Mining ZimbabweLatest Mining News, Policy and Industry Updates

ZIMBABWE’S defunct steel producer, Zisco, should leverage on its foundries and coke ovens that are still operational to produce mining and farming equipment as a first step towards the firm’s resuscitation, an official has said.

The Redcliff-based steel producing company ceased operations in 2008 due to operational constraints it went through on the back of the illegal sanctions imposed on Zimbabwe by Britain and her allies after the country embarked on the successful Land Reform programme in 2000.

In line with the aspirations of the National Development Strategy 1, the Second Republic was seized with efforts to secure a strategic investor to revive operations at Zisco.

Recently, the Zisco board chaired by Engineer Martin Manhuwa announced that they were presently in the process of adjudicating the steel giant’s potential partners with the hope of coming up with the best from the seven potential investors.

In an interview, Zimbabwe Institute of Foundries (ZIF) chief operations officer Mr Dosman Mangisi said: “As ZIF we are solidly behind the revival of Zisco, but the current state of structures at the company is that all are now obsolete.

“All the steel structures including those furnaces are now obsolete. As ZIF we are urging Zisco to consider using their foundries, which are still operational, as a way of breathing life into the company.”

Zisco has received bids from seven potential investors from which one will be successful and takeover the task of reviving the former steel giant.

The company’s board has designed a roadmap that involves modernisation and financial sustainability expected to help in the revival of the company.

Part of the roadmap is the short-term revival strategies targeting resuscitation of subsidiaries and bargaining on low-hanging fruits.

Mr Mangisi said all the obsolete structures at Zisco should be considered as scrap, and using its foundry, the firm should consider manufacturing mining and farming equipment which are on high demand locally.

“Zisco has a full-fledged foundry with all the necessary equipment to be able to manufacture the equipment. Using its foundry, Zisco can then take all the obsolete steel and use it to manufacture biters, bowl mills, water pumps and other equipment required by the mining and farming industry,” he said.

By doing so, the country will cut the import bill while also creating employment before full-throttle steel manufacturing operations begin.

“Currently, the company is employing about 400 workers but if the foundry and the coke ovens are operational, employment can be raised to about 1 500 workers.”

Mr Mangisi said the model, based on value addition and beneficiation, can also see local companies benefiting.

Using its coke ovens, Mr Mangisi said, Zisco can centralise coke manufacturing and become a raw material-manufacturing hub, substituting imports.

The local foundry industry is currently faced with a shortage of scrap metal and has been advocating for the Government to ban exportation of scrap.

Before going to the market, Zisco carried out several studies including technical evaluation, and market study which brought about possible trajectories to be possibly followed.

The Chronicle

The Zimbabwe ZhongXing  Electrical Energy (ZZEE) is set to commission its 50MW thermal power plant in Hwange, Matabeleland North Province before year-end, a Ministry of Mines official has said.

ZZEE is a  subsidiary of the Zimbabwe ZhongZin Coking Company, a joint venture company between Qualisave Mineral Resources of Zimbabwe and Yuxia ZhongXin Coking  Company of China.

“Phase one which will feed 50MW to the national grid is 97% complete and it is going to be commissioned before the end of the year by President Emmerson Mnangagwa,” said the Ministry of Mines and Mining Development’s inspector of mines and explosives for Matebeleland North, Tapiwa Makuvatsine.

“The phase two we are going to have two by 135MW of power generation and this is going to add 270 megawatts in the total national grid,” Makuvatsine said.

“We have players that are coming to play a pivotal role to support power generation in order to achieve the 2000 MW by 2023 in order to enhance and support the US$12bn  mining sector that we want to achieve.”

He said the power generated will be supplied to the national grid.

Zimbabwe requires about 1800MW daily at peak hours.

But, is currently producing an average of 1400 MW from power stations at Kariba, Hwange, Bulawayo, Munyati and Harare.

To cover for the shortages, the power utility ZESA imports from regional power utilities especially Eskom of South Africa and Hydro Cahora Bassa of Mozambique.

Business Times

Australia Stock Exchange-listed resources firm Prospect Resources has completed a staged optimised feasibility study for its  Acadia Lithium project near Harare, it has been learnt.

This study was undertaken by leading engineering consulting business, Lycopodium, with assistance from Prospect and selected external contributors.

The study confirmed strong technical and economic viability.

The feasibility study reflects the strong potential of Arcadia to become a compelling long life, large scale, hard rock open pit lithium mine in Zimbabwe.

