Mining ZimbabweLatest Mining News, Policy and Industry Updates

CHROME miners are crying foul over underpricing of Zimbabwean ore by some Chinese chrome smelting companies.

This comes as chrome miners appealed to the government not to widen the export ban to include raw chrome fines. The chrome ore fines were exempted from the previous ban on raw chrome exports.

Miners claim that the fundamentals are not yet right for the ban on chrome fines, considering the experiences of the current ban on raw chrome exports, which has seen some Chinese smelters colluding to set prices that disadvantage chrome miners.

Currently, the biggest consumers of raw chrome are Chinese companies, who own a number of smelting facilities around the Great Dyke. There are indications that Chinese smelting companies are giving a raw deal to the miners.

This comes after there has been a surge in ferrochrome prices on the global market triggered by a spike in demand resulting from an increase in construction projects.

A miner, who spoke on condition of anonymity, said the issue of price manipulation was a thorny one, considering that the companies buying are just a small group.

“We recently met the Ministry of Mines and Mining Development over the issue and we were pleading for the extension on the proposed ban on chrome fines because we believe a ban will throw us back into the situation we are facing with Chinese smelters,” the chrome miner said.

“We believe the fundamentals are not yet right and any ban on the export of chrome fines will spell doom on miners. The Chinese have created a cartel that is busy manipulating prices despite the current surge in global ferrochrome prices,” the source said.

Mines ministry permanent secretary Onismo Moyo said he was yet to get the reports on the matter.

“I have not yet received anything to that effect, but I will have to check and come back to you,” Moyo said.

Zimbabwe Miners Federation (ZMF) secretary for external affairs Gift Karanda confirmed that they had made an appeal to the government on the chrome fines ban, but could not divulge more details.

“There is an appeal on the issue of chrome fines expected ban, but at the moment it is premature to comment on the matter and on the issue of chrome prices you can refer your questions to the Ministry of Mines,” Karanda said.

There are also concerns that Zimbabwe has become a target of Chinese companies that are dumping second-hand chrome smelters following the promulgation of an environmental law prohibiting the use of heavy environmentally unfriendly machinery in the Asian economic powerhouse.

In 2019, the State Council of China announced that it would ban new steel, coke, chrome and primary aluminium capacity in the Beijing-Tianjin-Hebei and Yangtze River Delta regions.

Within this region, Hebei’s steel production was expected to have further limited to 200 million tonnes by 2020.

Cities, such as Beijing and Guangdong, have been implementing this ban and other cities were expected to follow suit.

This came as China continued to push heavy industries, especially those involved in chrome smelting, to consider new technologies that are environmentally friendly.

This, therefore, meant that by migrating to the new technologies, countries like Zimbabwe became a lucrative and ready market to dump the old smelting machinery.

The Independent is informed that several chrome companies in Zimbabwe have since been approached by Chinese companies with the intention of striking deals on the smelters.

The Independent

ACUTE coal shortages grounded state run thermal power stations for 142 days during the first quarter of this year, triggering a sharp fall in production, the Zimbabwe Power Company (ZPC) says.

In a quarterly review covering the first three months of 2022, ZPC, a unit of power utility Zesa Holdings, said small thermal power stations contributed only 1% to total electricity output during the period.

Zimbabwe has three thermal power stations namely Bulawayo, Munyati and Harare.

ZPC did not disclose why the country experienced coal shortages.

But in the past few years, local miners have been struggling to meet demand for various reasons.

ZPC indicated that Bulawayo, Harare and Munyati power stations missed their quarterly power target of 47,50 gigawatt hours (GWh) by 45,17%.

However, the country surpassed its total quarterly power generation target by 18,55% due to improved reliability and plant optimisation at Hwange Thermal Power Station, as well as increased generation at Kariba hydro power station.

“The small thermal power stations missed their target which was pegged at 47,50GWh by 45,17% due to lack of coal stocks and low plant availability, which resulted in the stations shutting for a total of 142 days during the quarter,” ZPC said in its first quarter update.

Over the years, due to ageing plant equipment, small thermal power stations have lost their generation capacity, which has seen their output dropping to zero production on some days due to operational constraints.

The ZPC said 2022 started off well with notable improvement in output in the first quarter.

“The quarterly target, which was set at 1885,30GWh was surpassed by 18,55%.

“This is mainly attributed to improved reliability and plant optimisation at Hwange, as well as increased generation at Kariba hydro power station to cater for high system demand,” the update reads in part.

“Hwange generated with four units for the bulk of the quarter while all eight units at Kariba were available for peak generation on most days.”

