Mining ZimbabweLatest Mining News, Policy and Industry Updates

Continuous investments have seen gold production at Caledonia Mining Corporation’s Gwanda-based unit – Blanket Mine – increasing 40 percent to 18 515 ounces in the first quarter to 31 March 2021 compared to 13 197 ounces produced in the previous quarter.

The company is also confident that its investments are likely to see gold production for 2022 expected to range between 73 000 to 80 000 ounces.

Group chief executive, Steve Curtis, in a production update said the output is a record for any first quarter which is usually affected by the rains.

“…during this quarter we have set a new first quarter production record and 18,515 ounces which is ahead of our expectations and reflects the increased capacity at Central Shaft,” he said.

“18 515 ounces is ahead of our expectations and reflects the increased capacity at Central Shaft.
..we are on track to meet our annual production target,” said Curtis.

He said the ramp-up in production towards the quarterly target of 20,000 ounces means that the group is on track to meet annual production targets.

However, during the period, the Group witnessed a fatal accident that resulted in the death of a Blanket employee.

Caledonia became the third listing on the Victoria Falls Stock Exchange (VFEX), where it listed by way of introduction of Depository Receipts as Caledonia’s shares cannot be directly traded in Zimbabwe, due to some limitations on the New York Stock Exchange where they are also listed.

In its previous quarter, the company said it continued to evaluate further investment opportunities in Zimbabwe’s gold sector to transform the Company into a mid-tier, multiasset Zimbabwe-focused gold producer.

The group highlighted that the last 12 months have marked a turning point for the business and the Central Shaft has been a huge project costing approximately $67 million, all funded through internal cash flow and was commissioned in the first quarter of 2021.

In the year to December 2021, production reached 67,476 ounces, which was above the top end of the guidance range and was a new record for annual production.

Caledonia in order to improve the quality and security of Blanket’s electricity supply, minimise environmental footprint and help create a more sustainable future for the business, Caledonia is constructing the first phase of a 12 MWac solar plant that will provide approximately 27 per cent of the average daily electricity demand at Blanket Mine.

According to Curtis, the project, which is expected to yield a modest return to shareholders, is expected to be completed in mid-2022.

During the year under review, Caledonia acquired the mining claims at Maligreen in the Zimbabwe Midlands which is estimated to host a NI 43-101 compliant inferred mineral resource of approximately 940,000 ounces of gold in 15.6 million tonnes at a grade of 1.88g/t.

Curtis said the immediate focus on this asset is to improve the confidence level of the existing resource base and the company is currently re-assaying historic drill cores.

Government is targeting 100 tonnes of gold per year by 2023, a figure which is expected to help the mining sector earn US$12 billion annually.

The multi-billion-dollar industry will be driven by gold, platinum, diamond, chrome, iron ore, coal, lithium, and other minerals.

The background of mineral contribution to the US$12 billion is that US$4 billion will come from gold, US$3 billion in platinum, US$1 billion in diamonds, US$1 billion in coal, US$1 billion in chrome, ferrochrome and carbon steel, half a billion in lithium and US$1,5 billion in other minerals, making it US$12 billion.

The artisanal and small-scale miners (ASM) are also expected to play an important role towards the mining milestone with sector player’s committing to contribute US$4 billion by the targeted period.

Business Weekly

TWO men were found dead in a flooded mine shaft in Gokwe South, police have said.

Munyaradzi Muduri (33) and Admire Mazarahanda (22) both from Chief Njelelele in Gokwe, died upon admission at Gokwe District Hospital after they were retrieved from Umo Mine while in an unconscious state as they were trying to pump out water from the shaft.

Midlands Police Spokesperson, Inspector Emmanuel Mahoko confirmed the incident which took place on 17 April around 2PM.

“The Zimbabwe Republic Police confirms receiving a sudden death report involving two men who died whilst pumping water from a mine shaft at Amo Mine in Gokwe,” said Inspector Mahoko.

The now deceased Muduri and Mazarahanda reportedly went into the shaft to pump water.

“Their colleague who was outside the mine heard them calling for help. He mobilized some villagers who assisted him to retrieve the two,” said Insp Mahoko.

