Mining ZimbabweLatest Mining News, Policy and Industry Updates

GOVERNMENT says the repossession of underutilised mining concessions is an ongoing process.

Mines and Mining Development deputy minister Polite Kambamura said that it was not the government’s intention to take people’s mines, but encouraging them to utilise the concessions.

“The rational is not to take people’s mines, but for them to fully utilise them. Some have started working on the claims and the process is still ongoing though,” he said.

Last year, Mines minister Winston Chitando revealed that his ministry had successfully repossessed over 80 mining concessions under the “use-it or lose-it” policy.

“Under Zimbabwe, which is open to the business motto, these repossessed assets will be allocated to potential investors who really want them for productive purposes in line with Agenda 1 of the National Development Strategy.”

Government has in the past announced that it was also looking forward to re-sizing some of the concessions with a huge resource base and inordinate life spans and allocating them to other potential investors.

There have been concerns that prospective investors awarded the special grants in different mining sub-sectors of the economy were holding onto the claims for speculative purposes.

This ended up depriving Zimbabwe of its potential to exploit its vast mineral resource base.

The Mines and Minerals Act empowers government to repossess unused mining concessions to prevent speculative holding of valuable assets.

The regulation seeks to promote investment, job creation and ensure broader access to mining assets by allowing those ready to mine to file claims and obtain concessions.

In 2019, President Emmerson Mnangagwa launched a strategic roadmap for the mining industry to build a $12 billion sector by 2023.

Newsday

THE US$1,5 billion 600MW Hwange Power Station Unit 7 and 8 expansion project in Matabeleland North province will be a critical economic enabler beyond increased power generation as it will also boost several ancillary projects that feed into the on-going construction works.

Funded by China Exim Bank, Sinohydro and the Government of Zimbabwe through the Zimbabwe Power Company (ZPC), the project is now 89 percent complete with its first phase expected to be commissioned in November and the last phase sometime in March 2023.

The expansion project has already created more than 3 000 jobs for locals and has had downstream impact on suppliers of key materials.

The project’s positive impact dovetails with the Second Republic’s drive to transform Zimbabwe into an upper middle-income economy by 2030.

According to a presentation outline delivered by ZPC management during the visit to the project by the Parliamentary Portfolio Committee on Budget, Finance and Economic Development last week, several ancillary projects along the value chain are already benefiting while more are expected to also benefit from the power project.

These include the transport sector led by the National Railways of Zimbabwe, coal production and supply, cement and limestone production.

ZPC site Engineer, Forbes Chanakira, said the project is of immense benefit to the economy as it has created several spin-off projects.

“This project is a key enabler for economic growth and we have seen this happening as a lotof money is being channelled towards the support of local industries.

We have spent close to US$91 million on the local market through various contracts,” he said.

“We need to ensure that our local market is ready to participate in this major project.

The plant uses a lot of limestone, which has triggered economic growth as several limestone suppliers are benefiting” said Eng Chanakira.

He said 375 tonnes of limestone is required per day and 6 500 tonnes of coal.

Engagement with rail operators, NRZ and the Beitbridge Bulawayo Railway (BBR) is underway for the supply of the required materials.

The country’s major cement producer, PPC is said to be ready to supply the required limestone for both commissioning and operation.

Another beneficiary is the extension of the existing Deka water plant.

Just last week, ZPC announced that it has started receiving various components for the Deka project, which is funded to the tune of US$48,1 million from a line of credit extended by Indian Government.

Hwange Power Station draws raw water for electricity generation and cooling from the Zambezi River and the Deka water project is crucial in that regard.

The water demand for Unit 7 and 8 is 1 860 cubic metres per hour and a new 250 000 cubic metres reservoir to complement the existing one has been constructed as part of the expansion project.

The power station is expected to generate more than 60 percent of Zimbabwe’s electricity needs following the expansion.

The Chronicle

The train arriving at the Maputo port, hauling 40 wagons each carrying 2000 tonnes of coal from Botswana, shows how coal producers are riding the growing global demand for coal.

The train into Grindrod‘s Maputo dry bulk terminal in April was the first of its kind from Botswana, as the country steps up coal exports.

Further south, at South Africa’s Richards Bay, coal supplies to Europe are also growing. Between January and May this year, 40% more tonnes of coal were exported to Europe from the Richards Bay Coal Terminal than were exported in all of 2021.

Europe is stepping up coal imports as an alternative to energy imports from Russia. The European Commission now expects the EU will use 5% more coal than previously expected over the next decade.

Coal-producing countries are rubbing their hands with glee.