It also confirmed that the project is among the best in the world for scale and cost of production when compared to existing operations and other prospective projects.

According to the company, a key competitive advantage lies in the quality of the lithium concentrate products, being high in grade and very low in impurities.

“It is very pleasing to have a viable alternative to the direct development pathway, being a progressive modular build to 2.4 Mtpa, now validated by the staged OFS undertaken by Lycopodium,” said Prospect MD Sam Hosack (pictured).

He said the study confirmed Arcadia as one of the “only independent, shovel-ready projects globally without off-take totally locked up”.

“It highlights that Arcadia is one of the world’s premier hard rock lithium assets, with outstanding projected returns under a more conservative development pathway,” Hosack said.

He said the feasibility study detailed “our clear differentiation with a range of potential product markets, and customers versus traditional spodumene projects”.

Even at the smaller initial scale, the Lycopodium results demonstrate a highly competitive forecast operating costs and margins, reflecting prices for technical petalite at a significant premium to traditional chemical-grade spodumene concentrate pricing, Hosack said.

“With strong lithium market conditions, and with renewed interest from potential partners, we are now completing the work on the direct pathway case before funding decisions are made,” he said.

The company noted that the project delivers outstanding returns independent of by-product credits and the lithium price environment and the staged development pathway outlined in the feasibility study presents a lower upfront capital hurdle, with an approach that addresses all technical, commercial and operating risks, and delivers a progressive ramp-up and ability to further optimise the second stage.

Arcadia is located in Mashonaland East Province, approximately 38km east of the Capital, Harare.

Business Times

Hwange Colliery Company Limited (HCCL)  has invited bids from prospective contractors to revive its coke oven battery which was decommissioned seven years ago, as part of efforts to boost revenues through beneficiation.

The collapse of HCCL’s coke oven in 2014  resulted in several new players invading the field.

HCCL administrator Dale Sibanda said the production of high-value products such as coking coal was key to its recovery.

“Bidders were invited to tender for the full rebuild of the company’s original coke oven battery which was shut down in mid-2014. The tender is for the rebuild of the by-products plant and ancillary plants and also for the supply of a completely new coke oven battery together with the by-products and ancillary plant,” Sibanda said.

He, however,  did not disclose how much is needed to fully rebuild the plant. HCCL operates three mines,  one underground mine  (the  3Main Underground Mine) and two open cast mines JKL and  Chaba.

In the six months to June 30, 2021, HCCL’s underground mine coal production was 19.41% higher than the prior comparative period due to improved operational funding and credit facility availed by the major original equipment manufacturer, which has been working well.

Total coal mined by opencast operations was 806 404 tonnes, reflecting a 55.59% increase in production from the comparative period in 2020.

“A total of 305, 679 tonnes of coal was delivered to Hwange Power Station during the course of the year, which was 14.03% increase from previous year. Deliveries into the power station were however negatively affected by plant challenges in the power station and limited stockholding space,” Sibanda said.

Sibanda said HCCL is now targeting an output of 200,000 tonnes per month as the company has done more work in stabilising operations.

He said the company is going to achieve the set target as the company’s performance continues to improve and funding support in the form of lines of credit to the business from local banks and regional financiers has been established.

“As a result, the operations are expected to stabilise within the next 6 to 12 months. The immediate target is to consistently produce at least 200 000 tonnes a month’’ HCCL said.

Revenue for HCCL in the six months to June 30, 2021 increased 38% to ZWL$3bn from ZWL$2.2bn in the same period in 2020, largely due to a combination of an increase in high-value coking coal sales and regular product price adjustments in line with market value. Volumes increased 23.7% compared to 2020.

However, HCCL swung into a ZWL$160m loss in the reviewed period from ZWL$1.2bn profit achieved in the prior comparative period.

Total assets shrunk to ZWL$16.3bn from ZWL$16.8bn in 2020.

Sibanda said HCC aims to grow its market share of coking coal sales in neighbouring countries.

He said focus was on increasing production and sales of high-value coking Coal. Coking coal sales increased by 28.6% from 41 053 tonnes in 2020 to 52 793 tonnes in 2021.

The coking coal sales volumes were however limited by washing capacity constraints. The plant was completed and commissioned in April 2021.

In the outlook, the company targets to increase coking coal production and sales which will in turn increase capacity to discharge obligations to creditors as well as create a positive balance sheet in the medium term.