The duo was found in an unconscious state and were rushed to Gwanika Clinic where they were further referred to Gokwe District Hospital.

They were pronounced dead upon arrival.

Inspector Mahoko urged people in the mining industry to get guidance from experts and the Ministry of Mines and Mineral Development in putting effective safety measures in their work.

The Chronicle

Tharisa Capital says the development of the tier 1 Karo Platinum Group Metals (PGMs) project will see the group’s PGM production doubling within the next 24 months.

The London – listed platinum miner which recently acquired a controlling stake in Karo Holdings, intends to spend US$250 million to complete the first phase of the project.

“We progressed our much anticipated cross borderstep by announcing our plans for developing the tier 1 Karo PGM project, doubling our PGM production within 24 months,”

Phoevos Pouroulis, the Tharisa’s chief executive said in a commentary for the Group’s second quarter ended 31 March 2022.

He said the transformation of Tharisa into a multi-asset, multi-commodity and multijurisdiction business, combined with strong PGM and chrome prices, as well as the further production upside from initiatives including the ramp of the Vulcan Plant at the Tharisa Mine, provide a very healthy outlook for the prospects of the Company in the second half of the year, and beyond.

Tharisa increased its shareholding in Karo Holdings to 66.3 percent and this was completed post quarter end.Pouroulis said an implementation study at Karo Platinum provided the robust economics of the first phase of the project while still presenting significant growth opportunities.

According to Tharisa, at the start of production in two years, annual production will be 150
000 ounces of PGMs in concentrate during the first phase.

Tharisa’s mining lease area for the Karo project covers an area of 23,903 hectares and is located within the Great Dyke in the Mashonaland West District, approximately 80km southwest of Harare.

The Zimbabwe government has a 15 percent stake in the Karo project and it has an option to buy another 11 percent.

Based on Karo’s valuation of US$770.4 million, the Government would have to spend US$84,7 million if it chooses to take up the option.

According to Pouroulis, the Salene Chrome plant commissioning is underway and production due to commence in Q3 FY2022.

Tharisa acquired a 90 percent shareholding in Salene Chrome Zimbabwe (Pvt) Limited (Salene) in 2018 from the Leto Settlement Trust (Leto), a related party being the beneficial shareholder of Medway Developments Limited, a material shareholder in Tharisa.

The effective date of the acquisition was 15 May 2018 and Leto retained a 10 percent free carried shareholding in Salene and was entitled to a 3 percent royalty on the gross proceeds from the sale of the chrome concentrates produced.

Salene was awarded three special grants under the Zimbabwe Mines and Minerals Act covering an area of approximately 9 500 hectares (95 km2) on the eastern side of the Great Dyke in Zimbabwe, which entitles it to mine the minerals thereon including alluvial chrome, being at surface chrome fines generated from seams as a result of weathering.

The country is envisioning a US$12 billion mining industry by 2023. PGMs are expected to contribute US$3 billion with production expected to jump from about 979 thousand ounces in 2018 to about 2, 5 billion ounces annually in 2023.

Gold, diamonds will contribute US$4 billion and US$1 billion respectively, while 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.

Business Weekly

Is Zimbabwe a good investment destination for miners or not? It all depends on who you ask.

Each year, Canada’s Fraser Institute asks over 2000 mining companies to assess which countries are best to invest in. The latest Investment Attractiveness Index, which has just been released, says Zimbabwe is the worst mining jurisdiction in the world.

Zimbabwe replaced Venezuela at the bottom, after an almost 11-point drop in its policy score.

African countries fare badly. Sitting with Zimbabwe in the bottom 10 of the index are the DRC, Mali, and South Africa. Botswana lost its top spot in Africa, because investors are worried by uncertainty over policy on protected areas, political stability, labour regulations and taxation.

Western Australia was ranked the best mining jurisdiction in the world.

Not so open for business

The survey reflects how badly Zimbabwe is doing in terms of managing perception, despite a spirited “Open for Business” campaign to attract FDI.

