Mining ZimbabweLatest Mining News, Policy and Industry Updates

CEMENT imports into the country have more than doubled to 16 percent this year and the country’s leading cement producer, Pretoria Portland Cement (PPC) Zimbabwe says this is weighing its efforts to reach optimum capacity utilisation levels.

The company has an installed capacity of 1,4 million tonnes annually against a national demand of 1,3 million tonnes.

In an interview, PPC Zimbabwe managing director Mr Kelibone Masiyane said the level of cement imports into the country are worrisome as this restricts what they can produce for the market.

“If the market is saturated because we are bringing in imports, then it curtails our capacity utilisation.

“The cement that we should be making and selling locally and increasing our capacity utilisation, we are being affected by imports.

“We have seen some imports actually increasing and lately this year, they have gone to crazy levels where in the past there would be around seven to eight percent, but have more than doubled,” he said.

Mr Masiyane said together with other industry players they continue to lobby the Government to cease cement imports.

Lafarge, Sino, Livetouch and Pacstar are some of the cement producers in the country.

The imports, which are coming from neighbouring countries such as South Africa and Zambia, he said, largely involve some enterprising individuals and speculators while some of the cement is smuggled into Zimbabwe.
In 2017, PPC, which owns a clinker production plant in Colleen Bawn as well as a cement factory in Bulawayo, commissioned its second cement plant in Harare to augment output levels.

The two plants each have an installed capacity of 700 000 tonnes annually.

“As a company alone, before we start looking at competition from other players locally, we have got more than enough installed capacity to supply the entire country.

“There is no real reason for somebody to import cement from Zambia or South Africa,” said
Masiyane.

“We have also been lobbying against imports because we are investing locally and when you invest, as an investor you expect a return from that investment.

“Like now we built that plant in Harare and commissioned it in early 2017, if you look at it from a capacity utilisation point of view, it’s still running at not optimal levels because weare getting imports coming in.”

He said cement on the local market is not competitive when compared to the region, because of the high cost of production and import duties being levied when importing critical spares for the factories.

“In some sense, we always say cement is a logistics business and logistics accounts for almost 40 percent of our costs.

“Now you can imagine, especially for PPC, in terms of geographical dispersion where we have Collen Bawn in Gwanda, we have the Bulawayo plant then we have in Harare another plant.

“When you compare to neighbouring countries, sometimes just moving a tonne, we are probably three or so times more than neighbouring countries.

The cost of electricity coupled with import duties and some of our spares are quite high compared to these other countries,” he said.

In Zambia, a 50kg bag of cement ranges between US$6 and US$6,45 while in South Africa it averages between R85 and R99.

A survey carried out by Business Weekly early this week established that a 50 kg bag of cement in Harare and Chitungwiza averages between US$9 and US$10,50.

Subdued local cement supplies

A hardware shop at Makoni Shopping Centre in Chitungwiza which sells imported and local cement brands was selling Lafarge-produced brands at US$10,20 while imported brand manufactured by Dangote was selling at US$10.

“Right now we don’t have cement from PPC; two weeks ago we placed an order at PPC but they couldn’t deliver and only yesterday I asked them to reimburse me my money and no reasons have been given as to why they can’t supply.

“We are importing the Dangote-produced cement from Zambia through the formal channel,” said a shop attendant who preferred not to be named.

It also emerged that some hardwares in Harare such as Mohamed Mussa and Bhola did not have cement from PPC.

The shop attendants who spoke on condition of anonymity said they have gone for at least two weeks without cement from PPC.

“We have run out of cement from PPC and it’s been more than two weeks without supply. We don’t even know when supplies from PPC will resume, we don’t know the reasons behind the short supply,” said one of the shop attendants at Mahomed Mussa hardware situated at Orr Street.

Contacted for comment, Industry and Commerce Minister Dr Sekai Nzenza said, “Lafarge is down but has started producing.

“We have allowed imports to fill in the gap. PPC is aware of this development and cannot meet the gap created by inability to supply by Lafarge.

“We discussed that issue when we visited them and they said had the breakdown been foreseen, they could have upped their production.”

“We are limiting imports. Apparently, it’s the northern areas that have been importing more than the southern part of the country,” she said.

