Mining ZimbabweLatest Mining News, Policy and Industry Updates

IN 1989, American oil and gas company Mobil Corp asked for permission from Government to explore and drill natural gas and oil in Muzarabani, Mashonaland Central.

The company was convinced that the area was endowed with vast oil reserves that could be exploited commercially.
After intensive exploration work, Mobil did not find the black gold.

In 1993, it folded its US$15 million, three-year search for oil and gas after coming to the conclusion that the risks were too high to justify additional investment.

However, nearly 30 years later, another oil and gas exploration company stands on the brink of drilling its first test well around the very same area.

Australia Stock Exchange-listed Invictus Energy will this month begin drilling their first test well.

Last month, an armada of vehicles transporting state-of-the-art seismic survey equipment to be used to identify the best site for sinking exploration wells landed in the country.

The equipment is currently enroute to the site and the Muzarabani community is elated.

Chief Hwata (Olasis Tanyanyiwa Musemwa), under whose jurisdiction exploration work is taking place, said the massive project promises to transform his community.

“I know what a community can achieve with a project of such a magnitude,” he told The Sunday Mail last week.
“I was young when Mobil Corp did their exploration work.

“Five of my family members were employed on-site and in an instant, our lives changed for the better.”

He said the community is already beginning to feel the impact of Invictus’ work.

“Already, a lot has been done in the past 12 months and we expect major development here.

“The company has already promised us 162 boreholes in Muzarabani District before work commences.”

Muzarabani is a semi-arid district that receives low annual rainfall of between 450mm to 650 mm and often experiences seasonal droughts and severe intra-season dry spells.

“As community leaders, we have also presented our suggestions of infrastructural development that we would want in the area such as schools and clinics, especially for the vulnerable.

“Currently, there are 82 locals that are employed; we expect another 160 to be employed once the consignment of seismic survey machinery arrives this week (last week) and another batch to be employed when full operations begin.

“And already cash has started to circulate in the area.

“This alone is testament of bigger things to come.”

Natural gas and oil exploration in the area dates back to 1979 when the Rhodesian government initiated a search for petroleum deposits that drew blanks.

Mobil Corp latched on years later but the exercise also came to naught.

Today, Invictus says seismic study data gathered so far is promising. Seismic study refers to the process of using high-tech equipment to “listen” to underground vibrations in order to determine the existence of hydrocarbons.

Using modern sophisticated data processing techniques, Invictus reprocessed the data gathered by Mobil.

They, in turn, found strong evidence suggesting the underlying geographical structures may host domes and traps that could contain oil and gas.

Muzarabani locals remain obstinately rustic and conservative; they adhere to a strict cultural practice code.

Chief Hwata reckons the acknowledgment of the community’s cultural practices by Invictus may be one of the reasons why the project has been a success so far.

“I believe a lot of procedures were done right this time around,” he added.

“We also have a Government which was willing to follow the whole process through.

“A number of traditional ceremonies were done before exploration was done around the area in a show of respect to our culture.”

A network of rivers originating from the Mavhuradonha mountains in the south snake through Muzarabani before channelling into the Zambezi River and later into the Cahora Bassa Dam in Mozambique.

The river networks make Muzarabani a flood-prone area.

Underdevelopment has blighted the district for years.

Now, locals feel that the winds of change may finally be blowing across the area.

They, however, remain cautious.

Stanely Mudziviri, the local headman, implored Government to ensure there was development in the area.

“This is a very noble and good initiative which is set to eradicate poverty in the area,” he said.

“We would like to see an increase in secondary schools; at the moment, the nearest secondary school is 18 km away, which is very worrisome.

“There is a need for construction of dams in this area so that we can start irrigation.

“We hope that Government plays a monitoring role to ensure there is development.”

Government, he added, should guard against looting of the resources as happened in the Marange diamond fields in Manicaland.

“We heard Marange was endowed with diamonds but in terms of development, there is nothing much to talk about.

