Mining ZimbabweLatest Mining News, Policy and Industry Updates

SOUTH African President Cyril Ramaphosa has been dragged into the on-going fight between government and the Friends of SMM Holdings (Pvt) Ltd (FOSMM) over the hostile takeover of the asbestos mine in 2005.

Government placed SMM Holdings under judicial management through the Reconstruction of State-Indebted Insolvent Companies Act in 2005.

The Reconstruction of State-Indebted Insolvent Companies Act was acceded to by the late former President Robert Mugabe to reportedly protect SMM, formerly owned by Zimbabwean businessman Mutumwa Mawere, against legal action and attachment of the company’s property by local and foreign debtors.

SMM administrator Arafas Gwaradzimba then approached South African, Zambian and United Kingdom courts in a bid to recoup SMM monies allegedly siphoned into the neighbouring countries by SMM directors, in particular Mawere.

The matter spilled into South African courts and FOSMM dragged Ramaphosa to the High Court last year challenging the extra-territorial application of the law in South African courts.

In response, Ramaphosa allegedly refused to sign his answering affidavit to the application, preferring that the South Africa principal State law advisor Godfrey Mphaphuli, who is a legal advisor in his office, acts on his behalf on the matter.

In his answering affidavit on February 1 this year, Ramaphosa confirmed authorising Mphaphuli to depose the answering affidavit in September last year.

In his letter to Ramaphosa dated February 7, 2022, Tawanda Mupasiri, the FOSSM public policy director, said: “I have taken time to familiarise myself with all South Africa litigations and inescapable conclusion is that absent the complicity of the South African judiciary … The reason I am writing this letter is that the stance you have taken in relation to the FOSMM application when properly construed has the effect of undermining the rule of law in Zimbabwe by fortifying the position that a law like the Reconstruction of State-Indebted Companies Act can be recognised and enforced as law, at all.”

Mupasiri has also dragged President Emmerson Mnangagwa to the Zimbabwean High Court challenging government’s appointment of Gwaradzimba as SMM Holdings administrator.

“You may not be aware that my application under section 167(2(d) and section 167(3) of the Constitution of Zimbabwe is a quest to make President Mnangagwa accountable for his refusal and wilful failure to act following my letter of November 9, 2021 bringing to his attention the serious and scandalous allegations made against him by his confidante and lawyer, Mr (Edwin) Manikai.”

“Notwithstanding the damning allegations, that President Mnangagwa was the key driver of the project to divest and deprive a South Africa citizen of Zimbabwean heritage, Mawere, of his property in South Africa using false information, Mnangagwa has engaged Mr Manikai’s law firm, DMH Attorneys, as his legal advisers.

“It is worth highlighting that Mr Manikai has opposed my application although I do not seek any relief against, but included him in the matter solely to allow to assist the court with evidence of his state of knowledge of how the idea to use public power to undermine the rule of law was conceived and prosecuted with impunity, not only in Zimbabwe, but in South Africa, Zambia and the United Kingdom.”

Mupasiri challenged Ramaphosa to address whether the reconstruction and enforcement of the Reconstruction Laws in South Africa was consistent with the promise entrenched in its Constitution.

In October last year, FOSMM authorised Janice Jody Greaver to take legal action against Ramaphosa compelling him to rectify the breach of the South African Constitution, the Cross Border Insolvency Act, Sadc Protocol and Treaty and international law for allowing Gwaradzimba to represent SMM in South African litigation.

FOSMM trustees argue that Gwaradzimba had failed to obtain the leave of the court, in recognising and enforcing the law that offends public policy.

The organisation also dragged Ramaphosa to the High Court in Johannesburg over his appointment of Mphaphuli to respond to its application.

Mupasiri’s letter comes shortly after South African businessman, Cleopas Sanangura, petitioned the courts seeking reprieve over adverse rulings made against SMM in the South African legal jurisdiction.

Newsday

Over 200 Redwing Mine workers yesterday marched against judicial management attempts to reinstate Betterbrands Mining Company (BMC) under unclear circumstances.

In an unprecedented move, workers said they prefer Metallon Gold while resisting efforts by the Interim Corporate Rescue Practitioner (ICRP) Knowledge Hofisi to re-impose opaque BMC mining operations at Redwing.

In a fiery exchange with Hofisi at the premises yesterday, workers flatly told the ICRP that a tributary agreement was contrary to the standing resolution to remove Redwing Mine from the corporate rescue plan in September 2021.