Business Weekly

THE Zimbabwe Safety Health and Environmental Council (Zimshec) is set to roll out extensive small-scale miners’ trainings on safety, health and environmental issues nationwide.

Launched last year, Zimshec is an organisation founded by small-scale and artisanal miners to promote occupational health and safety, environmentally friendly and sustainable mining practices as well as reduce the number of people trapped in mines due to poor mining practices.

Safety in mining is a key constituent in propelling the nation to the envisaged US$12 billion mining economy by 2023, as a result, the trainings are meant to assist the small-scale mining sector that has over the years been rocked by accidents which have led to massive loss of life.

Zimshec Deputy Executive Director Mr Philemon Mokuele told Sunday Business that the trainings are meant to raise awareness among artisanal and small miners on different aspects including occupational health and safety risks including how these can be addressed.

“Awareness campaigns on health and safety is one of the things Zimshec is doing. We are going to start the trainings any time soon but we cannot disclose the dates as yet as we are still finalizing some logistics with one of the universities, we signed a MoU with.”

Mr Mokuele who is also the Zimbabwe Miners Federation (ZMF) Matabeleland South provincial chairman said their trainings are meant to complement Government’s efforts, which has been conducting miners’ safety outreach programmes. These have been credited for the decline in mine related accidents during the rainy season.

The Sunday News

ZIMBABWE has missed its mineral production targets for the first two months of the year by about 25%, but authorities remain optimistic that it will meet a sectorial US$12 billion revenue contribution by 2023.

However, developments indicate achieving a US$12 billion mining economy by 2023 with current estimates of about US$5  billion from gold and another US$5 billion from the rest of the minerals is almost impossible.

Excluding gold, the country recorded sales of US$539 million cumulatively for January and February 2022, against a target of US$675 million, Minerals Marketing Corporation of Zimbabwe (MMCZ) general manager Tongai Muzenda told businessdigest in an interview.

“It’s nothing to worry about, it’s just a slow start to the year,” Muzenda said.

Although far below projections by about U$136 million, the figures are 2% above prior year and initiatives being implemented could have brought the sector back on target by the end of March, according to Muzenda.

“I think by the end of the quarter, which is the end of March, we should be able to catch-up and be on target. I hope. If that doesn’t happen, then we are confident we will be able to catch up in the second quarter,” he said.

Collection and reconciliation of statistics for the month of March is ongoing.

Muzenda said the sector was benefiting from firming up of prices on the global market for most minerals.

“In terms of prices, they have gone up for almost all minerals, be it PGMs which is the biggest contributor. Be it chrome ore or ferrochrome, the prices have gone up a little bit and also coke and coal,” he said.

Muzenda said the sector was on course to hit the US$12 billion target for 2023.

Mining, agriculture, infrastructure and manufacturing are at the centre of President Emmerson Mnangagwa’s ambitious economic turnaround strategy.

“We are doing fine towards the US$12  billion mark. This year, we anticipate doing up to US$5 billion by the end of year. That is our target in terms of our strategic planning and this is excluding gold,” he said.

Including gold, based on production targets of US$5 billion worth of the yellow metal in 2023, the sector is this year expected to hit around US$10 billion.

However, a close source in the ministry of Mines and Mining Development said US$8 billion was a realistic target for the sector this year.

The extractive sector has over the years suffered from a myriad of challenges including a perennial image crisis that has negatively impacted foreign investment.

Mining also suffered from an energy crisis that has resulted in industry going for more than 12 hours without power.

As a result, businesses have resorted to diesel powered generators, which is a nightmare for the energy intensive mining industry after recent fuel price increases.

Solar investments are proving costly and not within the reach of all players.

Zimbabwe’s mining sector has also raised concern about high labour costs, high utility costs, multiple layers of taxes and foreign currency retention rules introduced by the central bank as the economy remains stuck in a foreign currency crisis.

Zimbabwe’s US$12 billion target from the mining sector is also affected by smuggling, especiallyof gold and diamonds.

The country’s major gold buyer, Fidelity Printers and Refiners has for years failed to pay for deliveries timeously, leaving the market open to cartels of illegal buyers who pay cash and often smuggle the precious mineral.

The Independent 

Zimbabwe’s mining industry is engaging the government over the volatile operating environment which has pushed most of the resources firms to the brink.

