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SEVERAL arms of Government in the Midlands Province say they are ready to smoothen the way for the birth of the US$1 billion Mvuma steel plant expected to be commissioned next year.

Set to be Africa’s biggest steel plant, the project will employ over 6 000 people.

The ground-breaking ceremony, undertaken by a local subsidiary of Chinese global steelmaker, Tsingshan Holdings, is expected to be presided over by President Mnangagwa in two months’ time, while the Chinese firm’s top brass will fly-in for the occasion.

Early this week, Government agencies in the province — led by the Midlands Minister of State for Provincial Affairs and Devolution Mr Larry Mavima — convened for a consultative meeting at the project site to discuss implementation modalities.

Stakeholders — including the ministries of Industry and Commerce; Lands, Agriculture, Fisheries, Water and Rural Resettlement and Transport and Infrastructure Development — said the steel plant — expected to be a boon for infrastructure development, job creation
and economic development of the provincial and national economies — meant lots of work in months ahead.

“We want to ensure a smooth takeoff of the project and every department that has something to do with this project has to play its part,” Minister Mavima told the meeting.

“We don’t want the investor to be denied any service they need when the Government and His Excellency, the President have approved the creation of this project. Let us ensure that it is implemented within the time frame agreed by Government,” Minister Mavima said.

He said some grand projects had failed in the past because of “falling into that trap of not following relevant procedures.”
Minister Mavima told the stakeholders:

“We don’t want anyone who will say, ‘I was not consulted.’ We will remove all landmines that you might encounter because this project will not only help the local community but also the GDP of the province and at national level. This project is being incorporated into our provincial economic plan for the next five years, which is similar to the Government’s National Development Strategy 1 blueprint.”

In addition to sprawling infrastructure development, the project will employ 6 000 people directly and make a town of its own that will be bigger than Redcliff — which served the former steel giant Zisco — in its heyday.

A dam over Munyati River, a new bridge, a tarred road, a 40-kilometre rail link to Gweru and an electricity substation are some of the substructures to accompany the plant.

Stakeholders also agreed that the development would cause environmental impact, and officials from the Environmental Management Authority (EMA) clarified various procedures required to ensure certification for safety and environmental standards.

The investors have also clarified that there will be no relocation of villagers.

A company representative told The Sunday Mail: “From an investor perspective, we are overwhelmed by the efficiency of the province: it is unbelievable. We could not reach this stage without the help of various Government departments.”

Zimbabwe, a mineral rich country in Southern Africa where recent exploration activities have led to strong indications of potential significant oil and gas prospects will showcase its hydrocarbons potential to investors at Africa Energy Week in Cape Town in November this year.

The Southern African country — bordering Mozambique to the east, Zambia to the north and South Africa to the south — has no proven hydrocarbon reserves yet, instead deriving its energy primarily from hydro-power and coal, along with petroleum imports from
neighbouring countries.

However, with the promise of potential prospects in the Muzarabani Basin — which borders Zimbabwe and Mozambique — the country is sitting on the verge of a hydrocarbon boom, set to be unlocked through foreign capital, technology and expertise.

As Zimbabwe prioritises the expansion of its energy sector and invites global stakeholders to explore its uncharted territory, African Energy Week (AEW) 2021 from November 9 to 12 in Cape Town, where the country will showcase its abundant mineral wealth and investment potential, will serve as the official platform for the country to exhibit its potential to spective investors.

In a bid to establish a domestic hydrocarbon industry and achieve energy independence, Zimbabwe has recently focused its efforts on exploration, with Australian-based Invictus Energy Limited leading the way.

In 2018, Invictus signed a petroleum exploration development and production agreement with the Government of Zimbabwe to explore for commercial deposits in the Muzarabani prospect.

The company has since revealed significant hydrocarbon potential located in the prospect, leading to a planned 2D seismic survey campaign and the drilling of the first oil/gas test well in October/November 2021.

If successful, confirmed hydrocarbon deposits will not only lead to enhanced energy independence by reducing petroleum imports, but also drive gas-to-power projects that could power the country’s mining sector and industrialisation. In other words, the
Muzarabani Basin has the potential to catapult Zimbabwe into both an energy and industrial hub.

Additionally, the potentially hydrocarbon-rich Muzarabani Basin could justify other commercially viable deposits in other basins across the country.

In total, Zimbabwe has six sedimentary basins —Kariba Basin, Tuli Basin, Mozambique Basin, Okavango Basin, Zambezi Basin and Nama Kalahari Basin — which hold the right geological address for hydrocarbons, thereby warranting further exploration.

This has created attractive opportunities for global explorers and upstream stakeholders looking to cash in on one of Africa’s final frontiers. As Zimbabwe seeks to develop its burgeoning oil and gas sector, AEW 2021 recognises the significant potential that Zimbabwe holds, and will present the country and its investment opportunities to both regional and global stakeholders at Africa’s premier energy event.