Redwing workers’ legal advisor Reynos Gumbo is also in the eye of the storm, for allegedly handpicking a committee, led by Peter Zheke, which agreed to secretly grant exclusive rights to Betterbrands.

Inside sources revealed that Betterbrands legal advisor Allan Masiya, chaired the clandestine meeting on 13 January 2022, where the resolution to reinstate suspended tributary agreements were made with a compromised workers committee.

“The committee resolved that Redwing operations would commence immediately upon the handling of the mining claim and those operations would not be hindered or interrupted as a way of giving Betterbrands comfort and security for its investment,” reads part of the amended agreement.

Inside sources at the mine revealed that workers have petitioned the Supreme court to disengage from corporate rescue, whose judgment was reserved on 31 January 2022, with suspicions over the court outcome.

“Creditors agreed to cancel tributary agreements, while remaining under judicial management, and hunt for new investors. Surprisingly, we have seen the return of this dubious investor that we voted against.

“Workers are not aware of the new terms of the amended agreements with Betterbrands, which also elbowed out local partners like Prime Royal that we worked with before.

“Our fears are that the courts could be compromised because already our own legal advisor is supping with Betterbrands and the ICRP is not listening to our pleas,” said a worker who requested anonymity.

Hofisi is accused of failing to facilitate the fulfilment of an agreed dispute settlement structure where a formal investor would partner a consortium of local firms Prime Royal, Betterbrands and Properdeck.

Efforts to get a comment from ICPR, Hofisi proved fruitless at the time of going to press.

The workers, represented by the Associated Mine Workers Union (AMWU) are pressing for the implementation of the resolution to move out of judicial management, with a petition of the same submitted to the Ministry of Labour.

Initially a tributary agreement was signed between Prime Royal and Redwing mine in 2018, to empower local youths, before operations were stopped for failure to produce an Environmental Impact Assessment (EIA).

Betterbrands, took over operations until November 2021 when the tributary mining operations were halted in the wake of an exposé by Centre for Research and Development (CRD) of ongoing chaotic mining operations.

Further, a general creditors resolution passed on 9 September 2021, also voted for rescission of post commencement agreements in line with Section 144(2) of the Insolvency Act.

Civic society organisation monitoring natural resources governance say the political syndicates are circumventing the resolutions through court processes, and even forced through amendments to the initial 6 year tributary agreement.

Centre for Research and Development (CRD) , a local natural resource governance organization, has unearthed unsustainable mining operations, environmental damage and social impact in Penhalonga.

James Mupfumi, CRD director, commenting on the current fracas said the government is missing an opportunity to nip unsustainable mining operations and curb illicit trade of gold.

“What is obtaining at Redwing is the subversion of institutions meant to safeguard the rights of workers and community by politically driven cartels of mineral looters.

“Operations of gold barons at Redwing have proved beyond doubt that they are a worst case of tax evasion, mineral smuggling and human rights abuse.

“It should be in the government’s interest to allow for responsible investors with the capacity to rejuvenate production at the mine,” said Mupfumi.

263chat

MINES minister Winston Chitando has been accused of grabbing eight gold mining claims belonging to businessman Yakub Ibrahim Mahomed and re-issuing them under a special grant to Golden Reef Mining (Pvt) Ltd, where he is a director.

Mohamed, who owns Anesu Gold (Pvt) Ltd, filed a High Court application seeking to interdict Chitando, Mines secretary Onesimo Moyo, Golden Reef Mining, and Midlands provincial mining director Tariro Ndhlovu from grabbing the mining claims.

Mohamed claims that Anesu Gold is the registered owner of the gold claims in Mberengwa district, Midlands province, which are also referred to as Mangoro claims (Ipanema).

The matter was set for hearing yesterday, but High Court judge Justice Rogers Manyangadze postponed it to February 24 at the request of Chitando’s lawyer, Takudzwa Mutomba who indicated that the minister, together with Moyo and Ndhlovu had secured the services of a new lawyer, Lovemore Madhuku who was tied up elsewhere.

Welshman Ncube is representing Golden Reef Mining while Advocate Tawanda Zhuwarara is representing Anesu Gold.

In his application, Mohamed said the mining claims were previously owned by, and registered in the name of Start Mining Services (Private) Limited, where he initially had a 70% stake with the other 30% owned by Rugare Gumbo.

Mohamed said he later bought out Gumbo and now owns 100% shareholding of the claims.