Kariba power station contributed 70% of the total energy production in the period under review, 4% of which was exported to NamPower.

Hwange power station, which is undergoing a US$1,5 billion expansion programme,  contributed 29% of the total, the report noted.

“Kariba power station contributed more than planned as it was ramped to meet high system demand and compensate for low generation at the small thermal stations,” ZPC said.

Although the Hwange 7 and 8 expansion project has faced delays predominantly caused by the Covid–19 pandemic, ZPC said the project was proceeding smoothly and it was on course to commission Unit 7 at the end of November this year, while Unit 8 is expected to feed into the grid in April 2023.

The project is currently at 83% complete, said ZPC.

It said the construction of a second pipeline and upgrade of the existing Deka pump station commenced in 2021.

It is expected to be completed at the end of March 2023.

The US$48 million project is being implemented in parallel to the Hwange Unit 7 and 8 expansion project, and is expected to solve the perennial water supply problem at Hwange power station, the country’s largest coal-fired power plant

The ZPC said plans to repower Bulawayo power station were on course and the impasse over ownership issues between it and Bulawayo City Council has been escalated to the Ministry of Local Government, Public Works and National Housing for assistance.

The company said it was stirring towards the use of renewable energy for power generation in order to achieve zero harm to the environment.

Some of the projects on the cards include Gairezi Hydro Power Plant and Batoka Gorge Hydro Power Project.

The Batoka project, which is being jointly developed by the governments of Zambia and Zimbabwe through Zambezi River Authority, has a capacity of 1 200 MW.

Construction costs have been estimated at about US$2,3 billion.

The Standard 

CANADIAN based gold exploration and development company, Zephyr Minerals Ltd, is planning to acquire 75% stake in Zimbabwe’s Manicaland-based Chikanga Gold Mine in a deal that is pending due diligence in the coming fortnight.

If the deal sails through, Zephyr will acquire 75% of the 40 hectares of the mine from Hiltouch Investments (Pvt) Limited.

Loren Komperdo, president and CEO Zephyr vowed to tap into the underground potential of the mine and the low risk profile of the mine.

“We are very excited about the potential of the Chikonga Mine property. This proven gold producer with over eight years of small scale mining has never been drilled except for one 41,4 meters core hole drilled in 1975.

“The current shallow mine workings have barely scratched the surface of this property. Zephyr sees Chikanga as a low-risk exploration prospect. We know the gold is there. The questions are: how rich is it; will the gold distribution support potential open pitting; and how big is it?”

The development comes at a time when Zimbabwe has been implementing economic reforms as work around stabilising the local currency continues to progress prompting some international investors to settle for the Southern Africa nation as an investment option.

The Chikanga Mine is a small scale mine with 12 to 14 small, shallow shafts on multiple echelon, east-west trending, steeply dipping shear zones comprised of siliceous mica schist and silicified andesite typically hosting bands of fine grained grey and black quartz with disseminated pyrrhotite, pyrite, arsenopyrite, chalcopyrite and gold.

Current information indicates the Chikanga Mine, with the exception of a single 41,4-meter hole, has not been previously core drilled which presents an excellent discovery opportunity beneath current mine workings.

“The property will be assessed for both its open pit and scaled up underground potential of the multiple shear zones. In addition, historical reports suggest potential for gold mineralisation in the shear zone wall rocks.

“An underground winze developed in 1974 intersected “… a strong wide band of pale grey rock … it contained no quartz or visible sulphides and assayed only 1,0 g/t.”* At the time, only one reef was being mined at the No.1 Shaft versus the multiple reefs at present,” added Zephyr.

NewZimbabwe

Diversified resources group, RioZim Limited, says gold production is forecast to improve as Cam and Motor, the group’s high grade ore flagship gold mine is set to resume production.

For the past two years, there was no production at Cam and Motor to facilitate construction of its US$17 million BIOX Plant, whose commissioning completed on April 14, 2022.

The closure of the mine saw the group’s gold production for 2021 declining by seven percent to 1 122 kg from 1 205 kg in the prior year.

“Production is forecast to improve as Cam and Motor returns to producing from its high grade pits,” Saleem Rashid Beebeejaun, the group’s chairman, said in a statement of 2021 financials.

He said during the year, the lifespan of the stopgap One-Step mining operation was extended and continued to supply ore to the Cam and Motor plant, however, the grades were low which resulted in low production.

The group’s other operations, Dalny and Renco, recorded almost consistent production from the prior year.

According to Beebeejaun, the completion of the BIOX Plant, which was scheduled for the second half of 2021, was delayed due to inadequate foreign currency and Covid -19 pandemic induced challenges.