“We have received inquiries from Europe and so we want to (export),” Botswana President Mokgweetsi Masisi told Reuters in May.

“Typically what we’ve been getting is 50,000 tonnes a month is what they want to get, but we’ve also had others (inquiring about) long-term contracts. (We are) looking at a million tonnes a year from individual countries (combined),” Botswana’s Energy Minister Lefoko Moagi said.

Coal prices are now hitting record highs, and Botswana and South Africa have grabbed the opportunity with both hands.

Zimbabwe? Not so much.

Coal miners in a deep hole

Local coal producers are struggling to meet domestic demand and export needs.

The Hwange power station buys 90% of all coal produced by miners, including Hwange Colliery and Makomo Resources. But payments to coal suppliers are erratic. In 2020, the government allowed the power station to stop paying coal suppliers in US dollars, hurting their operations.

Coal producers for years had to take US$29 per tonne, paid for in local currency. This is at a time coal prices are soaring globally. According to Exxaro, one of SA’s biggest coal producers, coal prices averaged US$270 per tonne in the first half of this year. This was nearly double the price from the same period last year.

Until recently, Zimbabwean coal miners were also tied to short-term coal supply contracts. These left them with little chance of securing the funding they need to retool.

The result has been predictable. With debts piling up and profits falling, Makomo slid into corporate rescue in November. Production stopped, only restarting in June, but at a fraction of capacity.

“We are still working on a turnaround plan, but production has resumed,” Bulisa Mbano, who is leading the corporate rescue mission at the mine, said in June.

At Hwange Colliery, the company plans to raise output. But it lacks the capital to develop resources as much as it needs to.

Last year, Hwange Colliery grew coal production by 49.5%. The company plans to increase output through a US$15 million equipment supply deal and by opening new mining areas.

Coal hopes up?

The Zimbabwe Coal Producers Association is hoping to take advantage of rising export demand. Even if coal miners dig more coal, they face the problem of inefficient rail. Producers are clearing logistical hurdles, including deals to improve rail links to Maputo.

“We are interested in supplying the European market,” the organisation says. “Now that the prices are as high as they are, exports from landlocked regions are now viable.”

Domestic demand for coal will rise sharply next year when Hwange power station brings on stream two new generator units of a combined 600MW. Yet, already, producers are unable to meet local needs, let alone exports.  Smaller thermal power stations missed their power output targets in the first quarter of 2022. This was partly due to low coal stocks, according to a report by the Zimbabwe Power Company.

While Zimbabwean coal miners struggle with low prices and delayed payments, the story is different next door. In Botswana, India’s Jindal Steel & Power plans to build a new coal mine this year, targeting the export market. The Morupule Coal Mine has just signed US$20 million worth of supply contracts to Asia and Europe.

The coal train from Botswana to Maputo passes through Zimbabwe. It’s a poignant symbol of how, yet again, an opportunity is passing the country by.

Some 26 billion tonnes of coal lie under Zimbabwe’s earth, enough to last 834 years. But years of failure to invest means that the country can only watch as the coal boom roars past.

NewZwire

Premier African Minerals will start shipping spodumene concentrate from its Zulu lithium mine in Zimbabwe to China by March 2023 after signing an offtake deal with Suzhou TA&A Ultra Clean Technology Co, chief executive George Roach says.

Zimbabwe holds some of the world’s biggest hard-rock lithium deposits and Suzhou joins a growing list of Chinese firms that have invested in the southern African country’s battery minerals projects, including Zhejiang Huayou Cobalt and Sinomine Resource Group.

Roach said Suzhou is injecting US$35 million for the construction of a high-capacity pilot plant at Zulu, output from which would be nearly 50,000 tonnes of spodumene concentrate annually.

Construction can start immediately thanks to the funding, Roach said, with an aim to ship by March 31 2023 and ramp up production to around 48,000 tonnes of spodumene concentrate a year.

Lithium scramble

In March, Suzhou became a 13.38% shareholder in Premier through a private placement in which it injected US$14.37 million into the company, securing spodumene concentrate supply for Yibin Tianyi, China’s leading lithium chemicals producer, which Suzhou jointly owns with CATL, the world’s largest electric vehicle battery maker.

The prices of lithium minerals, key components in the manufacture of electric batteries, have soared in recent months, thanks to growing demand for clean energy sources, and Zimbabwe, starved of investment for more than two decades, hopes its lithium resources will recharge its moribund economy.

Premier picked Suzhou as a partner from a swarm of Chinese, European and Australian investors kicking the tyres of Zimbabwe’s lithium projects.