“It was only after Government intervened that some infrastructural developments started taking place there.”

In Muzarabani, however, hope continues to spring eternal.

Already roads linking Muzarambani villages to Mbire and Kanyemba have been graded.

Construction of accommodation facilities for workers has begun.

Small irrigation schemes have also been set up.

Local villagers are determined to complement the development brought about by prospects of abundant oil and gas deposits.

They reckon the sleepy town of Muzarabani will soon be a hive of activity.

After an arduous journey spanning 30 years in search of the precious black gold, they are confident of better days ahead.

The Sunday Mail

Local platinum production continues to rise on the back of sustained investments in capacity by producers over the years.

The country’s major producers — Zimplats, Unki and Mimosa — are expanding operations, while the new project, Great Dyke Investments, has opened two box cuts at its site in Darwendale.

It is expected to be operational by 2023.

Bravura, which has operations near Zimplats, has completed drilling and will open its first box cut before year-end.

According to the World Platinum Investment Council (WPIC), platinum production in Zimbabwe rose 12 percent to 243 000 ounces in the first half of 2021 from 218 000 ounces in the comparative period.

“Zimbabwean production increased by 17 percent year-on-year as a backlog of matte from the Unki smelter was processed through the Anglo Converter Plant (ACP) and refined,” the WPIC said in its quarterly report.

The country is envisioning a US$12 billion mining industry by 2023.

PGMs (platinum group metals) are projected to contribute US$3 billion as production is anticipated to jump from about 979 000 ounces in 2018 to about 2,5 billion ounces annually in 2023.

Gold and diamonds will contribute US$4 billion and US$1 billion, respectively, while chrome, iron ore and carbon steel will contribute US$$1 billion.

Coal and hydrocarbons are also forecast to contribute US$1 billion.

Lithium will generate US$500 000, while other minerals will weigh in with US$1,5 billion. Zimplats, the largest platinum producer in the country, has lined up capital projects valued at over US$570 million.

According to Mines and Mining Development Minister Winston Chitando, the investments dovetail with the country’s quest to grow the sector and contribute to a prosperous society in the next nine years.

Australian Stock Exchange-listed Zimplats spent about US$160 million on capital projects in the half-year period ending June 30, 2021, which represents a significant increase from US$104,2 million a year earlier.

Unki Mines recently indicated it had invested US$48 million towards increasing its concentrator capacity, which is expected to boost output by 30 percent.

The group’s general manager, Mr Walter Nemasasi, said the new concentrator is set for commissioning sometime this year.

The new plant will be a second major value addition and beneficiation project by the mine after the commissioning of a US$60 million smelting plant by President Mnangagwa in 2019.

In 2019, Mimosa Mining Company invested in a new processing plant worth US$10 million that was expected to shore up processing capacity and production.

According to the WPIC, Zimbabwe’s second-quarter output was 17 percent higher when compared to the second quarter of 2020.

In terms of quarterly global production report, the WPIC noted that global mine supply jumped 65 percent year-on-year to 1 557 koz (thousand ounces), the highest quarter for two years, as the major producer, South Africa, recovered from the extreme disruption of second quarter 2020, supporting refined output with a drawdown of semi-finished inventory.

South African output increased 124 percent year-on-year due to a return to full operations at the Anglo American Platinum Converter Plant (ACP) following the shutdown in the second quarter of 2020.

Global refined supply is expected to rebound to near 2019 levels in 2021, rising by 21 percent to 6 047 koz on the back of the South African recovery following the extreme disruptions of 2020.

South Africa is anticipated to add 1 103 koz year-on-years, a 33 percent increase to 4 402 koz.

According to WPIC, South Africa’s output continues to exceed earlier production guidance, with the ACP operating ahead of expectations and the largely successful navigation of Covid-19 pandemic challenges.

North American volumes are forecast to grow by 8 percent as a project in Montana rampsup.

