Mining ZimbabweLatest Mining News, Policy and Industry Updates

MINE workers’ unions have bemoaned overtaxing of employees in the sector saying this leaves them with little disposable income, making it difficult to survive during the current economic hardships.

Last week, unions representing miners toured mining firms throughout the country to carry out awareness campaigns for workers on labour and sexual harassment rights.

Industrial Zimbabwe Youth Committee chairperson Tafadzwa Chidindi said from the five-day campaign, it emerged that mineworkers were overtaxed.

“Of the workers we interviewed and interacted with, our findings were that seven out of 10 complained of pay-as-you-earn (Paye) deductions which they said left them with nothing on their payslips,” he said.

“At Old Nick Mine in Bulawayo, workers feel they are being overtaxed and showed us their payslips, where the minimum wage was $30 500 for the mining sector. The Zimbabwe Diamond and Allied Mineral Workers Union (Zidamwu) negotiated that 52% of the total amount should be in United States dollars, while 48% is paid in local
currency.

“After statutory deductions such as National Social Security Authority (Nssa), Paye and others, employees said they end up taking home around $19 000, which is less than US$150.”

Chidindi said at Old Nick Mine, most workers had $1 200 deducted by Nssa, and they were unhappy about it saying the social security authority’s deductions should not exceed $450.

The unions decried lack of participation by women in the mining sector.

“The absorption of female employees in the mining sector is still low. Some mines do not even have ablution facilities for ladies at the workplace,” he said.

“At Old Nick Mine, there are few female workers regardless of the fact that it is located a few metres from the Zimbabwe School of Mines.”

In Gwanda at Farvic Mine, most underground workers were said to be employed under fixed-term contracts despite a 2003 statutory instrument, which states that they should be permanently employed.

“Their payslips stated that they were permanent employees, yet in reality, they are being considered as temporary employees. We also visited Zimbabwe Zhongxin Electrical Energy Company in Hwange, which produces electricity using gas,” Chidindi said.

“The Chinese owned company has around 100 Chinese and around 30 local employees. The plant hasn’t been commissioned as yet and after the commissioning, the company said it would then be able to absorb more locals.”

NewsDay

Mining billionaire Andrew Forrest said he aims to create the world’s first ammoniapowered ship before the end of next year, part of an ambitious plan to run all his company’s fleet on a carbon-free version of the fuel.

“This is just the first,” Forrest, chairman and founder of Fortescue Metals Group said in an interview.

“We have about 100 ships on the water, and we’ll be converting all our own ships over to green ammonia at the earliest possible opportunity, well within this decade.”

The ship itself is tiny, with a transportation capacity that’s less than a 100th of the size of some of the world’s largest bulk commodity carriers.

Ammonia is considered a cleaner, possible replacement in the future for the oil-derived marine fuels that almost
exclusively power shipping today.

The announcement came on transport day of COP26, the ongoing climate summit being held in Glasgow. — Bloomberg.

A COUPLE of weeks back, Zimbabwe Chamber of Mines published its state of the mining industry survey report looking at issues faced by the industry and prospects for 2022.

To ensure objectivity, the Chamber states that its involvement was restricted to sponsoring and facilitating access to information to its members who form a greater part of the respondents in the survey.

The report looks at  key highlights, mining business confidence, local content and corporate social investments in the mining industry, expectations of the artisanal and small-scale mining sector (ASSM), COVID-19 and mining industry outlook for 2022 prospects.

Mining sector executives are reportedly positive on the prospects of the sector to be mainly driven by improving international commodity prices and a resultant increase in capacity utilisation in the sector as output is expected to grow.

The downside threats include the continuing high risk perception of the country which is likely to limit major investments in the sector, continuing infrastructure and energy deficits, problems with access to foreign currency and increasing costs of capital and operations.

In my opinion, I don’t see how anyone can be positive about a growth in output without these key challenges being fully addressed.

An increase in mining output is key in order for us to increase our foreign currency earnings and employment in the sector.

We have definitely not been well organised and aggressive in unlocking our mineral resources and most of it has to do with the political economy of the sector.

Chrome, coal and diamond subsectors are expected to grow significantly in 2022 while platinum will continue to dominate the sector.

Major expansions are expected in the gold and platinum subsectors with expectations that gold output will reach 35 tonnes.

Capacity utilisation is expected to increase to 83% in 2022, a miniscule increase from 82% in 2021 mainly driven by gold and ferrochrome.

For the mining sector, the fiscal regime continues to play a significant role and can either stifle or enable growth.

Key fiscal issues identified which continue to undermine viability prospects include high royalty and beneficiation taxes, high environmental management levies and misaligned rural district council charges.

On the issue of access to foreign exchange, miners are not happy with the 60% retention which is viewed as inadequate to meet increasing operational costs.

Added to this, the practice of having to pay for local expenditure in foreign currency reduces funds available for importation of essential inputs and it makes sense to allow miners to pay taxes, royalties, electricity and statutory obligations in local currency and premising of taxes, fees and charges at the obtaining auction market rate.

A key input to mining operations is energy and indications are that on average, miners are facing six hours of power outage per day and this has serious repercussions on operations and output. Unfortunately, the situation is expected to worsen in 2022 and this will limit output growth prospects.

In my opinion, such matters need urgent attention at the highest level. Accepting payment for electricity bills in local currency, for example, will have a significant positive impact on the sector and rehabilitation of dilapidating power infrastructure is critical.

The issue of capital inflows into the sector remains a challenge due to subdued foreign direct investment into the economy as a whole.