Therefore, earlier commissioning of the BIOX Plant Project, would have enabled resumption of mining operations at the Cam and Motor high grade ore pits.

“The BIOX Plant commissioning remained a priority for the Group. Subsequent to year end, testing of the plant components commenced in earnest with no major challenges being encountered. The commissioning of the BIOX Plant was completed on April 14, 2022,” he said.

The Biox plant has the capacity of improving the processing of pure oxide ores to make good grades and high recoveries.

Cam and Motor resumed operations in 2014 following the group’s successful US$10 million capital call and had a projected production of 4 000 ounces per month.

The mine had been closed in 1968, with the gold price at US$35 per ounce and the mine operating at depths of 1,800 metres when operations were no longer viable.

At that stage, the mine cut- off grade was 8 grams/tonne and so it was considered likely that there could be significant resources adjacent to the old workings that would now be economic to mine.

According to Beebeejaun, despite a seven percent decline in gold production, the Group’s revenue for 2021 increased by 84 percent to $5,8 billion compared to the prior period’s $3,1 billion primarily due to the depreciation of the local currency against the United States dollar.

In terms of individual gold business performance, Renco Mine operated at almost the same level of production as the prior year, achieving 561kg of gold, three percent lower than 580kg produced in the prior year.

The chairman said the slight shortfall in gold output from the prior year was attributed to reduced plant throughput as a result of increased power cuts during the year.

At Dalny Mine, there was a six percent growth in gold production achieving 209kg of gold from 198kg produced in the prior year.

Beebeejaun said the growth in gold production was due to increased plant throughput as plant improvements carried out during the year successfully stabilised the plant.

Gold production at One-Step mine fell by 18 percent from the prior year’s production of 427kg to 351kg.

“The low gold output was attributable to lower grades which dropped from the prior year.

“The life of mine was extended during the year despite the grades deteriorating and mining operations continued for the full year,” said Beebeejaun.

He added that the One-Step ore was processed at the plant in Cam and Motor as had been happening in the previous year.

Business Weekly

GROSS revenues at the Victoria Falls Stock Exchange (VFEX)-listed Caledonia Mining Corporation increased by 37% to US$35,1 million in the first quarter of this year, reflecting a major increase in gold production and prices, the firm said yesterday.

In the same period last year, gross revenue stood at US$25,7 million.

In its results for the quarter ended  March 31, 2022, Caledonia, which is also listed on the New York Stock Exchange and London Stock Exchange, said the high revenue reflected a 40% increase in production and a 6% increase in the realised gold price.

The 40% increase in production was due to higher tonnage milled, improved grade and better metallurgical recoveries.

Earnings before interest, taxes, depreciation and amortisation stood at US$14,6 million in the review quarter from US$9,7 million achieved last year.

Commenting on the results, Caledonia chief executive officer Steve Curtis said the first quarter of 2022 was an “excellent start”.

“Gold production in the quarter represents a new production record for any first quarter. Production in April showed a further improvement; production of almost 6 800 ounces in the month reflects an annualised production rate that is marginally above the top end of our guidance range for 2022 of 73 000 to 80 000 ounces of gold,” he said.

He said production in the quarter excluded approximately 1 500 ounces of recoverable gold contained in an ore stockpile which accumulated during the quarter as “we await the commissioning of an additional mill later in the year”.

“Operating costs were well controlled. The on-mine cost per ounce fell by 16% compared to the first quarter of 2021. The reduction was because of higher production, which means that fixed costs are spread over more production ounces; costs were also helped by reduced diesel consumption following the installation of equipment in late 2021 which allows us to manage the poor-quality grid power,” he said.

Following Caledonia’s successful secondary listing on the VFEX in late 2021, Curtis said the firm had increased the proportion of revenues received in United States dollars.

“This, in conjunction with other arrangements, means that we are not accumulating excessive local currency balances. We have a strong, long-term working relationship with the Reserve Bank of Zimbabwe and Fidelity Printers and Refiners and we are delighted that the payment process for gold deliveries and the regulations that manage the flow of funds from Zimbabwe continue to operate smoothly,” he said.

Curtis said Caledonia remained confident in achieving production guidance for 2022 of 73 000 to 80 000 ounces.

“Caledonia’s immediate strategic focus is to convert the commissioning of the Central Shaft project into higher production, lower costs and increased cash generation. We have made an excellent start in each of these objectives,” he said, referring to the new shaft, which was commissioned last year.

