Mining ZimbabweLatest Mining News, Policy and Industry Updates

After 70 years as the distributor of Caterpillar earthmoving equipment in Zimbabwe, Barzem, a unit of Zimplow, is exiting the relationship and looking for a new supplier.

Caterpillar, the world’s leading maker of construction and mining equipment, has been shifting strategy globally, including exiting from the coal and soft rock underground mining business to focus on other mining technology.

Barzem says the CAT relationship will end in September, at a time when it was seeing strong demand for equipment due to demand from government infrastructure and mine expansion projects.

“Barzem will exit the Caterpillar distributorship on 30 September 2022 given the changes in the strategic direction by both the supplier and Zimplow Group,” Zimplow says in its full-year financials for 2021.

The company says the Cat withdrawal will hurt business performance initially, but it believes it has enough capacity to deal with the change.

“One of the key strategic matters the group is currently seized with is the search for a new OEM (original equipment manufacturer) of earthmoving equipment to replace the Caterpillar brand at the end of the Distributorship Agreement on 30 September 2022.”

Barzem has seen good business from government and the mining industry. Volume sales of earthmoving equipment rose 84% last year, due to demand from government road projects and mines.

“On the other hand, the focus on production by major mining houses who use CAT surface mining and handling equipment resulted in increased fleet maintenance. Consequently, parts sales grew by 75% and hours sold by 65% against prior year performance,” Zimplow says.

This helped Barzem more than double revenue for the year.

Elsewhere in Zimplow’s business, Farmec sold 48% more tractors than in the previous year, but a poor rainfall season hit sales of other farm implements under the Mealie Brand unit.

Powermec, the alternative power division, had a mixed year. Because power supply was better than in the previous year, it sold 16% less diesel generators. However, it has gone into solar, and that unit grew sales by 167%.

Says Zimplow: “The trading environment has continued to pose both opportunities and threats.”

In 2021, John Deere announced it was expanding its construction equipment line-up to 18 countries, including to Zimbabwe.

Newzwire

HOUSES have been built for six of nine families set to be affected by Chinese owned Tsingshan Holding Group’s Manhidze iron and steel plant, as developments take shape.

The US$1 billion iron ore mine and carbon steel plant are set to be one of the largest in Africa, with production set to reach two million tonnes a year.

“The Manhize Iron Steel Project being undertaken by the Tsingshan group at Chirumanzu district has made massive progress. The plant is set to be the biggest in all of Southern Africa providing raw materials for our infrastructural work and forex from exports,” said information ministry permanent secretary Ndabaningi Mangwana.

“Six out of nine families who were immediately affected by the project have already been relocated to three bedroomed houses. They also have a separate rondavel (round) kitchen as well as two separate toilets and a bathroom.”

NewZimbabwe

SOUTHERN Africa-focused oil and gas exploration outfit, Invictus Energy has signed a binding well services contract with Baker Hughes for its drilling campaign in Muzarabani.

Baker Hughes is one of the world’s leading oilfield service providers, operating in more than 120 countries worldwide.

The two parties signed a letter of intent in February relating to Invictus’ upcoming two-well exploration campaign called Cabora Bassa.

Invictus’ drilling campaign is scheduled to commence at the end of July 2022.

Invictus managing director Scott Macmillan said the deal marked another significant milestone for the company as it prepared to embark on its maiden drilling campaign.

“The basis of well design has been completed and the well pad construction for the first well in the drilling sequence, Mukuyu-1, is progressing well. The Exalo 202 rig is expected to start its mobilisation in the coming days once it is released from Tanzania,” Macmillan said in an update to shareholders.

“We remain on track to spud the first well end of July, while we continue to make progress on selection of the second well location and expect to update shareholders in due course,” he said.

Last week, NewsDay Business reported that Exalo 202 had been stuck in Tanzania after authorities in that country delayed releasing requisite papers for its journey to Zimbabwe’s Zambezi Valley basin.

The drill, which is operated by Romania-headquartered Exalo drilling SA, was said to be undertaking a similar project in Tanzania.

Axalo was expected to make the journey from Tanzania to Zimbabwe this month, arriving in time to execute the assignment from July 1, according to statements by Invictus.

In an interview with NewsDay Business last week, Paul Chimbodza, whose firm, Geo Associates is a shareholder in the project, confirmed the delays, but said several parts of the plant had already arrived in Zimbabwe.

“There have been delays in Tanzania, they are working on the paperwork, but several parts of the equipment have already started arriving,” Chimbodza told NewsDay Business.

The firm said it was on course to kick start the Mukuyu-1 oil and gas drilling, after raising US$8,5 million through a private placement.

Newsday

MINING activities upstream of Sebakwe River are reportedly contaminating water, making it difficult for Kwekwe City Council to effectively purify it.

