area between Shangani and Kana rivers to pave way for a Cold Storage Commission project.

Some were moved to the area during the construction of the Kariba Dam around 1956, and the others came from Sinamatela area around 1950 and were moved to pave way for the establishment of the Hwange National Park.

“It has not yet reached that level of evacuation but l am aware that HCC was given a mining claim long back. The colliery is supposed to go to the community and advise the villagers,” Kabome said.

“We have not yet engaged the community. We will update you, because there will be certain things we expect the HCC to do for the community.”

HCC public relations manager Beauty Mutombe said they were engaging the community.

“There are no evacuations at this stage, we are engaging the community through the office of the DDC but so far we have not yet done anything on site,” she said.

Newsday