The multibillion dollar industry, projected to grow by 8% this year, is the country’s largest foreign currency earner, accounting for more than 70% of forex earnings.

“We are engaging the government on various issues affecting us which range from volatile exchange rate which pushes up cost of doing business, forex retention levels and taxation among a plethora of challenges,” the Chamber of Mines of Zimbabwe CEO, Isaac Kwesu told Business Times this week.

“Government should work closely with the mining industry to address structural bottlenecks weighing down the performance of the mining  sector and unlock the full potential of the industry. This will maximise its contribution to the socio-economic development of the country.”

Kwesu said a low retention threshold of 60% was adversely impacting the sector.

“The emerging demands have seen mining companies utilising between 15% and 30% of their export proceeds to meet local taxes, levies and electricity payments,” he said.

“The remaining foreign currency is insufficient to fund their operations. Mining houses are losing more than 50% of the value of the surrendered portion of export proceeds that is liquidated at the official auction market rate. This situation is resulting in loss to mining companies translating to at least 20% of gross revenue.”

Kwesu said the electricity supply remained erratic and this has  disrupted production despite miners paying bills in foreign currency.

He said the shortages and delays in accessing foreign currency to import critical inputs and supplies is affecting production, leading to the inability to restock critical raw materials and equipment.  This impacted on production.

The mining sector, he said, was facing huge challenges on the rising cost of doing business due to the volatile exchange rate.

“Given that  we are only paying 50% of our statutory obligation in local currency on the liquidated 40% of the total revenue, this obviously impacts severely on costs and the viability of mining operations,” Kwesu said.

In its latest report, the Chamber of Mines said the sector requires about  US$10bn in new capital in the next five years to ramp up production.

Despite  these severe headwinds  the mining sector is confronted with, some mining houses are undertaking projects worth over US$2,1bn to boost production.

These include Zimplats, Unki, Mimosa and Caledonia.

“Various projects in the mining sector are expected to boost the industry’s output in the outlook following investments in various minerals,”  the Chamber of Mines of Zimbabwe  said in its latest report.

Zimplats approved a  capital investment strategy with a budget of US$1.8bn  to be implemented over 10 years beginning in 2021.

About US$1.2bn  has already  been approved for implementation.

“These projects include maintaining current production levels through mine replacements and upgrades worth US$516m, expanding production levels through growth projects, including the development of a new Mupani Mine, the replacement production source for Rukodzi and Ngwarati mines which will deplete in 2022 and 2025 respectively and Bimha Mine redevelopment.”

Unki Mine  has since completed the concentrator expansion project which has resulted in a steady production ramp-up.

The project will result in increased concentrator capacity to 210,000 tonnes per month from 179,000 tonnes per month currently being processed.

Unki is also planning to expand its current 8.5 MW smelter which has a capacity of smelting 62-kilo tonne per annum and will be upgraded to 12.5 MW during 2022 and 2023.

Mimosa Mining is also  carrying out an expansion project at North Hill to increase the life of mine as well as contribute towards the attainment of critical mass for local beneficiation.

The company is also carrying out various projects to optimise its operations including a concentrate handling facility and reported a US$40m expenditure.

Great Dyke Investments (GDI) completed the first boxcut and excavation work. Once completed, GDI is expected to produce 3.45m tonnes of PGM ore per year at full throttle.

Karo has completed an exploration and resource delineation and the project is now at the implementation stage. The project is expected to mine approximately 14.4 Mtpa of the run of mine ore.Bravura carried out exploration and feasibility studies in 2021 and is planning to go into mine construction in 2022 and production to start in 2023.

Todal is currently undertaking resource estimation, aeromagnetic survey and drilling. Metallurgical testworks on communication, variability and flotation are expected to be finished by 2022 and a pilot plant to be built by 2023.

Caledonia Mine invested approximately US$67m in its central shaft at Blanket Mine which was commissioned in March 2021 and production target of 80,000 ounces of gold is expected from 2022 and beyond with costs expected to fall on the back of economies of scale.

Freda Rebecca is ramping up production of both open pit and underground resources with an expected increase in production of up to 8,000 ounces in 2022.

How Mine injected US$5m on a shaft sinking project which opened up new mining areas.