“Zimbabwe is expected to add 17 koz, up 4 percent, as the backlog of semi-finished inventory is refined in South Africa.”

In 2020, platinum production in Zimbabwe surged by 5 percent to 476 000 ounces from 455 000 ounces in 2019, becoming the only country to register growth among other top producing nations despite the adverse effects of the coronavirus pandemic.

The Sunday Mail

MS Pauline Banda, a young woman in her early thirties sits attentively at a roadside vegetable market in Lwendulu, a high-density suburb in the colliery town of Hwange.

She sits under the scorching sun watchful of any suspicious movement by her fellow vendors — a potential signal of the presence of police officers. The roadside markets are unregulated. After two years in the trade and numerous arrests by the Hwange Colliery and
Zimbabwe Republic Police, Ms Banda is contemplating on migration in search of better opportunities.

“After finishing my A-level I went for a certificate in Hotel Catering and Food Technology.

But, since then, I have never been employed despite several attempts in different mining companies. I now want to go to Victoria Falls, maybe I will get a job,” said Ms Banda.

Hwange is dominated by coal mining companies. Mining companies’ world over provide job opportunities to both the educated and uneducated members of the community. But young women in Hwange are struggling to penetrate the industry. Zimbabwe Diamond and Allied Minerals Workers Union (ZDAMWU) Secretary General Mr Justice Chinhema notes that the mining sector is male-dominated.

“We feel there is a need to break this barrier. It is worse in Hwange; you hardly see female workers engaged. Most of the few women in jobs are employed as guards, janitors or general hands. These days there is no work that women cannot take. Gender equality has to be applied and every person, if qualified for a job, should be given an opportunity.

As ZDAMWU we have created a Woman, Youth and Gender department to promote gender equality, equity and empowerment of women and young workers in the mining industry. It is also pushing for the ratification of the International Labour Organisation (ILO) convention 190 which deals with sexual harassment,” said Mr Chinhema.

The eighth Zimbabwe Vulnerability Assessment Committee (ZimVAC) 2020 – Urban Livelihoods Assessment notes that urban areas provide several socio-economic opportunities for many people but are also becoming increasingly precarious places to live in, especially for low-income residents. The Covid-19 pandemic and its debilitating impacts on livelihoods has exacerbated the situation by eroding community coping capacities.

ZDAMWU says another repelling factor for young women in local mines is fear of sexual harassment.

“We have been receiving complaints of sexual harassment perpetrated against female workers. And by creating the department of Gender, we have created a platform for all women working in the mining sector to report those abuses. In Hwange district only one
percent of the employed workers are women and the abuse is so rampant,” said Mr Chinhema.

Greater Whange Residents Association Chairperson Mr Fidelis Chima acknowledges that Hwange has job opportunities considering the number of coal mining companies that are mushrooming in Hwange.

“If these companies are to pay reasonable salaries and improve working conditions, our young women will get opportunities,” noted Mr Chima. — The Citizen Bulletin

THE Zimbabwe Lawyers for Human Rights (ZLHR) has described the planned eviction of Kaseke villagers in Uzumba, Mashonaland East province, by a Chinese mining company as illegal.

Heijin Mining Company is pushing to evict hundreds of Kaseke villagers from their ancestral land, after it was allegedly given a special mining grant to extract black granite on land covering 300 hectares by the government.

ZLHR lawyer Tinashe Chinopfukutwa, on behalf of the villagers, wrote to Mashonaland East provincial mining commissioner and to the Environmental Management Agency (EMA) demanding clarification on the existence of a prospecting licence authorising the miner to conduct mining activities in the area.

“To that end, we kindly request if any prospecting licence was granted to Heijin Mining Company and if so, we kindly request for a copy thereof,” Chinopfukutwa said in the letter.

“In the event that a prospecting licence was granted to Heijin Mining Company, it is our considered view that the pegging of Kaseke village is unlawful for the following reasons. In terms of section 31 (1) of the Mines and Minerals Act, a holder of a prospecting licence shall not exercise any of the rights conferred in terms of the prospecting licence on communal land without the consent of the occupier.