It is alleged that in 2018, Chitando sent invoices for Start Mining Services to pay mining fees for the claims.

Fidelity Printers approved that US$6,4 million must be paid to finance the applicant’s operations, including the payment of the inspection fees for the mining claims.

“This arrangement had the approval of the governor of the Reserve Bank and the permanent secretary of the Ministry of Finance and Economic Development. Fidelity gave the facility on the strength of clean and unencumbered mining claims following a due diligence process,” Mohamed’s court affidavit read.

He said the certificates of registration of the mining claims were handed over to Fidelity in February 2019 followed by a due diligence exercise.

However, he said he was shocked to learn that a special grant had been issued, and his claims forfeited.

Mohamed also alleged that in 2012, Gumbo approached Chitando, before he became Mines minister, asking him to invest in the mining claims but Chitando refused.

Around 2014, Mohamed then invited prominent businessman Shingi Mutasa to invest and he showed interest, but insisted that due diligence checks be done.

Mutasa and Chitando chartered a small plane and flew to inspect the mining claims in loco. After the checks, Mutasa allegedly did not take up the offer.

“Although Mutasa did not come on board, Chitando’s team and himself, had all the data and information of the juicy areas of the mining claims,” Mohamed submitted.

He said Anesu Gold secured an investor from Australia who agreed to form a joint venture, after the investor was assured by Chitando and Ndhlovu that the mining claims were clean and unencumbered.

“It would be the investment’s saddest day if this country is to send an investor back to Australia under these circumstances. This should not be allowed if transparency is to be the order of the day.”

Mohamed said Chitando was a director of Golden Reef  and shareholder through his company Windev Investments (Pvt) Limited, adding that the decision to forfeit the mining claims was “wrongful, unlawful, malicious, illegal” and motivated by greed.

But Gold Reef argued that Mohamed and Anesu Gold had no legal right to bring the case before the courts.

“The invoices for payment of inspection fees were issued to Start Mining Services and not applicant. Forfeiture made reference to Start Mining Services as the holder of the mining claims being forfeited,” Gold Reef director, Thomas Gono said.

“Accordingly, hence it is submitted that if any of the mining claims belong to applicant, no lawful and accurate procedure, as prescribed by law, was followed to change names on certificates of registration after transfer. Equally the fact that Minister Winston Chitando’s company Windev Investments is a shareholder in first respondent has no material bearing on how applicant lost mining rights over mining claims in question.”

Gono said there was nothing illegal about Chitando being a director or shareholder in a certain company, adding that the mining claims in question were forfeited two months before inspection fees were paid, meaning that the applicant had defaulted.

In his opposing affidavit, Ndhlovu said Anesu Gold was invoiced for payment of already overdue inspection fees, adding that the mining claims were forfeited in terms of section 260 of the Mines Act.

Newsday

CEMENT manufacturing company PPC Zimbabwe has invested US$37million towards a 30 mega watts solar project as it seeks to mitigate power challenges that have been hampering production.

The company operates a clinker plant in Gwanda District at Colleen Bawn where 20 mega watts of solar powered electricity is set to be installed while Cement Siding which is the milling plant situated on the outskirts of Bulawayo is set to be installed with 10 mega watts of solar generated power.

With the country’s national grid falling short of electricity supply coupled with vandalism such as theft of cables, power outrages have affected production in a number of sectors including mining and manufacturing.

The installation of the solar system come not only as a mitigatory measure but the system is rapidly becoming a mainstream alternative energy source in the world.

Solar energy comes with a number of advantages that include less service disruption, reduced electricity bills, increase in value of energy-efficiency, renewable energy, reduced carbon emission as well as low maintenance costs amongst other advantages.

PPC Zimbabwe managing director Mr Kelibone Masiyane told Sunday Business last week at the company’ Cement Siding plant, that the project was part of the company’s efforts to scale up production.

“Next month we will have a ground breaking ceremony to set up a solar plant in our Collen Bawn plant. We are talking about a 20 mega watts solar plant. Here in Bulawayo we will set up a 10 mega watts plant. So these are efforts coming from our side in terms of complementing Government efforts. We have a lot of power challenges.

As we speak, this plant was down for the last four days due to power cuts. So what we are doing is to try and complement what government has been doing,” he said.

The development will not only scale up production but will come in handy for the nation as surplus energy will be fed into the national grid.