Production ramp-up and exploration activities around the mine with an anticipated production increase of around 13% in 2022.

RioZim is finalising its US$17m BIOX Plant Project before the end of 2021 and output from the plant will materialise in 2022.

Gold production is anticipated at 140 kilogrammes per month during the first phase of the project and 200 kilograms per month after completion of Phase 2. Pan African Mining is expanding the dump retractor.

Eureka Gold Mine is resuming operations. Its plant is expected to boost gold production with a monthly average production of 115 kg per month.

Golden Reef Mining is ramping up production at all their mines to result in an increase in monthly gold output of 60 kg/ month, from about 20 kg/ month.

Turk Mine  is upgrading its main shaft to increase annual gold production by 140 kg and planning to implement a heap leach project to tap into some surface resources and add to gold output in 2022.

Golden Quarry Mine reopening and production ramp-up is underway with an expected output of 12kg per month by 2022 and dewatering of the mine is underway.

Business Times

FOUNDRY industry operators are crying foul over the increase in coke prices, which they say is a threat to the viability of their operations.

Globally, the price of coke has gone up and the local producers have followed suit.

The situation is being worsened by the continuing Russian-Ukraine war, which has seen energy prices jump in the last two months, industry experts say.

Zimbabwe Institute of Foundries (ZIF) president, Mr Itai Zaba, said coke prices have risen by about 30 percent to US$365 per tonne effective 2 April 2022 and this affects the local foundry industry operations.

Given that coke is a major input, the jump in prices has an effect of pushing production costs up.

Mr Zaba said they were already grappling with tight competition from imported products from neighbouring countries and the coke prices will worsen their situation.

“The coke price increase will slow down foundry growth and affect Government’s efforts to promote import substitution,” he said.

Mr Zaba said many foundries are operating at around 25 percent capacity utilisation down
from about 40 percent last year.

ZIF has said it is committed to working closely with the Government to reduce production costs and ensure competitive pricing, which is critical in driving exports and substituting imports.

The foundry industry had set a target to increase capacity utilisation from 40 to 80 percent by the end of this year.

Contacted for comment, Engineer Victor Rakabopa, who is into coal and coke mining, said coke price increase was linked to the Russia-Ukraine war.

He also said the increase in demand for coal products from this region has also significantly contributed to price increase.

Mr Zaba, however, said the coke price increase could not be attributed to the Russia-Ukraine war because coke is a local product .

“We understand that the fuel prices have gone up by about 20 percent but this cannot justify the 30 percent coke price hike,” he said.

The Chronicle

ZICOSTEEL board chair Martin Manuhwa says Kuvimba Mining House’s undertaking to revive Ziscosteel is the best deal the former steel-making company has had.

Kuvimba, linked to tycoon Kuda Tagwirei, is set to inject about US$1 billion towards the resuscitation of Ziscosteel over a three year period.

The former integrated steelworks giant closed shop nearly two decades as a result of poor administration and corrupttion.

“We are happy that the Kuvimba deal in general is not taking any equity and it has a sunset clause that comes after three and a half years when the contract would have lapsed,” Manuhwa said.

“After their exit, the whole strategy is to make sure that Zisco’s balance sheet is strong enough for us to rebuild our steel plant and go back to our glory days.”

Ziscosteel board chairman Martin Manuhwa

Manuhwa said the deal was going to leave them in a position to negotiate with investors from a strong position as compared to their historical, desperate hunt for investors.

“This is also good for us to be strong enough to attract other investors as a very strong entity, if we had done that at this very moment it was not going to be a win-win situation because the investor would have brought everything and once one brings everything they can also take everything,” he said.

NewZimbabwe

Diamond production is expected to rise 19% this year to 5m carats  from 4,2m  achieved last year due to the  opening up of the world economies following the slowing down of the Covid-19 pandemic.

The improvement in production is also premised on the back of various expansion projects that diamond mining companies are undertaking.

The Chamber of Mines of Zimbabwe CEO, Isaac Kwesu (pictured), told Business Times that all diamond mining houses are expected to ramp up production this year following the expected completion of various projects which will improve the companies’ capacity.

“We are expecting diamond output at around 5m carats in 2022 from 4,2m carats in 2021 with various projects expected to boost diamond output in the outlook,” Kwesu said.