Fraser’s survey approached over 2 000 global mining companies. They were asked how a country’s mineral assets and public policies affect their decisions to invest. Their verdict on President Emmerson Mnangagwa’s administration was damning.

“All respondents claimed that the uncertainty regarding the administration, interpretation, or enforcement of existing regulations, the country’s legal system, its taxation regime, its infrastructure, trade barriers, its political stability, and security were major areas of concern that discouraged investment in the country,” the report says.

The companies surveyed say 40% of their investment decision is based on policy factors. Combined, the companies involved represent exploration spending of US$2.5 billion in 2021.

A recent report by the Chamber of Mines said while mining is growing, it faces a funding shortfall of US$10 billion over the next five years to really meet its potential. This shows Zimbabwe’s failure to attract the large mining investors that it needs to fully reach its resource potential.

According to the Chamber, the retention system, under which miners must sell 40% of their export earnings to central bank at the overvalued exchange rate, is hurting growth.

“This situation is resulting in loss to mining companies translating to at least 20% of gross revenue,” the Chamber says.

Zimbabwe: Bad for you, great for us

But, not everyone will agree with the new Fraser report.

Those surveyed won’t touch Zimbabwe with a long barging pole. Nico Muller, CEO of Implats, is happy that they see it that way.

“From a group perspective, I’d have to say Zimbabwe has been our best jurisdiction in which to operate over the past 20 years. It’s the jurisdiction in which, thanks to the leadership of Alex (CEO Mhembere) and his team, we have the least amount of disruptions, we have had the most predictable production profile,” Muller told a recent mining indaba in Johannesburg.

“We also have our safest operations, (and) the best control over costs, and our projects there are always on schedule.”

As for those who see Zimbabwe as a big risk, Muller said, wryly: “Personally, I am quite happy that the jurisdiction is seen as a risk by most other competitors because it allows us to continue expanding our interests in the jurisdiction”.

He did admit there is risk, “because a government that is desperate for foreign currency earnings will often tend to extract a great proportion of our foreign currency earnings.”

In the last half-year, Zimbabwe’s old currency problems shaved 32% of Zimplats’ year-on-year net profit.

Yet, this has not put Implats off Zimbabwe. It has had no problems repatriating its earnings. The company has, in fact, recently announced US$1.8 billion in new investment into Zimbabwe, which will expand mining and refining capacity, including a base metal refinery. That Zimplats is funding this expansion from internally generated resources – not loans – shows how profitable the company is.

Questioned at the indaba on the ethics of investing in Zimbabwe under a ZANU-PF government, Muller replied: “We are very comfortable working with the Zimbabwe government. Our participation is always aimed at improving conditions. You are in a far more constructive position if you participate within the economy because your ability to influence things in a positive direction is strengthened. You can encourage the authorities to move in the right direction.”

Zimplats is not alone.

Tharisa is spending US$250 million on a new mine, while Caledonia has just reported a record quarter and is looking for new mines to buy. Russia’s Vi Holdings is building the country’s biggest platinum mine, while Alrosa, the world’s biggest diamond company, has acquired exploration rights. Amplat’s Unki launched a US$60 million smelter in 2019 and has invested a further US$40 million to expand capacity there, which will increase output by 30%.

NewZwire

THE cancellation of the US$225 million deal between Zimbabwe Iron and Steel Company (ZiscoSteel) and ZimCoke was necessitated by the need to maintain the former as an integrated firm and the arrangement was not a “win-win” deal, ZiscoSteel board chair Engineer Martin Manuhwa has said.

The Ziscosteel board terminated a contract with ZimCoke which was supposed to take over the coke ovens within the Ziscosteel plant.

In 2017, both firms entered into an agreement when ZimCoke bought the coke-making assets of Ziscosteel consisting of the plant and machinery, land and buildings as well as associated infrastructure of coal handling and wagons.

However, Government terminated the deal upon recommendation by the previous board led by Professor Gift Mugano which believed the deal was not in “good faith”.

ZimCoke have since sought compensation from the State claiming the deal wasted their time and resources during their three-year stay at the plant.

But during the recent visit by Industry and Commerce Minister Dr Sekai Nzenza to the ZiscoSteel plant, current board chair, Eng Manuhwa said the arrangement was not a winwin.