He said the firm would continue to evaluate further investment opportunities in the gold sector in the country, with the long-term vision of becoming a mid-tier, multi-asset gold producer.

The Caledonia chief said its 12 megawatt solar project was now in the final phase of construction and would be operational within the next few months.

Newsday

A CONTROVERSIAL firm that produces bling products for domestic and international markets has shaken Zimbabwe’s export market, outsmarting big brands in the past four years, central bank data showed yesterday.

Suzan General Trading, which exports jewellery products and beneficiates diamonds and gold, is generally out of the spotlight.

But away from public limelight, the firm has developed a network that has given it financial clout, generating more United States dollars for the country than most big brand manufacturers, the Reserve Bank of Zimbabwe (RBZ) said.

The firm courted controversy in 2018 when an RBZ boss was dragged to court for criminal abuse of office.

It was alleged at the time that on October 13, 2017, Suzan opened a bank account to facilitate payments from Fidelity Printers and Refiners, the firm that buys all of Zimbabwe’s gold.

In the aftermath, an RBZ director appeared in court, accused of authorising the withdrawal by Suzan of amounts beyond the authorised limits.

The firm has been named in other cases involving gold, but none of its executives have ever been found guilty in Zimbabwe.

Exports out of its international sales reached US$40,9 million in 2018, before rising to US$113,2 million in 2019.

The value surged to US$168 million in 2020, even as the COVID-19 pandemic-induced lockdowns grounded economies, before slowing down to US$6,6 million last year, but still far ahead of the rest of the country’s exporters.

By April 26 this year, Suzan had exported products worth US$1 million.

The US$330 million exports revenue was far ahead of second-placed Tregers, which exported goods worth US$55,2 million during the four-year period, according to the exchange control table listing the top 20 best exporters from the manufacturing sector.

Paramount Exports was the third after shipping out products worth US$49,6 million during the period.

Other big exporters included Sunny Yi Feng Tiles Zimbabwe, a Chinese firm that has been manufacturing tiles in Norton in the past three years.

Hunyani Group, Schweppes Zimbabwe, Lobels Biscuits, Megapak Zimbabwe, Varun Beverages, Nestle Zimbabwe and Steelmakers Zimbabwe are some of the firms that made it to the top 20, according to central bank data.

Zimbabwe has struggled to generate enough exports to power its faltering economy, but the Confederation of Zimbabwe Industries (CZI) said on Wednesday exports from
the manufacturing sector were firming.

It said exports grew by 5,5% to US$404 million in 2021, powered by improved access to cheaper foreign currency from the foreign currency auction system.

Industry and Commerce minister Sekai Nzenza said the manufacturing industry was poised for growth.

“Testimony to this, the manufacturing sector has realised a 5,5% increase in exports from US$383 million in 2020 to US$404 million in 2021,” said Nzenza, speaking at the launch of the CZI’s 2021 Manufacturing Sector Survey report launch in Harare.

Newsday

INVICTUS Energy has started constructing the site for its first exploratory well in Muzarabani where it is prospecting for oil and gas.

This is being done in preparation for drilling, which is expected to start in July this year, as the company enters a crucial phase in the development of the prospect.

The exploratory wells will give a better idea of the full extent of the oil and gas reserves in the Muzarabani prospect following the collection of more than 800 km of 2D seismic data in 2021.

The initial exploration work by Invictus has suggested the existence of a substantial amount of oil and gas reserves.

In an update, the company said: “Invictus Energy has commenced construction at the Mukuyu well site in Zimbabwe. The Mukuyu structure is independently estimated to contain 8.2 trillion cubic feet+ 247 million barrels of conventional gas-condensate.”

Invictus has contracted Exallo Drilling to provide drilling services while American company Baker Hughes was tied up for well services, which include cementing, drilling fluids, tubular running, installation of wellhead equipment and project management.

Invictus managing director, Scott Macmillan, recently said the project was on course.

“The (drill) rig is mobilising in May and should arrive in Zimbabwe around mid-June, it depends on transit from Songo Songo in Tanzania,” he explained.

A second exploration well is also expected to be sunk at a newly discovered site.

“In addition to Mukuyu, there’s a basin margin play; it is a typical East African rift play; it is entirely separate from Mukuyu. We are mobilising a rig and there is only a small incremental cost to drilling this as well.”

American company Mobil once conducted limited exploration work in the area in the 1980s, which excluded drilling.

In 2020, the Zimbabwe government classified the Muzarabani project as one of the priority development projects, which would aid the country’s pursuit of its economic development agenda.

Zimbabwe is aiming to transform into an upper-middle Income economy by 2030.

NewZiana