Last year, out of the 4,2m carats, the country’s largest diamond miner Zimbabwe Consolidated Diamond Company (ZCDC) contributed 3,78m carats.

Murowa, an associate of RioZim, which contributed about 10% of the total output, associated its reduced output in 2021 with low-grade ores.

ZCDC commissioned a 450 tonnes per hour metallurgical processing plant.

The mining company is expanding operations from alluvial operations to conglomerate ore processing.

Murowa Diamonds expansion project is almost complete and is expected to be commissioned  this quarter.

Murowa processing capacity will grow to 500 000 tonnes per month from 190 000 tonnes per month.

ZCDC/ALROSA joint venture agreement has begun the exploration and establishment of a diamond washing plant with a capacity of 1 tonne per hour of ore.

Anjin diamond has reopened its diamond mine and is expected to produce up to 12m carats by 2025.

ZCDC resumed its monthly auction in April, ending an eight-month hiatus caused by Covid-19, after a record year of production in 2021.

These auctions are held monthly.

The company projects a further increase in output this year.

“For 2022, we are set to not only achieve, but exceed our diamond production target by more than 40% when compared to the 2021 baseline target,” ZCDC chief executive officer, Mark Mabhudhu said.

He said  the Russia-Ukraine conflict has “far-reaching consequences” for many businesses.

Russia’s Alrosa, the world’s biggest producer which is currently prospecting for diamonds in Zimbabwe, is one of the Russian companies placed under Western sanctions over the Ukraine conflict.

This may push for an increased demand for ZCDC’s own stones.

The country’s diamonds have faced restrictions in the USA, which is the key gem market.

In 2019, the US held a shipment of Zimbabwean diamonds claiming they had been produced through forced labour.

Furthermore, Tiffany & Co, the leading American luxury jeweller, also stopped stocking Zimbabwean diamonds over human rights concerns.

Buyers for this  month’s sale are drawn from various areas such as  Dubai, Israel, India and South Africa.

According to experts, the resumption of the auction sales is expected to provide a litmus test on the viability of the country’s diamond value chain.

But Mabhudhu said the diamond mining industry has its fair share in terms of growth such that its sustainability hinges on the ability of the auction to generate lucrative earnings from the potential buyers across the globe.

Business Times

The Government is impressed with the rate of compliance by companies mining black granite in Mutoko, Mashonaland East province to undertake Environmental Impact Assessment (EIA) processes.
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The EIA is a legal requirement in Zimbabwe in terms of the Environmental Management Act as read with Statutory Instrument 7 of 2007.

It is a tool used to define, quantify and evaluate the potential and known impacts of human activities on ecosystems at the earliest stage of project development.

In Zimbabwe, projects that require EIAs include mining, quarrying and housing developments.

Environmental Management Agency (EMA) Mashonaland East education and publicity officer Astus Mabwe told New Ziana that the regular inspections that they made at the mining sites in the district were spurring the compliance.

At least 10 companies extract the black granite in Mutoko, namely Natural Stone, CRG, Zimbabwe International Quarry, Ilford Red and Enterprises.

“Granite mining companies in Mutoko have been forthcoming in terms of compliance with the EMA Act. All of the companies operating in the district now have EIA certificates and all relevant licenses that are issued by the agency in terms of the Act. As EMA, we continue to do monitoring inspection to check on any deviations from license conditions,” Mabwe said.

It is estimated that 150 000 tonnes of black granite are produced annually in Zimbabwe, with Mutoko contributing 75 percent of that output, which is exported to countries such as China, the United States of America, the United Kingdom, South Africa and Germany.

Concerns have, however, been raised at the failure by players in the industry to add value to the stone before exporting it, for the country to earn increased revenue.

Meanwhile, Mabwe said the agency was concerned by artisanal miners who had become a menace in some parts of the province, particularly in Mudzi, Uzumba-Maramba-Pfungwe and Goromonzi districts.

“That remains a challenge and we routinely monitor their activities closely as they negatively contribute to environmental degradation. Some scavenge for gold as syndicates while some do it individually. They play hide and seek games with us but we continue to engage them together with our stakeholders such as the police and traditional leaders,” he said.

The government plans to register all artisanal miners in the country as part of efforts to formalize their operations, curb illegal gold dealing as well as protect the environment.