Industry and Commerce Minister Dr Sekai Nzenza
“We have cancelled the ZimCoke deal as the board and we have advised our ministry, Cabinet and all stakeholders. Agreements of this nature were not on a win-win platform and we wanted to try and maintain ZiscoSteel as an integrated steelmaker, rather than breaking      the company into many parts,” said Eng Manuhwa.
ZiscoSteel is expected to sign a three-year contract with their new investor, Kuvimba Mining Holdings that will see the investor investing largely in human capital to strengthen the balance sheet.

The contract, with a sunset clause, is also open for extension of the contract after its lapse depending on the state of affairs by then.

The steelmaker is expected to receive an initial US$300 million capital for immediate resuscitation of the company and Eng Manuhwa said ZimCoke was not part of the revival strategy.

“As professionals on the ground, we want to see smoke in the next 12 or so months and the methodology or proposal by ZimCoke are not part of the strategy hence we have cancelled it.

All the legal elements required have since been undertaken,” he said.

Although appreciating efforts done by previous boards and the potential investors, Eng Manuhwa reiterated that the deal was one sided.

“Because of that reason, we had no option but to cancel the deal. We now need a thorough interrogation and feasibility study of the pathway ZiscoSteel want to take, which is an integrated approach as a steelmaker,” said Eng Manuhwa.

Technical teams from both Kuvimba and ZiscoSteel are already on the ground carrying out feasibility studies that will lead to the purchase of latest technology to augment what is already on the ground before signing of MoU and kick start production.

ZiscoSteel, located in Redcliff became defunct after a string of operational problems.

By early 2008, the company was producing less than 12 500 tonnes, way below the breakeven capacity of 25 000 tonnes and was shut down later that same year.

In November 2010, Essar Holdings, the African unit of India’s Essar Global agreed to buy 54 percent in ZiscoSteel in a deal worth $750 million, with the Government keeping 36 percent and 10 percent to be owned by minority investors.

But the deal eventually fell through due to a number of technicalities.

The Chronicle

THE mining sector has expressed optimism it will meet its annual production targets despite being disrupted by rains, which have affected several mining operations in the first

Mines Parliamentary Portfolio Committee chairman, Mr Edmond Mkaratigwa, said the sector was encouraged by the implementation of the National Development Strategy (NDS1), and were geared to buttress its success.
Mine
He said the mines committee is currently touring gold production operations to ascertain the impact of S.1. 40 of 2022 Mining (General) (Amendment) Regulations on the gold production sector.

Among other issues, the Statutory Instrument sets fees for special minerals lease inspections, prospective lease grants, annual fee for block of claims, special grants and mining leases of precious stones, renewals, transfers and export permit fees.

During the first tour, the portfolio committee visited Bubi Milling Centre in Matabeleland North and milling centres in Gwanda, Matabeleland South.

He said while the incessant rains received in some parts of the country do impact on gold operations, the disruption levels will not offset set output targets as the sector anticipates a production increase instead.

“It (rain) will not affect overall gold targets because its natural in the gold sector that the rainy season may have some low production levels especially in small-scale mines,” said Mkaratigwa.

“The production levels normally rise after the rainy season and we do not expect any dip in production as other seasons of the year will be compensatory.

“Instead, we anticipate a significant increase owing to NDS1 implementation among other enabling efforts being undertaken.”

Under the Second Republic, the country targets to establish more gold service centres across all the mining regions as a strategy towards attaining the US$12 billion milestone by 2023 with the gold sub-sector expected to contribute US$4 billion.

“There are mixed findings in terms of positives and findings but largely, a lot of improvements have happened in the sector,” said Mkaratigwa.

“There are also common challenges but basically, NDS1 has carried us to a better position and further steps building on the foundation will definitely help us build our country. We have visited just after the rains. So, the mines have not been fully operational.”

The Chronicle

ZIMBABWEAN tax experts this week reactivated the push for government to establish a public exploration firm, as they cast doubts over the credibility of mining data from private multinationals.