“At one point, I was involved with 11 separate negotiations with people all wanting Zulu!” Roach said. “It was a very intense period.”

Newzwire

VICTORIA Falls Stock Exchange-listed gold producer, Caledonia Mining Corporation, believes investing in Zimbabwe is profitable as the country’s business environment presents huge opportunity for its operations to evolve into a multi-asset gold producer and de-risk itself from being a single asset producer.

The giant mining concern says it will focus on becoming a multi-asset gold producer and continue to evaluate investment opportunities in the country, a development seen as a major boost to the country’s investment climate and policies.

In a latest trading update announcing a quarterly dividend of US$0,14 on each of its shares, chief executive officer, Mr Mark Learmonth, said the company’s strategy is focused on becoming a multi-asset gold producer.

Gold production so far this year has been strong, and we are on track to hit the top end of our guidance range of 73,000 to 80,000 ounces.

“Although the dividend continues to be a central part of our strategy, I am very excited with the opportunity that we have to evolve our business in Zimbabwe and de-risk it from being a single asset producer,” he said.

The dividend will be paid to shareholders on July 29.

Caledonia’s strategy to maximise shareholder value includes a quarterly dividend policy, which the board adopted in 2014.

The board will consider future increases in the dividend as appropriate in line with its prudent approach to risk management.

The listing on the VFEX is seen as a bold indicator of growing investor confidence in the country in response to comprehensive reforms being implemented by the Second Republic.

In June, Caledonia, which operates Blanket Mine in Gwanda said the United States-dollar denominated bourse has ushered in a new era of growth for its operations in Zimbabwe.

About US$8 million has been raised from VFEX.
The foreign currency-denominated stock market has a positive bearing on the country’s journey towards the establishment of an offshore financial service centre.
All global companies invested in Zimbabwe can seek a listing on the VFEX.

The mining company said it has spent US$14 million on the solar project, which will drastically reduce its power costs.

The 12MW solar plant is expected to provide 27 percent of the mine’s electricity requirements. In 2020, Caledonia announced that the solar project was part of efforts to address electricity constraints that have over the years affected the mining industry.

The project is in line with the Government’s strategy to boost power production. The mining sector is critical in generating foreign currency, contributing about 70 percent of the forex earnings, largely driven by gold, platinum and diamond.

The Chronicle

The government of Zimbabwe has banned the export of unprocessed granite following a call by the President to ensure value addition and beneficiation of granite before export.

Rudairo Mapuranga

President Emmerson Mnangagwa ordered the government to come up with a Statutory Instrument that bans the export of raw granite because the country was losing over 300 per cent of revenue due to the export of unprocessed granite.

“When you sell that block it earns US$4.5 million, when you break it into stabs you earn US$12.9 million. What would want (if you are the owner of this block) to sell it at US$4.9 and not at US$12.9? No one. So, Minister of Industry, go and craft a Statutory Instrument to ban the exportation of raw blocks,” President Mnangagwa said.

The government is optimistic that the mining sector will fetch an annual revenue of US$12 billion by 2023, with value addition and beneficiation sighted as critical for the achievement of the mark.

Following the call by the President, Minister of Mines and Mining Development Hon Winston Chitando crafted the following Statutory Instrument (SI 127 of 2022) which was published yesterday.

Mines and Minerals (Prohibition Order of Exportations of Unprocessed Granite) Notice, 2022

IT is hereby notified that the Minister of Mines and Mining Development, in terms of section 3 of the Base Minerals Export Control Act [Chapter 21:01], hereby makes the following notice:

Title

 1. This notice may be cited as the Mines and Minerals (Prohibition Order of Exportations of Unprocessed Granite) Notice, 2022.

Interpretation

 2. In these regulations—

“Act” means the Base Minerals Export Control Act [Chapter 21:01];

 “exportations” means sending unprocessed granite to another country for sale;

“unprocessed granite” means the unprocessed light-coloured igneous rock with grains large enough to be visible with the unaided eye.

Prohibition order

3. (1) The export of unprocessed granite is hereby banned with immediate effect, except with the authorisation of the Minister in writing.

(2) Notwithstanding subsection (1), preexisting valid contracts for the export of unprocessed granite will be allowed to continue until they expire.

Offence and penalty

4. Any person who contravenes or fails to comply with this notice shall be guilty of an offence and liable to—

(a)    a fine not exceeding level 9 or twice the value of the base mineral in respect of which the offence is committed or whichever is greater; or

(b)imprisonment for a period not exceeding two years, or to both such fine and such imprisonment.

GET S.I. 127 of 2022