Mining ZimbabweLatest Mining News, Policy and Industry Updates

Zimbabwe’s largest platinum miner, Zimplats has set aside US$521m for the construction of a 38MW furnace and an acid plant as it targets to double the smelting capacity.

The investment is part of the miner’s US$1.8bn kitty recently approved by the board to be invested over a 10-year period beginning in 2021.

Zimplats’ current smelting capacity is at 132 000 tonnes of concentrate per year and with the capital injection the mine is expecting to hit 380 000 tonnes of concentrate per year.

“The expanded smelter complex will have capacity for toll treatment of third-party material. The acid plant, in addition to reducing Point-source sulphur dioxide emissions, will produce sulphuric acid – a vital feedstock in the manufacture of fertiliser,” the company said in a quarterly update for the period ending December 31, 2021.

Zimplats reported that they are within course in the implementation of Mupani Mine development project and Bimha mine upgrade as replacement to Rukodzi, Ngwarati and Mupfuti mines set to be depleted in the financial year 2022, 2025 and 2028 respectively.

“Implementation of the Mupani mine development project, the upgrade of Bimha mine and the construction of the third Concentrator plant progressed according to plan during the quarter, with project-to-date expenditure of US$211m and commitments of US$131m at period end, against a combined budget of US$562m,”  Zimplats said.

In the period under review, mined tonnage decrease by 7% both quarter-on-quarter and year-on-year mainly due to disruptions at Mupfuti Mine during a changeover of trackless mining equipment service provider.

Milled tonnes increased by 3% quarter-on-quarter and year-on-year due to higher running time at the concentrator plants while 6E metal in final product decreased by 2% to 140 768 ounces from the prior quarter, impacted by the lower head grade notwithstanding the higher tonnes milled.

Business Times

Arnandale farm, just like much of its surrounding areas in and around Shamva, a small town north east of Harare gives a sad sight of faltered maize fields succumbing to an el Niño induced drought that has hit hard on much of the country and the entire Sub-saharan region.

By Kudzanai Gerede

In recent history, food insecurity has never reached intricate levels as currently looming for local villagers; with generally fair to bumper harvests conventionally sustaining this remote community but currently, the status quo points to a long lean year.

For most people here, the apparent poor harvests have rendered economic prospects sour as under-development is stifling growth opportunities for locals.

Little Shamva center which thrives on agricultural prosperity of the surrounding farms by offering a market for fresh local produce has seen the prevailing conditions already punctuating low trade volumes; there is generally little hope.

However, a panoramic view adjacent to Arnandale farm juxtaposes ailing maize fields and huge barren hills of mining debris from the now defunct mining operations believed to have been carried out by a German corporate decades ago and general convictions of large gold remains in this entire region are rife.

For this culturally preservative society, men have found a new economic mainstay to subvert the impeding calamity by engaging in artisanal mining.

Artisanal mining has always been practiced in this community for a period of time, only by a few village outlaws as the vast population concentrated on land cultivation but this year has seen a growing number of new comers into this laborious occupation driven by poor crop performance.

Along the meandering Pote River dozens of work pits where alluvial mining takes places are harbored. Hundreds of people in small groups of threes and fours work on the river beds on high alert of the ever marauding authority operatives as villagers do not hold certification to carry out mining activities.

They use shovels, picks, wheel barrows, chisels and metal bars among other simple hand tools with substantial amount of gold yielded on a daily basis.

“I have mined here for over 5 years with very few of us operating from this farm but lately we have realized a growing numbers of people joining us as a result of crop failure in our fields,” notes Calistas Mbirimi of Anardale farm.

“Women have also joined us but most of them prefer digging river sand which they sell to construction companies for building purposes whilst men go deeper for gold along Pote River,” he adds.

Arnold Magasa also from the same farm says there is abundant gold in the Shamva area but due to limited resources, lack of expertise and constant raids by local authorities they cannot dig deeper to boost their production.

“As you can see here, we do not have any other forms of livelihood except for those who do crop cultivation and mining. If we can be allowed to mine in an orderly manner we are prepared to do so, and if they provide us with a piece of land which we won’t be harassed by council operatives,”

In this area each group produces over 2 grams of gold per day and it is sold for not less than $ 20 dollar per gram. There plenty of gold buyers who travel from Harare every day and sometimes offer them working tools such as wheelbarrows and shovels for free to boost production.

“We are able to eke a living through mining here. We are sending our children to school, clothing and buying enough groceries for the family and also earn extra for pastime activities like drinking beer,” adds Magasa.

Artisanal mining have become a major economic event for most villagers in the country’s mining locations. There is however information gap between artisanal miners and government departments following the decriminalization of artisanal mining only if miners form mining syndicates.

Under the Reserve Bank of Zimbabwe orchestrated program, artisanal and small scale miners are required to form syndicates of 6 members or more and register with the authorities which earns them a mining certificate as a way of formalizing their activities and delivering their produce through formal channels.