“We have injected US$37m towards the project. Our plant in Colleen Bawn uses only 13MW while the one in Bulawayo uses only 5MW hence the surplus will be fed into the national grid,” said Mr Masiyane.

Meanwhile, Permanent Secretary in the Ministry of Industry and Commerce Dr Mavis Sibanda describedthe development as one of the signs that industry is keen to grow.

“Companies have shown that they are putting more resources into production and that is very interesting. As you can see here at PPC they are putting a solar plant which means that the issue of electricity which has been mentioned by a few other companies will be dealt with.

People are not only waiting for the Government to come and help them, they are also investing in green energy like the PPC,” said Dr Sibanda.

The development will see increased local production of cement as well as the continued trajectory of increased manufacturing capacity utilisation to over 61 percent, according to estimates from industrialists.

The Sunday News

BULAWAYO Mining Company’s How Mine has increased gold output by 59% after a US$5 million capital injection and also gained Standards Association of Zimbabwe (SAZ) recognition.

The mine obtained SAZ certification for successfully using internationally recognized management procedures.

Speaking during the handover of the certificates, SAZ director-general Eve Gadzikwa said the company had been recognised for its commitment to ensure safety of workers and the environment.

“This important milestone underlines the determination and commitment of management and staff in safeguarding the health and safety of staff and stakeholders and protecting the environment,” she said.

“With the ever-changing legal and safety requirements impinging on co-operatives today, it makes good business sense to ensure that an organisation implements international standards to support every aspect of business.”

How Mine managing director Kimpton Chihota said the company had set new mining and milling records in 2021.

“Our gold output increased by 59% compared to the previous year. This improved performance is on the back of a capital injection of US$5m for the shaft sinking project, which opened up new mining areas,” he said.

“This project was commissioned in the last quarter of the year 2020. The mine is currently carrying out exploration, both on surface and underground, in order to open up the resource base for expansion.”

Chihota said they remained focused on contributing towards government’s target of a US$12 billion mining industry by the year 2023.

“Today, our company receives recognition for successfully implementing internationally-recognised management systems, ISO 14001:2015 and ISO 9001:2015. What we are witnessing here today is a business that has reached some of the highest principles expected of businesses in the modern world,” he said.

“It means that, today, Bulawayo Mining Company is committing itself to the highest standards in its operations and in its service to the community, and to our country.”

Chihota said the mine started with the implementation of the ISO 14001:2004 environmental management system, which was a commitment to the highest standards in managing and protecting our environment.

“We also implemented the globally renowned behaviour-based safety programme as a result, we saw a massive drop in annual injury numbers by 60%.”

Newsday

YOUNG Miners Foundation (YMF) has partnered with Bulawayo based KBM Consultancy, a mining and metallurgical consulting company as part of efforts to assist young small-scale miners formalise their operations and grow their enterprises to medium scale.

Formalisation of youths artisanal and small-scale miners has been viewed as one of the ways to curb smuggling of precious minerals out of the country, while complementing the country’s target to turn the mining sector into a US$12 billion industry by 2023.

In an interview, YMF chief executive officer Mr Payne Kupfuwa said the partnership with KBM Consultancy was in sync with their vision of up scaling young small-scale miners into formalised medium scale miners.

“Our aim as young miners is to positively contribute to the realisation of a US$12 billion mining economy target which should see Zimbabwe edging closer to the goal of being an upper-middle income country by 2030.

This can be achieved by working together with strategic partners such as KBM Consultancy to formalise and grow young miners’ enterprises into professional medium scale entities so that they boost their production capacities,” said Mr Kupfuwa.

He said their 2022 theme was: ‘Young Miners Collaborative Corporate Participation for Sustainable Mining by 2030’ and they were pushing towards creating strategic synergies, strategic partners with key stakeholders in mining as well as along the value chain.

Mr Kupfuwa said since the beginning of the year they had engagements with various stakeholders including Better Brands Jewellery, a local gold-buying agent to map the way forward on how best they could assist young miners.

“In terms of assistance, Better Brands Jewellery will be coming in to help young miners with exploration and extraction equipment so that they can sell their gold to them since they are an agent of Fidelity Printers and Refiners. We will continue to engage and partner with more key stakeholders in the mining sector,” he said.

He said they were also working with institutions to ensure that better opportunities are availed for employment of mining graduates or technicians from the Zimbabwe School of Mines and other universities.