Most miners indicated that they are facing difficulties in raising external capital to fund their operations, with some reporting that they had put on hold some of their projects due to capital shortage. Only improved political and macro-economic stability can address these issues.

On the issue of mining policy environment, survey findings show that most respondent executives, 74%, are expecting the mining policy environment to be suboptimal, citing delays in finalising outstanding policy matters including a mineral development policy and mining cadastre.

This falls under mining sector organisation, a matter which I have written on before. An enforceable, transparent and comprehensive regulatory framework for natural resource sectors provides a stable and predictable policy environment which increases long-term investment in the sector.

The quality and consistency of the legal, regulatory and fiscal frameworks in the sector will, therefore, always have a major influence on the growth of the sector.

On artisanal and small-scale miners (ASM), the key issues raised are the need to formalise the sector and develop appropriate legislative tools especially on allocation of mining rights. The ASM sector remains disorganised and highly risky and yet it can significantly contribute to high minerals output.

Overall, although the report tries to create a balanced perspective and to remain positive, there is still a lot to be done to get our mining sector operating at full capacity. What is clearly lacking is substantive progress on stated intentions. Everyone seems to understand what needs to be done and yet progress is very slow.

As a result, Zimbabwe’s mining sector potential remains untapped due to lack of investment in a sector that could do wonders for the economy.

I will conclude by repeating an important quote from the book: “Rents to Riches” – The Political Economy of Natural Resource–Led Development.

“Countries that are more politically inclusive are likely to enjoy better natural resource management and developmental outcomes. Countries where a greater proportion of society has a voice in policy making and where decisions are made on the basis of public goods provision to the many, rather than private spoils to the few, are more likely to benefit from welfare-enhancing policies that share extractive sector developmental riches across social, political, and economic groups in a sustainable fashion.”

That is surely the route we must take if we are to see Zimbabweans benefiting from their mineral resource endowments.

•  Vince Musewe is an independent economist, you may contact him on [email protected]

Zimbabwe’s mining sector will, this month, exhibit at the Dubai Mining expo, as part of efforts to lure  more investors into the mining sector, Mines and Mining Development minister, Winston Chitando  has said.

The capital intensive mining sector has been clamouring for funding to ramp up production as government wants the industry to be a US$12bn sector by 2023.

Chitando said the sector was geared to participate at the expo.

“November is the mining month for Dubai Expo and for Zimbabwe we do have the mining investment on November  24, 2021 and we look forward to it.

“There’s lots from stakeholders and we look forward to a successful expo in November.

“This is an assurance that the US$12bn mining target in 2023 will be achieved as we are working tirelessly,” Chitando said.

Minerals  Marketing Corporation of Zimbabwe (MMCZ) general manager Tongai Muzenda said there will be virtual marketing during the mining expo.

“As a country we will be showcasing what we have and for us as MMCZ, we are really keen on marketing minerals which is in the last week of November.

“So what we will be doing is we will be showcasing our minerals. All minerals we will be showcasing to the world including electronic or virtual marketing. We have platforms that we have set up and all minerals will be there. We will be showing what we have done as Zimbabweans from mining through exports everything: diamonds, copper, gold everything. And this adds also positively to our US$12bn dollar target by 2023,” he said.

Chitando also said government was working on different projects around the country.

“We have very significant projects taking place, the major minerals being platinum, gold, diamonds, chrome and steel.

“We have notable projects in the Hwange area especially for the coal, coke and hydro carbon lithium where we have about nine different coal mining companies registered but most importantly value addition where we have a number of power stations which are being established and also in terms of the value addition,” he said.

Chitando, however, admitted that the Ministry was facing challenges because it was using a manual system  for mining titles.

“To some extent, this has been contributing to disputes in terms of the holding of mining titles. I am glad that we are quite advanced to the mining administration system.”

He said the computerisation of the mining title administration known as the  cadastre system will help in supporting the US$12bn milestone.

Business Times

WILDLIFE conservationists have called on communities to ensure win-win situations for humans and nature in order to reduce human-wildlife conflicts.

This was said on Monday by African Wildlife Foundation (AWF) country director Olivia Mufute in Harare during a wildlife and environment training workshop attended by journalists from Zimbabwe, Botswana, Mozambique and Zambia.

Mufute said as the race to extract Africa’s natural resources heated up, there should be a win-win situation for humans and nature.

Africa is home to a broad variety and abundance of the world’s biological and natural resources and the world’s biodiversity hotspots.

However, the over-exploitation and destruction of natural resources, including wildlife, is said to paint a grim picture of lack of efficient conservation methods.

“Africa’s natural world is declining at an unprecedented rate in millions of years. The way we produce and consume food, and the choice of energy, and the blatant disregard for the environment entrenched in our current economic models is pushing us to the limits of the continent,” Mufute said.

“Despite the importance of biodiversity to our livelihoods and wellbeing, our quest for socio-economic development has caused tremendous loss of biodiversity. The rapid economic and human population growth has come at a very high ecological cost.

“While efforts are being made to attract huge investments and financial capital, the same care is often not being taken to preserve our natural capital.”

Mufute added: “Agricultural expansion, new settlements, infrastructural development, and resources extraction are driving the degradation of forests, rivers, and grasslands. The resulting habitat loss and fragmentation threatens ecosystem goods and services upon which both people and wildlife depend,” she said.

The World Economic Forum estimates that human activities have caused loss of approximately 83% of all wild mammals and half of all plants.

Since the 19th century, there have been concerted efforts towards the conservation of Africa’s natural resources.

Newsday