NewZiana

RioZim, which had been banking on Chinese financing to build a major coal-fired power plant, says it is now looking for alternative backers as China pulls back on funding such projects overseas.

The effort by RioZim, one of Zimbabwe’s biggest mining and energy companies, reflects how China’s recent U-turn on foreign coal financing is forcing developing nations across Africa and Asia to rethink their energy plans. China, which had been a top funder of coal power projects around the globe, announced in September it would not build new coal projects abroad as part of efforts to curb future carbon emissions.

Plans for the multi-billion dollar Sengwa power plant in northwest Zimbabwe involve more than doubling the country’s current electricity capacity.

RioZim’s energy division, Rio Energy, had been hoping for funding for the planned plant and associated coal mine from Chinese banks Industrial and Commercial Bank of China (ICBC) and China Minsheng Banking Corporation Ltd.

Now, Rio Energy is considering alternative financing plans. “We are still in the market to fund the project and we will work with all possible funders, including the Chinese,” parent RioZim says.

The company said another option under consideration is to transform the project to a gas-powered plant, but that idea is “subject to the outcome of feasibility studies” and no time frame for those has been set.

RioZim told Reuters that ICBC and Minsheng Bank “came in to play a supporting role” but that it can’t comment on the status of their involvement because it doesn’t have a direct relationship with the companies. Chinese bank financing for coal power plants overseas has often been arranged to support Chinese construction companies, which then enter into building contracts with the company planning the power plant.

ICBC told representatives of environmental non-governmental organisations in a June 2021 meeting that the bank would no longer finance the Sengwa project, according to two people who attended the meeting.

Plans for another large coal power project in Zimbabwe, known as Lusulu, are also up in the air, according to PER Lusulu Power, the Harare-based energy company behind the plant which had been planning on Chinese backing.

A Zimbabwe government spokesperson declined to comment on the status of either project. He said Zimbabwe has the right to exploit its coal resources if needed and would not "sacrifice growth prospects on the altar of arguments to do with the environment."

China’s foreign ministry didn’t respond to questions about the status of the funding of the Sengwa and Lusulu projects. But it said Beijing will support developing countries in shifting to greener energy.

The foreign ministry added that China, which has close economic and diplomatic ties with Harare, “will increase its support to Zimbabwe’s development of renewable energy power projects, and help Zimbabwe’s sustainable development.”

HANGING IN THE BALANCE

Globally, some US$63 billion of Chinese state financing across 57 projects could be at risk from China’s withdrawal from coal financing overseas, according to Global Energy Monitor. The pullback could cut Africa’s pipeline of coal power projects by two thirds to 3.6 gigawatts (GW), estimates think tank E3G.

In Zimbabwe, less than half the population has access to electricity. The country has been betting on coal-fired power to address chronic electricity shortages and create jobs.

RioZim has talked about building the Sengwa plant for more than a decade. Plans include adding 2.8 gigawatts (GW) to the grid and restarting the adjacent coal mine, which has been closed since 2014. Currently, Zimbabwe has the capacity to generate around 2.3 GW, which comes mostly from a large hydroelectric power plant but also four coal-fired power stations.

___

The planned Sengwa plant, near the town of Gokwe, would create 1,100 permanent jobs and nearly four times as many temporary construction jobs, according to Rio Energy. Sedeya Jetro, head of a local primary school, said the jobs would enable parents to pay school fees and “mean a lot to this community.”

Rio Energy told Reuters that ICBC had in 2019 provided an expression of interest – or non-binding commitment – to a Chinese construction company to fund the first phase of the Sengwa project. Neither the construction company, PowerChina International Engineering Co., nor its parent, Power Construction Corporation of China, responded to requests for comment.

Minsheng Bank also provided a non-binding commitment to RioZim to fund a second phase of the Sengwa project, according to Rio Energy and an August 2020 letter of interest from Minsheng Bank that Reuters reviewed. The pledge expired in February 2021, according to the letter.

A Minsheng Bank official who signed the document said in an emailed response to Reuters that the letter of interest was "a trade secret" and didn't respond to questions about funding plans. Spokespeople for Minsheng Bank and ICBC didn't respond to requests for comment.