“The pegging of Kaseke village without the consultation and consent of the occupiers is therefore unlawful. Further, in terms of section 31(1)(h) of the Mines and Minerals Act, no holder of a prospecting licence can proceed to peg communal land occupied as a village  without the written consent of the rural district council of the area concerned.”

The lawyer also claimed that the company could not conduct mineral prospecting or peg the village before approval by EMA.

Since the beginning of this year, hundreds of villagers in different parts of the country have been evicted, while others are yet to be displaced, to pave way for Chinese mining projects.

NewsDay

THERE is a need to urgently formalize the artisanal and small-scale mining (ASM) sector to create an environment that allows for the taxation of its players as well as facilitating their benefits from coordinated Government programmes.

This came under the spotlight during a Zimbabwe Miners Federation (ZMF) organised webinar for stakeholders, which was held under the topic: “Challenges involved in taxation of the ASM sector”.

The participants highlighted the importance of formalisation of the sector, which they said should play a key role to national economic development.

An estimated 40 000 ASM miners are believed to be formalised whilst about 1,5 million are said to be operating ‘illegally’ in Zimbabwe.

This is despite the fact that the small-scale mining sector is responsible of about 60 percent of gold deliveries to Fidelity Printers, contributing significantly to the country’s Gross Domestic Product.

Mining expert and University of Zimbabwe lecturer, Mr Motive Mungoni, said formalization of the ASM was beneficial to both the Government and the miners.

“Formalisation would not only improve the conditions of the sector on which millions of Africans have come to increasingly rely upon on their livelihoods but would also provide a platform for host governments to collect tax and other revenue, which the state is currently missing out on,” he said.

“An effective system of ASM taxation would be an appealing solution for both operators and the Government.

“Operators tend to mine informally because of the cost and bureaucracy involved but many would surely legalise as well as pay tax, if it meant gaining access to the wealth of the state and support schemes.”

The 2016 World Bank Doing Business Report observed that it takes 242 hours per year and 51 payments to comply with Zimbabwe’s tax laws and obligations and this resulted in high levels of noncompliance due to errors of omission and commission. The Government is reviewing these issues under its comprehensive ease of doing business drive.

“Facilitating the legalisation of the sector through the empowerment of its participants will require long term commitments from donors and policymakers to map its organisational structure, engage with its key operators and devise comprehensive policies, which
accurately reflect the realities on the ground,” said Mr Mungoni.

Mr Mukasiri Sibanda of Stop the Bleeding Campaign, however, said ASM miners were already paying taxes through purchase of fuel and other mining equipment.

“There are a lot of consultative taxes that the artisanal miners are already encountering. For example, most miners are off the grid and rely on fuel for their operations of which fuel is one of the heavily taxed commodities in Zimbabwe. They should be acknowledged for that,” he said.

“Let’s look at ways of motivating the miners to play developmental roles like assisting in construction of infrastructure like clinics, roads and schools within their communities.”

Mr Sibanda urged the Government to create a conducive environment for the miners by providing equipment. Parliamentary Portfolio Committee on Mines and Mining Development chairperson, Edmond Mukaratigwa, said:

“We are pushing hard that the ASM sector be formalised, be given means of production and that they are recognised”.

Informality makes it hard if not impossible to trace ASM’s funds as well as bringing them to benefit from Government schemes as most banks demand collateral, he said.

The legislator hoped the Mines and Minerals Amendment Bill would tackle these issues, including facilitating comprehensive exploration and equipping miners before extraction.

Zimbabwe Revenue Authority (Zimra) revenue manager, Mrs Valentine Murumbi, said formalisation was a must.

“The small-scale miners and the small-scale businesses form the back-borne of the economy contributing over 50 percent national forex in the past decade,” she said.

“Business in the SMEs, therefore, needs to be formalised.”