Zimbabwe Miners Federation Chief executive officer, Mr wellington Takavarasha emphasized the role of artisanal miners in propping gold output and how the sector was helping alleviating poverty as a revenue earner in most resource rich but marginalized communities.

“Zimbabwe now that have been declared drought hit, the only recourse in the collapsing economy is artisanal mining which is more of a livelihood activity so we are going to find a lot of people joining the activity,” he stressed

263chat

CHINESE diplomats and companies’ unrestrained outbursts this week signalled how Zimbabwe’s foreign policy places the country at the mercy of big powers.

Zimbabwe has placed so much faith on one world power for everything from foreign direct investment to handouts.

The Chinese know that they have been the force behind Zimbabwe’s survival from waves of economic meltdowns and global isolation.

With that kind of money, almost the size of Zimbabwe’s GDP, China has literally placed the country in its palm.

This probably explains the Chinese embassy’s condescending utterances to the effect that without Beijing, Zimbabwe would be candle-lit, without power and internet connectivity. Harare has indeed placed itself at the mercy of its “all weather friend” and is no longer able to say yes or no to anything.

The “Look East” policy adopted by the late former President Robert Mugabe about 17 years ago without effort to spread tentacles to the rest of the globe has returned to haunt this country.

The Chinese’s recent outbursts following embarrassing exposure of their nefarious activities by local civil society groups could just be the beginning of more bad news to come as the Asian tiger begins to show its true colours.

One only needs to listen to the Chinese’s tone to see the level of subservience our country has placed itself and how aggressive our so-called “all weather friend” has become.

The Chinese pointed a warning finger at NGOs that dared question their mirthless attitude towards vulnerable villagers whom they have displaced in a manner most inhumane. They arrogantly declared that they cannot be blamed for exploiting legal loopholes in Zimbabwe’s Mines and Minerals Act, which allowed them to take over farmlands, whole villages and destroy delicate wildlife conservancies.

Surely, this can’t be how an “all-weather friend” would behave. But again, this is not all about friendship but billions of dollars that we have allowed ourselves to be enslaved by.

The continuous public outcry over Chinese investors’ disregard of labour laws and traditional customs cannot all be dismissed as unjustified and false accusations. Human rights watchdogs must stand on both legs and refuse to be cowed by the hostile language by Chinese firms and diplomats who have so much to hide.

This is why they chose a belligerent stance when NGOs called them to order.

But this is not to say Chinese people have done nothing in Zimbabwe. True, there has been so much investment from China in the past two decades, including an overflow of Chinese loans, yet these must not come at the expense of our freedoms and liberties.

For Harare, the message is clear — government must not put all its eggs in one basket. Zimbabwe must expand the scope of its FDI sources and spread diplomatic ties.

As the old adage goes, there are no permanent friends but interests.

NewsDay

LAW firms from around the world are advising as Chinese company Zhejiang Huayou Cobalt acquires Arcadia Lithium Mine in Zimbabwe, majority-owned by Australian-based Prospect Resources, in a deal worth $422 million.

Prospect says the transaction highlights the benefits flowing from the Special Economic Zone status of Arcadia Lithium Mine, with its potential to “put Zimbabwe firmly in the electric vehicle supply chain”.

Huayou has turned to Australian firm Minter Ellison, Jingtian & Gongcheng in China, Scanlen & Holderness in Zimbabwe, and Morgan Lewis Stamford in Singapore, according to a statement on the deal.

King & Wood Mallesons in Australia, Manokore Attorneys, and DLA Piper Africa in Zimbabwe are Prospect’s two legal advisers.

Scanlen & Holderness’ senior partner Sternford Moyo told Law.com International that lithium is a highly sought-after commodity.

“It is used in producing batteries, energy storage, electric vehicles, portable devices, and solar panels, and Zimbabwe has one of the world’s largest reserves of Lithium.”,

Moyo is leading the Scanlan & Holderness team advising Huayou on the Zimbabwe law aspects of the matter, assisted by partner Memory Mafo, and associate Tapiwa Chivanga.

The Morgan Lewis Stamford team advising Huayou is led by director Bernard Lui, supported by associate director Gina Ng, and associate Aden Tan.

Zimbabwe firm Manokore’s team advising Prospect was led by partner Jabulani Nhongo, supported by senior associate Farai Nyabereka, associate Tatenda Tendayi, and consultant Rainor Robinson.

The transaction is expected to be completed by the second quarter of 2022, subject to Prospect shareholder approval, Chinese regulatory approvals, and all other conditions being satisfied or waived.

CHINESE company, Freestone Mines, is facing litigation for embarking on quarry mining activities in the Dangamvura Mountain before obtaining the Environmental Impact Assessment (EIA).

According to section 97 of the Environmental Management Act, mining companies are obligated to undertake an EIA procedure and apply for an EIA certificate to the Environmental Management Agency (EMA).

Under the confines of EMA Act (Chapter 20:27) as read with Statutory Instrument 7 of 2007 an EIA is a legal requirement.