Rio Energy was hoping for US$3.4 billion of funding for the second phase of the power plant, according to a draft contract with a unit of engineering and construction company China Gezhouba Group Corporation (CGGC). The contract, which was reviewed by Reuters, was dated November 2020 and drafted by both companies.

In response to questions about the planned Sengwa plant, CGGC’s parent company China Energy Engineering Corporation told Reuters that a subsidiary signed a construction cooperation agreement in 2020. “There is no progress on this project currently,” it said, citing a lack of financing commitments.

PER Lusulu Power plans to build the 2.1 GW Lusulu plant in Zimbabwe’s western province of Matabeleland North. It announced in 2015 that Chinese financial institutions had agreed to fund its construction, subject to conditions. PER Lusulu Power’s website says the company entered into a construction contract with China State Construction Engineering Corporation, which would secure debt finance from Bank of China.

PER Lusulu Power had also sought financing of up to $2 billion for the project from ICBC, according to extracts of a term sheet dated August 2020 viewed by Reuters. The term sheet is a non-binding agreement setting out the terms and conditions for an investment. It was unsigned, and was prepared by ICBC, according to a person familiar with the document.

Bank of China said in a statement that it doesn’t have any electricity projects in Zimbabwe and has no plans to develop any. ICBC and China State Construction Engineering did not respond to questions about the Lusulu project.

ECONOMIC DEVELOPMENT

One Chinese-funded project that is progressing is in the northwestern town of Hwange, where construction was already well underway when China announced its coal-funding freeze. The project involves the expansion of an existing coal-power plant and has been financed by a loan of roughly US$1 billion from Export-Import Bank of China, the Zimbabwe government has said. Zimbabwe Power Company, which manages the plant, said in a November statement that the expansion “continues to progress well” and was more than two thirds complete. China’s EximBank didn’t respond to a request for comment.

The project is expected to increase employment by nearly doubling the current 2,853-strong workforce, while also sustaining the town’s coal-mining industry, which employs thousands more people. The Zimbabwean government spokesperson said the country will be much better placed to meet electricity demand once the expansion – which is due to add 600 megawatts – is complete.

Renewable power advocates in Africa and elsewhere say China’s pullback from coal power provides an opportunity to clean up. Zimbabwe is expanding its plans for generating renewable energy, such as solar power, but such projects can require fewer permanent employees than coal, making them less attractive for governments keen to generate employment.

Sydney Gata, executive chairman of the Zimbabwe Electricity Supply Authority, said that an instant switch to solar and wind isn’t feasible given the scale of the country’s power needs.

“Renewables are not an immediate plan B for Zimbabwe,” he said.

Newzwire

Zimbabwe’s mining industry sees a funding shortfall of US$10 billion over the next five years, a challenge compounded by erratic power supplies and exchange-rate volatility.

While Zimbabwe has the world’s third-biggest reserves of platinum-group metals, plus gold, diamond and chrome mines, development has been stymied by economic instability, which affected foreign direct investment.

While mining is projected to generate earnings of US$5,5 billion this year, it faces a number of headwinds, the country’s Chamber of Mines of Zimbabwe said in its latest commodity outlook report.

The Government of Zimbabwe is targeting to grow the country’s mining sector to a US$12 billion industry by 2023, a significant milestone towards the country’s Vision of upper middle income status by 2030.

Mining, currently riding high amid a surge in global prices, is expected to anchor short to medium term growth for the mineral rich Southern African country, which has more than 40 mineral occurrences.

Last year, Zimbabwe announced rules forcing exporters to transfer 40 percent of their foreign currency earnings to the central bank, instead of 30 percent. That’s exchanged into local currency at little more than half the parallel market rate.

Those foreign-exchange losses pose a risk to the mining industry, said the chamber, a lobby group that represents companies including Impala Platinum Holdings Ltd. and Anglo American Platinum Ltd.

“Key risks to the Zimbabwe mining sector outlook include inadequate foreign exchange allocations to fund operational requirements and expansion projects,” the chamber said.

While the outlook for steel makers remains cloudy, the weakening of the US dollar is propping up global commodity prices including metals as well as crude oil.

When the dollar weakens, the same amount of any commodity costs more in terms of dollars. Therefore, prices increase. And, the stocks of metal companies are mirroring that optimism. — Bloomberg.