By uniting financiers and oil and gas explorers with Zimbabwean partners, AEW 2021 will facilitate the critical investment deals necessary for the country to realise its oil and gas objectives.

In addition to oil and gas opportunities, Zimbabwe may be the solution to and a key driver of Africa’s energy transition, boasting significant mineral deposits that serve as key inputs into clean energy technologies. The country’s mining industry, which focuses on gold, asbestos, chromite, coal, platinum and diamonds, is made up of a diverse range of small- to medium-sized operations and contributes eight percent towards the country’s gross domestic product.

However, it is the country’s lithium potential that could drive international investors into the country and propel Africa’s energy transition.

According to the International Trade Administration, Zimbabwe has the largest lithium deposits in Africa and one of the top ten reserves globally, with the country’s largest mine — the Bikita mine — holding approximately 12,8 million tons of lithium ore with a lithium content of 1,4 percent, or 150 000 tons.

With the recent rebound in the lithium market — in part attributed to increasing demand for lithium-ion batteries associated with green power for utilities and car production —Zimbabwe is on the precipice of a mining sector revolution.

By showcasing the country’s potential and positioning Zimbabwe at the forefront of Africa’s energy transition, AEW 2021 will unite investors with on the ground opportunities in one of Africa’s most sought-after markets.

Accordingly, AEW 2021 will drive a productive discussion on Zimbabwe and its oil, gas, and lithium resource potential, as well as facilitate the critical deals necessary for the country to realise its long-term development objectives.

Business Weekly

THE investor behind the US$1 billion new steel plant to be located in Mvuma, Midlands province, has applauded the Government for creating a conducive investment climate which has enabled their business to take off.

Mr Benson Xu, the managing director of Dinson Iron & Steel Company, which is a subsidiary of the Chinese global steelmaker, Tsingshan Holdings, said Government had created an investor friendly environment which will see many investors flocking to the country.

He said this during an inter-agency Government consultative meeting held at the factory site, which was convened by the Midlands Provincial Affairs and Devolution Minister Larry Mavima.

The meeting was part of preparations for the groundbreaking ceremony set to be led by President Mnangagwa within two months. The commissioning of the plant is set for December 2022.

The US$1 billion investment project would have an annual turnover of US$1,5 billion.

Mr Xu said various Government departments had facilitated smooth commencement of the massive project that will change the industrial landscape of the Midlands province and the entire country.

“We could not reach this stage without the help of various Government departments and this big plant will definitely unlock the economic potential not only of this province but the entire country,” said Mr Xu.

He said as an investor he was very impressed by they way Government officials especially from the Midlands province handled their case.

Mr Xu explained that the proposed steel plant, believed to be Zimbabwe’s biggest, was part of a chain of investments that President Mnangagwa successfully negotiated during his visit to China in 2018.

The Government subsequently signed a Memorandum of Understanding with the company for local projects. Already, other legs of the investments are at different stages of implementation.

They include the biggest ferrochrome project located at Selous and a coke oven battery in Hwange, which is also Zimbabwe’s biggest and most modern facility.

The steel plant at Mvuma will complete the value chain to produce steel, with massive spinoffs for upstream and downstream industries.

It will also be a boom for employment, with an estimated 6 000 direct jobs being created while a new township — three times bigger than the Redcliff town of heyday — has been planned.

Other infrastructural elements to form part of the matrix include a new dam, bridges and a tarred road. Minister Mavima said the investment fits well into the provincial and national development agenda, advancing the work that had been done by the President when he met the investors in China.

He said it was incumbent upon all civil servants to ensure the successful implementation of all development projects.

Heads of various Government departments and ministries attended the meeting and explained how they would be impacted by the investment.

They pledged to facilitate processes to ensure its successful implementation.

Chief Chirumhanzu welcomed the multimillion-dollar investment in his area and commended the Second Republic under the leadership of President Mnangagwa for creating an attractive investment climate.

The Chronicle

THE Zimbabwe Environment Law Association (ZELA) says plans by the Government to unbundle Fidelity Printers and Refiners (FPR) has potential to improve local beneficiation and investments in the gold sector.

FPR is in the process of being unbundled into two business entities, namely gold refining under Fidelity Gold Refinery and printing and minting under the Printing and Mining Company of Zimbabwe (PMCZ).

“Furthermore, by allowing private companies to be part of the gold refinery process, the country stands a good chance to comply with the London Bullion Market Association (LBMA),” Zela said in a statement.

In terms of the unbundling structure, the RBZ will retain 40 percent shareholding in Fidelity and dispose of 60 percent shareholding to both the large scale and small-scale gold producers, based on the volumes of each individual’s deliveries.

Cumulatively, 50 percent of the shareholding will be offered to primary gold producers while three percent will be offered to main FPR gold buying agents and the balance of seven percent to small scale producers through their representative bodies such as the Gold Producers Association and the Zimbabwe Miners Federation (ZMF).