Giving insights during a workshop, which ran under the theme; ‘Fight Inequality’, which gave journalists an impression of tax dynamics in the resources sector, the experts warned that exploration data manipulation had opened floodgates for unrestricted plunder.

They said manipulated exploration figures had a huge bearing on the amount of royalties that governments earn from minerals.

The fresh fears added to concerns that billions were being siphoned by big investors at the expense of millions of people battling to shake off mounting hardships.

It also confirms reports that out of an estimated US$12 billion spirited out of Zimbabwe through illicit financial flows, the bulk was pillaged out of the mining industry.

But the rush for Zimbabwe’s minerals has gained traction in the past decade, with Chinese investors leading an influx that has been felt from platinum to gold and, recently, to lithium. On the lithium front, Beijing’s investors poured US$600 million in the last quarter of 2021 alone, demonstrating how Zimbabwe’s minerals have assumed higher demand on the global scale.

Experts told the Zimbabwe Independent that government should take control of the exploration system, instead of leaving multinationals to take charge and wander along minerals.

“Zimbabwe does not know the minerals that we have,” economist Vince Musewe, who spoke to the Independent on the sidelines of the workshop, said.

“We have to know what we have but we can’t rely on exploration companies because the results they produce are obviously to their own benefit. They will under-declare what they find and sometimes they don’t tell you what they have found because they make money from it.

“We can’t wait for third parties to determine that for us because they will produce what benefits them. Zimbabwe needs to have its own exploration. Investors are coming in to explore for us. The Ministry of Mines and Mining Development needs to explore for us and know the value of our resources and potential mineral revenue,” he added.

Towards the unceremonious exit of the late former president Robert Mugabe, ex-Mines and Mining Development minister Walter Chidhakwa tabled a plan to transform the Minerals Marketing Corporation of Zimbabwe (MMCZ) into an exploration company.

The plan ended when he exited government in 2017.

Musewe said accurate exploration data enhances royalties’ collection, helping Zimbabweans out of the heavy tax burden imposed on them by government, as it seeks to generate enough revenue to run the country.

“We need to actually project what royalties we can make from the minerals that we have and you will find that is enough to fund the tax bill of the country if we take away illicit financial flows and account for the royalties,” he said.

“Other counties do that then make sure that their developmental capital does not come from individuals but their resources and that is the paradigm shift that we need. We have to stop squeezing citizens of their money.

“Zimbabweans are going through a lot. We need to reduce their taxes. We can receive that tax from royalties. You will find that it will be profitable and companies will pay, especially when commodity prices are going up on the international market,” Musewe said.

He called for the broadening of Zimbabwe’s tax base, simplification of the tax collection regime, a reduction in tax avoidance and full monitoring of tax evasion by companies and individual.

The Independent 

VIOLENCE erupted on Wednesday last week at Dandi 5 gold mine in Matobo, Matabeleland South province, after people suspected to be from Harare invaded the mine.

The gang reportedly used machetes and unidentified weapons to drive out workers from the mine.

Confirming the incident, mine owner Ndodana Moyo told Southern Eye that: “The gang came all the way from Harare with fake papers claiming ownership of the mine. They claimed to be the rightful owners of the mine.

Moyo said they were reclaiming ownership of the mine following the skirmishes, adding that a similar incident happened in 2019 when another group of people tried to invade the mine.

Contacted for comment, Mines ministry deputy director Brian Mtewa said: “I am not aware of the issue, I am yet to receive anything.”

Matabeleland South police spokesperson Inspector Loveness Mangena also said she had not yet been notified about the incident.

“I will contact Matopo police to find out if there has been such a case recorded because normally, such cases would have been reported (already),” she said.

According to a report from the International Crisis Group, violence associated with Zimbabwe’s gold mining sector killed hundreds of people in 2019 and early 2020.

The violence stemmed from miners fighting over gold or gangs robbing miners at gunpoint.

Newsday

RAN Mines Private Limited, a gold asset that has been at the centre of a protracted dispute between Zimbabwean investors, lurched into fresh controversy last month after winning a High Court case giving it a nod to evict retrenched workers out of its compound.