The Chronicle

Zimbabwe’s power utility has announced a drastic loadshedding schedule, due to breakdowns and refurbishments at its two main power plants.

Dam wall rehabilitation at Kariba will lead to 12-hour power generation cuts, at a time breakdowns at Hwange had already sharply cut output, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) said in a load-shedding schedule this weekend.

“The Zimbabwe Electricity Transmission and Distribution Company is experiencing a power shortfall due to generation constraints at Hwange Power Station, limited imports and a programme of dam wall rehabilitation at Kariba, which requires that two generators be taken out daily for 12 hours. The planned outage of the two units then restricts Kariba power station output during these hours,” ZETDC says.

“The power shortfall is being managed through load shedding in order to balance the power supply available and the connected load.”

Priority would go to major hospitals, water and sewer installations, national security establishments, oxygen producing plants and wheat farmers.

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This is the worst power crisis Zimbabwe has faced since 2019, when outages lasted up to 18 hours at a time, hurting the economy. That crisis was due mostly to Hwange breakdowns and two successive droughts that caused Kariba to cut hydropower generation by up to 70%.

Zimbabwe in 2019 agreed a power import deal with Eskom, but the terms are that the South African utility can only send electricity to Zimbabwe if there’s no shortage at home.

Lack of power investment

Zimbabwe’s lack of investment in power supply has left it vulnerable to damaging power cuts.

The Hwange thermal power plant is currently made up of six units which were commissioned in phases between 1983 and 1987, with capacity to generate 920MW (four units of 120MW each and two units generating 220MW each).

Mainly due to ageing equipment, the Hwange plant has not fired from all its installed plants for a while. Currently, only four units are in service, and when they do work, they generate less than a quarter of capacity.

On Sunday morning, Hwange was putting out just 343MW and Kariba 809MW, according to data from the Zimbabwe Power Company. Total output was 1196MW, which is less than peak demand of 1400MW.

To fix this diminishing capacity due to frequent breakdowns of its antiquated plants, the government is adding two new units, 7 and 8, at a cost of US$1,1 billion.

In terms of the schedule, the first of the two units had been expected to be commissioned in 2021, adding 300MW to the grid. The second unit is expected to add another 300MW to national supplies by January 2022.

However, the Zimbabwe Power Company says COVID-19 and payment delays have pushed the project off schedule.

In Kariba, an upgrade added 300MW to the 750MW hydro-electrical plant in 2018. But work by the Zambezi River Authority to repair the dam wall and the plunge pool has meant long shutdowns of generators.

The latest power crisis will dim Zimbabwe’s economic recovery prospects. Business groups, such as the CZI and the Chamber of Mines, had pinned hopes of 2021 recovery partly on the improved power generation that had been seen since 2020. Government had forecast the electricity sector to grow by 14% this year. 

Newzwire

Lafarge CEO Precious Nyika has left the company after the company was hit with a heavy Reserve Bank of Zimbabwe fine over exchange rate violations, industry sources say.

Lafarge chair Kumbirai Katsande, in a memo to staff seen by newZWire on Thursday, said Nyika had “championed capital projects and introduced new technologies in building”, but that she was leaving “to pursue interests outside the Holcim Group”.

While the company has not given reasons for Nyika’s departure, executives said the board took the decision after central bank imposed a fine of the equivalent of US$1 million under exchange control regulations.

“An audit raised several corporate compliance infractions that, together with the forex issues, led to the board this week deciding on her departure,” an official familiar with the matter said.

No immediate comment was available from Nyika. RBZ has not commented on the nature of Lafarge’s violations.

CFO Amr Elmowafy Ali Mowafy is interim Lafarge CEO.

Under Nyika, Lafarge has seen strong growth over the past year.

Lafarge grew cement sales by 23.7% between January and May, taking advantage of strong demand from growth in construction.

In April, Lafarge commissioned a new US$2.8m dry mortar plant, part of a US$25m expansion plan by the cement maker to take advantage of growing demand for building materials.