Sebakwe supplies Kwekwe and Redcliff towns and lately residents have been experiencing intermittent water shortages due to turbidity.

The local authority, instead of supplying citizens with unclean water, chooses to cut supply until the turbidity settles or when the water is safe for drinking.

Speaking during a full council meeting recently, Works Director Eng John Mhike said since the rains have subsided, the water remained with a lot of turbidity which requires more than normal chemicals to clean.

He said suspicion was that there were illegal miners upstream of Sebakwe who were contaminating the water.

illegal mining
“We are going to send a team to investigate what exactly is going on. But we strongly suspect that there are mining activities that are taking place and possibly contaminating the water,” said Eng Mhike.

He said the Environmental Management Agency (EMA) was conducting the investigations and would furnish the local authority with results. Meanwhile, last week, residents went for close to two days without water after the local authority stopped supply because council ran out of purification chemicals.

“Water chemicals namely aluminium sulphate ran out at the waterworks before arrival of the next consignment from Chemplex Marketing because of production challenges at their plant. The consignment is now on its way from Harare to Kwekwe. As a result, we stopped pumping water to the city at 4.30pm. We will resume production and pumping as soon as the chemicals arrive. Any inconvenience caused is sincerely regretted,” read communication
from council.

In another statement, the local authority said the continued erratic water supply was due to
poor raw water quality which is being abstracted from Dutchman’s pool for purification.

“The raw water that we are currently treating is very turbid with a high concentration of light sediments which are proving very difficult to settle during the water treatment process. In order to control the sludge levels during the water treatment and prevent choking of treatment process, we are being forced to operate intermittently with frequent start-stops,” read the statement.
Muddy water
The local authority has implemented a raft of measures including engaging Zinwa to flush
muddy water that has collected in the dam. Council is also procuring more treatment chemicals that can assist in managing the raw water situation.

“Other efforts are underway to bring a lasting solution to the current challenges and we are kindly appealing to all water users and consumers to use water responsibly until normal water supply is restored,” read the statement.

Kwekwe is one of the best water authorities in Zimbabwe with a reputation of uninterrupted water supply as long as there are no faults.

The Chronicle

The African Energy Chamber (AEC) spoke with Scott Macmillan, Managing Director of Invictus Energy, ahead of the continent’s premier energy event, African Energy Week (AEW) 2022, about the company’s operations on the continent, the challenges independent explorers are facing and the opportunities AEW 2022 provides for explorers such as Invictus.

AEC: What are Invictus Energy’s vision, mission and goals for 2022?

SM: We are currently planning our maiden drilling campaign in the Cabora Bassa Basin in Zimbabwe which is estimated to commence in July. We will be drilling two exploration wells: Mukuyu-1 and an additional well which is being matured for drilling at present. Our goal is to conclude our drilling campaign safely and make a basin opening discovery.

AEC: Please provide insight into the company’s recent projects in Africa. How do these projects contribute to Invictus’ 2022 and overall oil and gas market agenda in Africa?

SM: Our Cabora Bassa project in northern Zimbabwe is an exciting asset. It’s one of the last undrilled interior rift basins in Africa that has significant potential for finding hydrocarbons. Our Mukuyu prospect is world class and independently estimated to contain 8.2 trillion cubic feet and 247 million barrels of conventional gas-condensate. It is the largest undrilled prospect onshore Africa and will be one of the largest targets drilled globally in 2022.

Our vision is to become a regional energy supplier in southern Africa and success in our exploration campaign at one of the material prospects we are drilling will go a long way to fulfilling that goal and having a significant impact in the region. Energy independence and energy security are critical to helping end energy poverty in southern Africa.

AEC: What challenges are companies like Invictus Energy that are operating within Africa’s oil and gas market facing and how can they be addressed?

SM: The challenges for us from an operational perspective are mainly around availability of service providers and the mobilization and logistics hurdles to move equipment to the project. We experienced this during our seismic campaign last year which we executed during the height of COVID-19. It is something that our team has had to be very involved in to ensure that our drilling campaign kicks off on schedule and within budget. We have managed to rapidly progress a very frontier project from acquisition in 2018 to shooting a large 840 km infill seismic campaign in the second half of 2021, and now preparing to drill two wells within six months of completing the seismic survey. We’re very fortunate that we have a very experienced and dedicated local team and a supportive government who have gone out of their way to assist us.

The other challenge is overcoming the perception that whilst Africa has great geological potential, the fiscal terms and above ground environment have made it a difficult place to do business. This is certainly true for some jurisdictions, but others have recognised this and amended their terms to attract investment back into their countries. We are now seeing the change in terms bear fruit in places such as Ivory Coast and Namibia with the recent material discoveries.