Last year in November Mutare City Council leased its 6,5-hectare stand situated surrounding Dangamvura Mountain to Freestone Mines and war erupted over failure to consult residents.

Residents demanded council to relocate the Chinese miner to a new site far away from residential areas and water distribution pipes.

Amid the war, both the local authority and Freestone Mines issued statements which confirmed the EIA process had not been undertaken.

Speaking Friday during a community dialogue meeting on Dangamvura Mountain, Centre for Natural Resources Governance (CNRG) director, Farai Maguwu revealed that plans are afoot to take Freestones Mines to court after it ignored the EIA process.

“The Chinese miner started preparatory works for a quarry on Dangamvura Mountain without an EIA. It means they broke the law already and a crime was committed. Section 97 stipulates that anyone who commence a project without EIA is liable to a fine or a jail sentence,” Maguwu said.

“As an organisation working with other organizations here like Manica Youth Assembly (MAYA), Mutare Informal Traders Association (MITA), United Mutare Residents and Ratepayers Trust (UMRRT) among others, we are going to  approach the courts over the quarry. As citizens from Mutare we are not happy with the issue happening at Dangamvura Mountain,” he said.

“Despite that an EIA certificate is there, if they start to mine on the mountain, we will approach the courts and file an urgent chamber application. This application will not allow the miner to operate since the matter will be pending at the courts of law,” he said.

“When CSOs registered their displeasure over the Chinese quarry, Mutare City issued a statement noting it had come to their attention that Freestones Mines had started preparatory works without EIA. We were surprised days later to see an EIA certificate dated 27 September 2021, noting that EIA process was conducted, and a certificate had been issued. However, on 18 November Freestones Mines had issued a statement saying they had not stated operations but were simply doing preparatory works as they wait for the EIA certificate,” Maguwu fumed.

NewZimbabwe

A local investment firm that signed a deal to revive Metallon’s Redwing Mine in eastern Zimbabwe, has taken the corporate rescue practitioner (CRP) of one of the country’s largest gold mining asset to court for terminating the transaction.

Duatlet, comprised of Probadek Investments, Betterbrands Mining — a vehicle owned by prominent gold dealer, Mr Scott Sakupwanya, and Prime Royal Africa on November 17, 2021 signed a four-year agreement with Redwing to revive the mine.

Redwing is under a corporate rescuer, Mr Knowledge Hofisi, of Aurifin Capital.

In the urgent application, in which Duatlet and Propadek are the applicants while Mr Hofisi, Redwing, Betterbrands and Master of the High Court are respondents, the CRP cancelled the deal although he had been furnished with proof of funding.

Duatlet is seeking a court order declaring the agreement valid and be implemented.

In his notice of opposition, Mr Hofisi disagree, arguing that the Duatlet failed to provide proof of funding, a substantive condition needed to operationalise the agreement.

According to Mr Hofisi, Duatlet tried to borrow money, pointing to lack of capacity to mobilise sustainable funding structures. He also argues that the matter should not be dealt with as urgent as it was filed 13 days after termination of the deal.

In terms of the agreement, the consortium was to provide initial working capital to the tune of at least US$3 million for procurement of critical spares, payment of corporate rescue costs, settlement of proven claims by creditors and payment of wages.

Redwing was to get 28 percent of net earnings while Duatlet would get the remainder at intervals directed by a steering committee using transactional platforms approved by the

Fidelity Printers and Refiners. Prior to the signing of the agreement, Betterbrands, which was co-opted into Duatlet was running the mine.

After signing the deal, Betterbrands was ordered to suspend all mining activities, with immediate effect, to pave way for the operationalisation of the joint venture agreement.

“First respondent (Hofisi) purported to cancel the joint venture mining agreement by letter dated 17th December citing that first applicant (Duatlet) had failed to furnish him with proof of funding of the project,” the court papers read.”

“This is notwithstanding that first respondent provided proof of funds through a later dated 29th November, 2021 and a bank guarantee on 15th December 2021.”

After cancelling the deal, Mr Hofisi is alleged to have directed — without approvals from Redwing creditors — Betterbrands to resume operations on December 20, 2021.

“Application is, therefore, seeking the leave of the court institute proceeding against the second respondent (Redwing) for an order declaring the joint venture mining agreement entered into between applicants and the second respondent (Hofisi) valid, and resultantly an order nullifying the authorisation of third mining respondent’s mining activities and the mining location and any subsequent agreements between second and third respondent,” the applicants argue.

Mr Hofisi maintains the fact that Duatlet failed to provide funding 14 days after signing of the joint venture agreement, cancellation of the transactions became inevitable.

“The operationalisation of the joint venture was subject to the first applicant satisfying the condition precedent and for all intends and purposes, only proof of funding was a substantive condition,” says Mr Hofisi.

In his rescue plan, Mr Hofisi said Redwing will need as much as US$6 million to restart production by bringing in new investors into the business valued at about US$30 million.

Underground gold production would resume from level one using conventional hand-held mining techniques before moving to level three to benefit economies of scale.

The Sunday Mail