Business Times

Gold miner, RioZim Limited, is technically insolvent with a staggering negative working capital of about ZWL$1bn, creating uncertainty in its ability to continue as a going concern.

RioZim’s current assets stood at ZWL$2.8bn in the reviewed period compared to a current liabilities value of ZWL$3.8bn, meaning current liabilities exceeded current assets by ZWL$1bn.

The financial position effectively means RioZim could find it difficult to pay off its obligations as they fall due.

Its loss in the six months to June 30, 2021, widened to ZWL$1.5bn from ZWL$77.4m  reported in the same period last year.

In its financial statements for the six months to June 30, 2021, published last week, the miner said its operations were significantly impacted by rain-induced power cuts and plant breakdowns in the first quarter.

“These factors ordinarily indicate the existence of a material uncertainty on the group’s ability to continue as a going concern and that it may be unable to realise its assets and discharge its liabilities in the normal course of business,” the miner said.

The company, however, said there were other factors which support the appropriateness of the going concern assumption in the preparation of the financial statements.

It said the group had secured funding to complete the BIOX project at Cam & Motor mine during the period.

It said installations of equipment and various components of the BIOX Plant were at an advanced stage at period end and continued subsequent to period end.

RioZim said commissioning of the Project is scheduled for Q4 2021.

Production is forecast to increase at Cam & Motor mine after commissioning of the BIOX Plant which will improve profitability and the working capital position of the group, it said.

“The group is in the process of installing generators at its mines to complement inadequate power supplies from the power utility. This will increase plant uptime and gold production,” it said.

RioZim said installations of an induction furnace which was purchased during the period at ENR were ongoing as at period end.

“The induction furnace will enable the Refinery to increase production through treatment of low-grade material from its dumps which will contribute positively to the working capital of the group,” it said.

RioZim chairperson Saleem Beebeejaun (pictured) said the promulgation of Statutory Instrument 127 of 2021 by the Government also added complexities on the pricing of local inputs, which despite the intended purpose, resulted in increased operational costs for businesses.

The overall effect of the Covid-19 pandemic and a difficult operating environment adversely impacted the operating results of the group for the half year period,” Beebeejaun said.

Production went down 4%  to 0.56 tonnes in the reviewed period   from 0.58 tonnes reported in prior year due  to the rain-induced power outages and plant breakdowns experienced in the first quarter of 2021 which stifled plant throughput across the group’s mines.

Beebeejaun said: “Cam also experienced persistent rain induced breakdowns on the plant which also negatively affected plant throughput. Consequently, gold production for the period fell by 9% to 0.181 tonnes compared to the prior period’s 0.199 tonnes.”

Revenue for the group, however, grew to ZWL$2.6bn in comparison to ZWL$616.4m due to a direct result of the depreciation of the local currency against the United States dollar.

Business Times

Chinese firm, Afrochine Dinson Colliery, has completed phase one of the construction of its coke oven battery in Hwange.

At a post Cabinet briefing Information Publicity and Broadcasting Services minister, Monica Mutsvangwa said: “…the construction of the foundation for the targeted coke oven battery at the Afrochine Dinson Colliery Plant in Hwange is complete.”

Business Times can report that works on the US$30m Afrochine Dinson Colliery plant started two years ago.

But, progress at the plant, which is set to become the biggest and most advanced coke oven in Zimbabwe,  was stalled by the outbreak of Covid-19.

Afrochine is a subsidiary of Chinese steel producer, Tsingshan Group.

With the first phase already completed, Mutsvangwa said the second phase of the construction was progressing well.

Upon completion of the second phase, the company is targeting to produce about 400tonnes of coke per day and also 500 000t per year.

In April this year, Afrochine’s parent company Tsingshan, completed the construction of two furnaces in Selous.

The company is also planning to commence construction of a third coke battery and a power station in the Hwange area.

Tsingshan who has been operating in Zimbabwe for 10 years is a top player ranked number 329 on the Global 500 Fortune companies’ index, and number 84 in the top 500 Chinese enterprises, and number 14 in Chinese private enterprises 500.

Tsingshan’s project is expected to transform Zimbabwe and potentially the rest of Africa given its huge economic multipliers on rail and road, logistics, power generation, and transmission.

In 2019, President Emmerson Mnangagwa, launched the US$12bn mining strategy and as the sector is expected to contribute about $20bn by 2023.

Business Times