AEC: What are the top three key trends that will shape Africa’s oil and gas market in the next three to five years?

SM: Firstly, African oil and gas is going to be in greater demand, particularly in Europe and Asia, because of the changing energy dynamics and desire to move away from dependence on Russia. This will help unlock stalled developments that have struggled to reach Final Investment Decision or secure anchor markets.

Secondly, fiscal competitiveness will determine whether Africa can capture further interest that will lead to exploration and development activity.

Thirdly, the increasing energy demands in Africa from a growing population as well as the industrialization of economies will require affordable and reliable sources of baseload power. Gas is going to play a hugely important role in that regard.

AEC: What are some of the opportunities companies like Invictus Energy can gain from participating at AEW 2022?

SM: The AEW conference will provide a fantastic platform to network with other E&P companies and government delegates from around the continent and provide us with access to new opportunities and partnerships that you can really only get from a meeting face to face.

AEC: What are some of the topics that you will be discussing at AEW 2022 in Cape Town?

SM: We will be discussing the results from our maiden drilling campaign as well as seeking new opportunities to grow our business beyond Zimbabwe.

worldoil.com

A series of investments into Zimbabwean lithium by foreign companies, led by mostly Chinese energy companies and UK explorers, has raised debate on value addition in the sector.

Huayou Cobalt bought Arcadia mine from Prospect Resources, while Sinomine has completed the acquisition of Bikita Minerals from German investor Wilfried Pabst’s Southern African Metals. UK mineral exploration companies Red Rock, Galileo and Premier African Minerals have also joined the queue.

Huayou has announced a plan to invest US$300 million to bring the plant to production and build a processing plant. That, the company says, will be the full extent of its value addition, for now.

Critics say Zimbabwe should force the companies to manufacture batteries locally. But these companies see little sense in these calls, wherever they have invested in minerals. They prefer making batteries closer to their markets, and in places where all the raw materials needed are available.

While Prospect had explored the feasibility of converting battery-grade lithium carbonate – the company had built a pilot plant and produced samples – Huayou says even this is not economic, at least not for another decade.

Huayou will not export raw ore, but will process it before export. However, it says the step beyond that, which is a converter for battery-grade lithium, is not economic. Zimbabwe has neither the required green energy nor the long laundry list of the needed raw materials to justify a concentrator here.

Below, we publish Huayou’s response to questions on the extent of its value addition plan:

__

The establishment of a converter for producing battery-grade lithium carbonate is not feasible for the following reasons:

First, the principal reason the production of battery-grade lithium carbonate is not feasible is based on the lack of supporting and auxiliary materials for battery-grade lithium carbonate production.

For each tonne of battery-grade lithium carbonate production, it needs 2,800 kWh of green (renewable) power, 500-600 cubic metres of natural gas, 2.2 tones of concentrated sulfuric acid (98.5%), two tonnes of first-class sodium carbonate, 20kg of first-class sodium hydroxide, four tonnes of heavy calcium powder, and 1.6 tonnes of food-grade carbon dioxide.

There is a chronic shortage of these supporting and auxiliary materials in Africa, and the costs incurred by importation would be huge and unaffordable. It is worth noting that processing enterprises will be uncompetitive in a global market without cost-competitive inputs, raw materials, gas and power, and first-class sodium carbonate.

The second reason is in respect of the development and economic analysis on the extension of the lithium value chain. It is well understood that the first five-year plan (NDS1) of the national development strategy formulated by the Zimbabwean government sets out macro-objectives to enhance and advance the value-added and efficiency of the mining industry.

The extension of the lithium value chain, however, is a gradual process, which requires the relevant enabling industrial environment, infrastructure, raw materials, and technical competence to be present to create the competitive position of the lithium value chain.

Therefore, based on our comprehensive analysis, we believe there is a certain possibility in practice to establish a converter to produce lithium sulphate from the lithium concentrate within ten years from the date of commencement of commercial production of lithium concentrate under Arcadia Project.

This is subject to the availability of sufficient green (renewable) power, natural gas, sulphuric acid and heavy calcium powder in Zimbabwe, and subject to the economic feasibility of production of lithium sulphate under Arcadia Project.

The construction of a lithium carbonate/battery-grade (99.5%) production plant under Arcadia Project is economically and technically not feasible and impractical in the circumstances.

Newzwire

Kibo Energy, the UK renewables developer, says it has dropped its interest to acquire the 100MW  Victoria Falls solar park, citing incomplete information from the project’s current owners.

The company had said in March that it had agreed to buy the project from Broomfield International Limited for US$12.6 million. Now Kibo says due diligence on the project shows it does not meet its requirements.