While presenting the Mid Term Budget Review last month, Finance Minister Professor Mthuli Ncube said the government was moving ahead with its plans to cede its controlling stake in FPR.

Zela’s works cuts across different environmental sectors such as mining, forest management, wildlife management services and urban agriculture, among others. The country lost its LBMA membership in 2008 after it failed to meet the prerequisite gold
production levels and for it to be re-admitted into the LBMA, it needs to be producing 10 tonnes of gold per year.

“Basing on FPR’s gold production and deliveries for the past few years, it is now very easy for the country to re-join the LBMA. The Government should be persuaded to get readmitted into the LBMA as this will attract international investments,” Zela said.

It added that officially, FPR sells its gold to international markets mainly through South Africa and Dubai refineries.

However, Zela noted that the value Zimbabwe gets from selling its gold to Rand Refineries in South Africa is lower than the value that it would get if the gold export stocks were to be sold directly to LBMA and one of the major reasons is that these refiners charge for the refinery process which they do on the country’s gold exports.

Zimbabwe is targeting to produce 100 tonnes of gold per year by 2023, which is part of a drive to achieve a US$12 billion mining industry by that time.

Of the US$12 billion, gold, platinum diamonds will contribute US$4 billion, US$3 billion and US$1 billion respectively. Chrome, iron ore and carbon steel will contribute US$$1 billion while coal and hydrocarbons will contribute the same. Lithium at US$500 000 while other minerals will constitute US$1,5 billion.

Zela also indicated that the Government should also consider making it mandatory for all shareholders who are going to take up equity in FPR to list on the Zimbabwe Stock Exchange (ZSE) or the Victoria Falls Stock Exchange (VFS).

It said this will open a window for citizens to hold the companies to account on mineral revenue transparency since companies will be expected to publicly disclose their Environmental, Social and Governance (ESG) information in line with international best practices.

Business weekly

Zimbabwe’s sole gold buyer, Fidelity Printers and Refiners (FPR) is cautious of reaching 27 tonnes of gold output this year due to the late interventions by the monetary authorities.

But in June and July gold deliveries averaged above 2.8 tonnes, giving a glimpse of hope on the country’s gold export receipts.

A Fidelity official who preferred anonymity told Business Times that the country could near the 27-tonne mark by the year-end.

“Judging from the current trend, we hope to reach 26.7 tonnes by the end of 2021.

We have so far received 12.7 tonnes during the first seven months and we hope to receive 14 tonnes during the last five months,” the official said.

FPR gold operations head Mehluleli Dube told this publication that this year’s gold deliveries are difficult to project due to the different tales of gold deliveries between the January to May period and June to July.

“We are yet to discuss the final figure but I don’t think we will surpass the 28 tonnes achieved due to the difficult period that we experienced from January to May.

I can’t really tell where we would be by year-end as gold deliveries were extremely down during the first five months but during the past two months, the situation has improved significantly,” Dube said.

Monetary authorities are urging gold miners to increase production in an effort to get high returns from the prevailing international gold prices.

The country’s gold exports receipts shot 132% to US$184.2m in July 2021   from US$79.3m in the same period last year.

Overall, gold export receipts rose 42% to US$648.4m for the seven months from US$457.2m due to the 5% incentive, scrapping of taxes on small scale miners and timeous payment in line with the international gold prices.

Smugglers were estimated to be shipping out about 2.5 tonnes every month.

The small-scale miners are delivering above 400 kg weekly and more is expected, according to experts.

Resultantly, the June 2021 gold deliveries clocked 2.92 tonnes against 1.4 tonnes same period last year due to a reviewed Fidelity’s buying price of gold for the artisanal miners and small scale miners.

Small scale miners managed to deliver around 1.7 tonnes against large scale miners’ 1.1 tonnes.

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

In May gold deliveries fell 5% to 1.38 tonnes in April 2021 from 1.46 tonnes recorded during the same period last year with the positive output only recorded in March where deliveries improved 2% to reach 1.80 tonnes from 1.77 tonnes.

With the recent surge in production, mining experts are projecting a huge recovery during the second half of the year.

With all miners paid to date and payment at the prevailing international gold prices, a major surge in deliveries is expected.

The gold output plummeted 31% to record 19.052 tonnes during 2020 from 27.66tonnes recorded during 2019 due to Covid-19 effects, delay in payments and low foreign currency retention levels.

In an intelligence mining report last year, President Emmerson Mnangagwa’s government was advised to pay gold producers at world prices to woo them into selling the yellow metal through the formal channels.

The report blamed FPR’s flawed centralised gold buying scheme and called for the law to bring complicit powerful politicians to book as they are believed to be sponsors of machete gangs’ violence in the Midlands Province and Mazowe in Mashonaland Central Province.

In reaching 100 tonnes by 2023, Dube said it is a toll order for the country to reach a centurion due to lack of capital investment and informalisation of the sector.

Business Times