Mr Kupfuwa said for 2022 they were looking at exchange programmes meant to give young miners exposure outside the country so that they get to understand how other young miners in other countries are managing to develop their small-scale mines to medium scale ones.

KBM Consultancy director of operations Mr Kudakwashe Mapurisa said they were going to provide services to young miners in the form of expertise ranging from mineral exploration, mining, crushing, milling and leaching of gold ores.

He said they aimed to assist with designing of facilities, construction of plants, management consultancy and training of staff.

“As YMF comes through for the development of small-scale miners into noticeable and profitable industries through professionalism and formalisation of all mining activities, we will work hand in glove with them.

“We will provide technical services input to ensure there is efficiency and productivity in mining operations all leading to improved gold production in the sector. The collective achievement will boost miners’ production capacities and positively contribute to the Government’s US$12 billion mining industry target,” added Mr Mapurisa.

Meanwhile, last month the Reserve Bank of Zimbabwe (RBZ) records revealed that in 2021, Zimbabwe’s large-scale gold producers delivered 11 159 kilogrammes while small-scale producers contributed 18 470,61 kilogrammes, a move that represented a 55,5 percent increase as compared to the previous year.

Mines and Mining Development Minister Winston Chitando is on record saying the US$12 billion mining industry target by 2023 is achievable as part of the broader macroeconomic roadmap towards achieving an upper middle-income economy by 2030.

The Sunday News

IMPALA Platinum (JSE: IMP, Implats), a leading producer of platinum group metals, announced that its gross concentrate volumes in H2 2021 decreased by 4% to 1.62 million 6E ounces from 1.68 million 6E ounces in H2 2020.

The company’s production from managed operations declined by 4% to 1.16 million 6E ounces (H2 2020: 1.21 million ounces) and production from joint venture operations declined by 4.2% to 271,000 6E ounces (H2 2020: 283,000 ounces).

Group refined production of 1.62 million 6E ounces, including saleable production from Impala Canada, declined by 5% from the comparative period.

The company added that refined volumes in the comparative period benefitted from increased availability of processing capacity due to the timing of annual processing maintenance.

Implats also reported that its sales volumes declined by 5% to 1.55 million 6E ounces from the comparative period, in line with lower refined production.

Importantly, the company said that its basic earnings for the period are expected to decrease by between 39% and 50% to be between R12.5 billion and R15.3 billion. Basic earnings per share for the period are expected to decrease by between 42% and 53%, to be between 1,529 cents and 1,872 cents per share.

Implats explained that in the comparative period (H2 2020), basic earnings of R25.1 billion or 3,222 cents per share, benefited from the reversal of impairment losses on property, plant and equipment and the prepayment of royalties of R10.6 billion or 1,362 cents per share (post-tax).

Implats is a leading producer of platinum group metals. The group is structured around six mining operations and Impala Refining Services, a toll refining business.

The company’s operations are located on the Bushveld Complex in South Africa, the Great Dyke in Zimbabwe – the two most significant PGM-bearing ore bodies in the world – and the Canadian Shield, a prominent layered igneous domain.

NewZimbabwe

HWANGE Colliery Company (HCC) has won a civil court order to evict about 200 ex-workers who had refused to vacate the properties citing outstanding terminal benefits.

The company has given them until month-end to move out and pave way for new occupants.

But the workers said the move was inhumane given that it was being effected at the peak of the rainy season.

“The ex-workers are refusing to vacate the Colliery houses saying the company owes them money.”

The coal miner recently evicted hundreds of its former employees from company houses in Number 1, Number 2, Number 5 and Lusumbami villages.

Some of the affected ex-workers retired 10 years ago and have been staying in the company houses waiting for full payment of their terminal benefits by the struggling firm.

They are expecting around US$20 000 each, but the company claims to have fully paid them in local currency in monthly instalments of $300.

In an unrelated matter, the Hwange Local Board has embarked on a stormwater drain clearing programme in the town to prevent flooding after 10 houses were recently affected by flash floods.

Town secretary Ndumiso Mdlalose said: “When the rains started, the engineering department’s teams were on high alert, monitoring areas that are prone to floods. In 2020, council undertook an extensive exercise, which saw it clearing storm drains and widening water courses to avert catastrophe.

“It also cleared the
1 200-millimetre diameter culvert on one of Empumalanga suburb’s major roads that had been stopping the flow of water over the past few years, leading to flash floods. Prior to the exercise, about 10 houses were perennially affected by floods.”

NewsDay