Kibo found that certain sections of the project still needed further development over a short period of time. In other instances, the company says, Broomfield did not provide enough information about the project.

“If transactions do not meet our information or returns requirements, it is not appropriate to proceed,” said Kibo chief executive Louis Coetzee. “This transaction, following our due diligence process which included satisfying the board on the documentation required for the regulatory re-admission and subsequent revised economics, ultimately did not meet our acquisition criteria.”

Under the proposed deal, Kibo would have bought 100% of the project, which has started construction of a 100MW plant near Victoria Falls. The first 25 MW of the project is fully funded and under construction. The first 5MW of that 25MW was expected to have been in production by April.

In 2020, government invited bids for the installation of 500MW of solar power plants, hoping a shift to renewable energy will help ease crippling power cuts. But investment into Zimbabwean solar has been slowed by investor doubts that they will be paid in US dollars for supplying power.

The Victoria Falls project, however, attracted Kibo because it has a 10-year, USD-denominated power
purchase agreements with mining and industrial customers.

In its shift from coal to renewables, Kibo’s acquisition strategy has been to target projects that are near production; its renewable energy assets all have a time horizon of less than 18 months to first production.

Newzwire

Kuvimba Mining House says it plans to list two more units on the Victoria Falls Stock Exchange and is exploring lithium at Sandawana, once an emerald mine.

Kuvimba is majority-owned by government and holds assets such as Bindura Nickel Company (BNC) and Freda Rebecca Mine, the country’s biggest gold mine. Kuvimba also controversially holds former state-owned assets, among them Sandawana, and mining companies bought by Sotic International, a company linked to businessman Kuda Tagwirei.

BNC was listed in December last year on the VFEX, a USD-based stock market where listed firms are allowed to keep a bigger portion of their incremental export earnings.

“We also have major plans to list at least two more major companies within the next 18 months. Given the confidential nature of various regulatory processes involved in listing companies, all I can say for now is watch this space,” Chinyemba told Mining Zimbabwe.

Kuvimba produced 115,136 ounces last year from its gold mines. Among its mines are Freda Rebecca and Shamva, bought from Mzi Khumalo’s Metallon in 2020.

Lithium bandwagon

But Kuvimba is now looking beyond gold. Among the assets that Kuvimba took over from the state-owned ZMDC is Sandawana, once one of the world’s biggest emerald mines. The company shut down in 2011 after losing key foreign markets. Kuvimba has been exploring lithium there, Chinyemba says.

“Indeed, we are currently exploring one of our resources where current indications are that we have a very large lithium resource at Sandawana,” he says.

If Kuvimba finds enough lithium there to justify mining, it would be the first local company to join a queue of foreign firms seeking a slice of Zimbabwe’s lithium potential. According to Chinyemba, the strong foreign interest in Zimbabwean lithium is not unexpected, given the capital needed.

“Our timeline is beyond generations and therefore we acknowledge the lack of capital in our country,” he says. “In that regard, we welcome the interest in Zimbabwe lithium from foreign companies and view it as good for the economic development of our country.”

Kuvimba also holds a 47.8% stake in Great Dyke Investments, which is developing what will be the country’s biggest platinum mine in Darwendale. The project has been delayed by funding, according to reports. Chinyemba says the strategy for the project has had to change.

“The original project was modelled on the possibility of underground mining,” he says.  “After further exploration and analysis common to projects such as this, it is now believed that the orebody may be more amenable to an open-pit project. GDI is thus remodelling the whole Darwendale project in order to take this into account.”

Newzwire

LAFARGE Cement Zimbabwe Limited (LACZ) has hailed the sustained spirit of dialogue and engagement between government and industry as a measure to find each other in economic progress.

Presenting a trading update for the first quarter, LACZ said such an engagement atmosphere marked by sustained dialogue will impact positively on the economy.

Ndugwa said during the period, the economic environment benefited from relatively lower inflation which however deteriorated towards the end of the quarter.

The company forecast to double cement output in the second quarter of 2022 following a recent machinery plant machinery upgrade.

“One of the existing cement ball mills was decommissioned to make way for the installation of the new Vertical Roller Mill (VRM) that will double the company’s capacity after commissioning in Q2,” he said.

The company expressed confidence that volumes will recover and grow as the availability of cement stabilises, especially after the new VRM start-up in Q2.

“The overall market demand continues to grow driven by the segment of individual home builders as well as the ongoing major government infrastructure development projects.

“Despite the adverse impact of the cement mill house roof collapse on cement volumes, the company’s historic revenue grew by 36% versus the same period last year and declined by 18% on inflation adjusted performance,” he said.

The company also sustained the highest standards of health and safety through a robust framework of policies and programmes which are tailored to achieve zero harm in its operations.

NewZimbabwe