The 123-year old Bindura-based operation closed in 1999.

However, it is being brought back to operation by investors led by leading human resources executive Jack Murehwa.

Fighting over the asset reached a tipping point late last year when G&P Industries said it was pressing ahead  with plans to extract its first bullion at the mine in 22 years.

Blackgate warned that sinking shafts at the operation was illegal until the government makes a determination over ownership of the mine, which hit headlines in 2020, when 30 artisanal miners perished under its flooded shafts.

Documents obtained by the Zimbabwe Independent indicated that on March 21, Munyeza escalated her battle to Chief Justice Luke Malaba, seeking his urgent intervention.

She has previously written to President Emmerson Mnangagwa, the Zimbabwe Anti-Corruption Commission (Zacc) and the Ministry of Mines and Mining Development seeking a resolution to the dispute.

But around the time she approached the chief justice, her rivals were moving to evict former workers out of its compound.

Rights groups and ruling Zanu PF estimates show that up to 500 families have been affected by the evictions, although the court case listed 18 representatives of the former workers.

“Despite demand, it is alleged the 18 defendants refused to vacate the mine houses,” High Court papers, seen by the Independent in a case filed by Blackgate, point out.

“The defendants (former workers) failed to discharge the onus upon them to show an entitlement to continue holding on to the houses.

“The defendants and all persons claiming occupation through them and of all other persons in use, possession and control of any part of the Ran Mine compound without the consent of Ran Mine shall forthwith vacate the compound,” High Court judge Justice Jacob Manzunzu ruled on March 7.

The ruling, which attracted a rebuke from the Zimbabwe Lawyers for Human Rights Organisation further states: “ Failing vacation, the Sheriff, with the assistance of the Zimbabwe Republic Police if necessary, is authorised to eject the defendants and all persons claiming occupation through them and of all other persons in use, possession and control of any part of the Ran Mine compound without consent of the plaintiff…”

But before the messenger of court moved to effect the court order, ruling Zanu PF officials are said to have negotiated for a grace period.

The former workers’ plan collapsed after former colleagues testified against them, saying the correct position was that they had been retrenched and paid a ZW$5 000 relocation package in 1999.

A tussle over houses played out as Blackgate mounted its appeal to Malaba.

“This (mining) is all happening under the supervision of the Ministry of Mines as they have allowed them to continue mining on and establishing a mining processing plant on the disputed claims,” Munyeza wrote in a letter to Malaba dated March 21, 2022.

“We still wonder how they accessed the permission and paperwork to construct a mining processing plant on disputed claims as well as how they are selling their gold output to Fidelity Printers and Refiners.

“Mr. Jackson Peterson Murehwa has been bragging that he has an “iron claw” on the Ministry of Mines and Mining Development and the Judiciary wrapped around his finger, which implies that he is undermining the judicial foundations in legislation enshrined in the constitution of Zimbabwe, which is in tandem to committing intentional malicious treason.

“The commencement and initialisation of these criminal case investigation proceedings were informed by over a decade long legal tug of war that has been characterised by relentless blatant acts of corruption, fraud, forgery, collusion and connivance between the Ministry of Mines and Mining Development and the 2nd and 3rd Respondents under HC CASE NO. 6425 and HC 4431/20 &SC 296/11.

“They have been using this purported allegiance to the Highest Office of the land in order to circumvent legislation stipulated in the Mines and Minerals Act for them to corruptly benefit from illegal ownership of the mining claims,” she alleged in the letter.

The chief justice turned down the request to intervene, while Murehwa had not responded to Blackgate’s allegations at the time of publishing.

“Regrettably the Office of the chief justice has no power to interfere in litigation pending before a court on behalf of one of the parties,” Malaba said in his response in a letter dated March 25, 2022.

“Further, the Constitution mandates all judicial officers independently apply the law, impartially, expeditiously and without fear, favour and prejudice.

“This is how the chief justice expects the matter to be dealt with by the respective court,” he said.

Contacted for comment, deputy Mines minister Polite Kambamura said: “Can you refer to the provincial mining director Mashonaland Central with regard to that, if there is a dispute”.

The independent