The new plant, supplied by Turkish company Varlik, will sharply increase output of dry mortar products – such as adhesives and agricultural lime – from just 7,000 tonnes per year to 100,000 tonnes annually, equal to national demand.

Lafarge also plans to use output from the new plant to launch 3D-printed low-cost housing, which would be a first for Zimbabwe.

A separate Vertical Cement Mill plant, part of Lafarge’s expansion plan, is under construction and expected to be complete in the first quarter of 2022. This plant will more than double Lafarge’s annual cement milling capacity from the current 450,000 tonnes to 1 million tonnes_Newzwire

Gold miner, Caledonia Mining Corporation, which owns and operates the Blanket mine in Gwanda has embarked on a dividend increase structure. This development comes as the company’s Blanket mine expansion project nears completion. 

Rudairo Mapuranga 

According to Caledonia Chief Executive Officer, Mr. Steve Curtis, Blanket mine has been operating extremely well, encouraging Caledonia to regularly increase and pay dividends every month. 

“So very cash generative, very good operation and that allows us Caledonia to be a regular dividend payer to our shareholders. We have recently embarked on a dividend increase structure as we get closer and closer to the project being completed.” Curtis said. 

Caledonia Mining Corp has been self-funding the growth and development of Blanket Mine with the mine production increasing to about 40 percent annually.  

“We have no debt; we are a very cash generative so we are able to be the master of our own destiny. We self-funded this whole US$70 million project out of our own resources but we are listed. If we do need access to market, we have got the support of financial market.  

“We have an internal growth potential of about 40 percent from were produced in 2020. We did 58 000 ounces and we are going to go up 80 000 ounces. We are a relatively low-cost producer for an underground mine,” he said.  

Caledonia’s financial performance led to it paying a total dividend of $0.12 apiece in April, while a further dividend at the increased rate of $0.13 apiece was paid in July. 

Caledonia is currently developing a new mine underneath Blanket Mine as it seeks to produce over 2 tonnes of gold annually. 

Gold deliveries to Fidelity Printers and Refiners (FPR) more than doubled to 2.94 tonnes in August from 1.27 tonnes reported in the same month last year amid rising confidence after authorities benchmarked prices to those offered on the international market.

FPR gold operations head, Mehluleli Dube, said the recently promulgated policies such scrapping of taxes on small scale miners have spurred on deliveries.

“This has seen August deliveries reaching 2.94 tonnes from 1.27 tonnes in August last year with total deliveries soaring 20% to 15.8 tonnes from 13.2 tonnes last year,” Dube said.

He said despite June having high figures, the overall gold deliveries were below those of 2020 with a first overall increase started to be recorded in July.

Experts said the country will surpass last year’s gold export receipts due to an increase in gold deliveries and firming international gold prices.

Those who deliver over 20 kilogrammes per month are given an extra 5% incentive and this has pushed volumes.

The introduction of incentives and timeous payments has reduced smuggling. Small scale miners delivered 1.91 tonnes in August 2021 and large miners delivered 1.03 tonnes in the period.

Zimbabwe Miners Federation chief executive Wellington Takavarasha said delivering to FPR was now more lucrative than all other buyers which has seen his constituency delivering the yellow metal through official channels.

The government has moved to provide equipment in gold centres to move towards helping the attainment of US$4bn gold export revenue.

The government wants to establish new gold centres following a sudden increase in output.

The gold centres are expected to provide basic equipment such as compressors and jackhammers as well as working capital to facilitate optimal production by small-scale miners who supply gold ore.

In August, the Cabinet approved proposals for the establishment of over 20 gold centres by mid-2022.

The investors will own 100% equity in the centres, while those who operate joint ventures with the Ministry of Mines and Mining Development will fully fund the operations of the centres in return for a 90% equity stake.

Some of the gold centres are expected to be established in Makaha, Odzi, Mount Darwin, Shamva, Mazowe and Silobela.

Business Times