Mining ZimbabweLatest Mining News, Policy and Industry Updates

LAFARGE Cement Zimbabwe says it continues to implement its US$25 million investment programme which will see the company completing the construction of a vertical cement mill (VCM) early next year.

As part of the US$25 million capital expenditure initiative, the cement producer in April this year launched its US$2,8 million Dry Mortars (DMO) project, a project expected to improve the firm’s manufacturing capacity of dry mortar products from 7 000 tonnes to 100 000 tonnes per annum.

At present, aggregate national demand for dry mortars is 100 000 tonnes, including imports from the region.

With the new plant, Lafarge is now able to meet the national demand and contribute to the country through import substitution, and thus saving millions in foreign currency.

The firm said the US$25 million capital expenditure project is a three-pronged investment plan now in its final phase of implementation.

This follows the successful installation of alternative power infrastructure in 2019 and the successful completion of the automated Dry Mortars Plant.

“The business continues with the implementation of the previously announced US$25 million capital expansion programme.

“The third investment project is the installation of the VCM, earmarked to double cement milling capacity.

“The supply contract was signed in August 2020 and the manufacturing of the plant commenced the following month,” said the company in a statement accompanying financial results for the year ended December 31, 2020.

“Civil works for the VCM have since started and expected completion date for the project is February 2022.”

In the outlook, Lafarge said the protracted impact of the Covid-19 pandemic on the business environment is anticipated to remain for the greater part of the year, given that 2021 began with yet another Covid-19-induced lockdown.

The firm, which is a subsidiary of Switzerland-based, Lafarge-Holcim Group, said the pandemic accelerated a number of trends globally that have also been seen in the Zimbabwean market.

In this context, the cement producer said it will continue to adapt its business strategy so as to thrive in the changing environment.

During the year under review, volumes in the Dry Mortars business grew by 115 percent compared to the prior year.

“This is attributed to the relaunch of the Supagrow and SupaFix range backed by active market sensitisation of the products which has led to wider product adoption.

“The gross profit margins grew by 12,4 percent to 60,6 percent (53,9 percent: 2019).

“The recognition and realisation of the RBZ (Reserve Bank of Zimbabwe) instruments improved the company’s overall operating costs through reduction of foreign currency exchange losses ZWL$336 million (2019: ZWL$3,5 billion),” it said.

A combination of revenue growth, reduced costs and reduction in foreign exchange losses resulted in the company turning an operating profit of $1,9 billion compared to prior year loss of $2,7 billion.

The firm’s net monetary position during the year under review remained favourable in inflation terms which resulted in an increase in the net monetary gain to $406 million (2019: $759 million) culminating in a profit for the year of $3,1 billion (2019: loss $3,5 billion). 

The Chronicle

A 22-year-old Masvingo man died after he fell into a disused shaft at Wanderer Mine in Shurugwi Saturday.

The deceased, Tinashe Makusha of Hwede Village under Chief Zimuto in Masvingo was walking from Vital Tuckshop in Shurugwi when he slipped and fell into a shaft about 60 meters deep.

Midlands province police spokesperson Emmanuel Mahoko confirmed the tragedy.

“Two mineworkers who were in another shaft heard the noise and suspected that a neighbouring mine was collapsing,” Midlands province police spokesperson Emmanuel Mahoko told NewZimbabwe.com.

“They later checked and discovered Makusha’s body at the bottom of the shaft. The matter was reported to the police who attended the scene and retrieved the body,” Mahoko said.

He said according to mining regulations, miners are required to rehabilitate or cover disused shafts and also fence off their working areas, tunnels, and shafts to guard against people and animals falling in.

“On the other hand, the public should report whenever they discover dangerous shafts to the Mines Ministry for corrective measures to be put in place. People should also desist from entering disused mines as they may be affected by dangerous gases,” Mahoko said.

Gold-rich Shurugwi district is littered with unprotected shafts left open by illegal miners after panning for the precious mineral in the area.

Late payments by the state entity, Fidelity Printers and Refiners (FPR) have been leading Artisanal and Small-scale Miners (ASM) to shun the former leading them to turn to cash-ready alternative markets.

This previous week, miners complained that the sole gold buyer was taking over a week to pay gold producers making it unfavorable for them to submit their gold to the state entity.

“Fidelity is letting us down. You find that you have challenges at the mine that need urgent attention like broken pumps, consumables like explosives, diesel for generators. You run to Fidelity to sell your gold only to be told there is no money). We cannot afford to stop operations that why the black market seems to be a better alternative because you get instant cash meaning no downtime,” said a miner who requested anonymity.

Cash on delivery is one aspect the government needs to get right to get more artisanal and small-scale gold miners to submit their bullion to the state entity. Timely payments will complement the recent gold buying price hike that was resoundingly welcomed by miners which may see President Mnangagwa’s 4 billion dollar mining industry being reached before 2023.

Analysts for years have been recommending the liberalization of the industry to as is the case in many other gold-producing countries.

In South Africa for example Rand Refinery is owned by five large gold mining companies, Anglogold Ashanti, Gold Fields, Harmony, Sibanye Gold, and DRDGOLD. AngloGold Ashanti owns 42.41% of Rand Refinery shares, Sibanye Gold owns 33.15%, DRD controls 11.3%, Harmony holds 10.38%, and Gold Fields holds a relatively small 2.76%.

FPR which is currently going through an unbundling phase will be split into two business entities, that is (i) Gold refining and (ii) Printing and Minting.

According to the Reserve Bank of Zimbabwe, “the unbundling of FPR is designed to partially privatise the gold refining business by allowing private players to acquire a stake therein and in the process secure and endear the private sector’s interests in the production and marketing of gold in Zimbabwe. By being part of the decision-making process on gold trading, it is expected that the gold producers’ compliance levels in the trading of gold will significantly increase. Accordingly, the Bank shall retain 40% shareholding in FPR and dispose of 60% shareholding to both the large-scale and smallscale gold producers.

“Using a three-year average delivery of gold to FPR, the Bank will offer 50% shareholding in FPR to the large-scale gold producers, 3% to major FPR gold buying agents and a balance of 7% to the small scale producers through their representative bodies. The Bank shall continue to have 100% equity in the printing and minting business for
national security reasons,” the Reserve Bank of Zimbabwe’s statement concluded.

Will unbundling solve the late payment challenge

Three Zimbabwean men and a South African national have been arrested by police in Limpopo province who found them with three truckloads of chrome believed to have been illegally mined.

Limpopo provincial police spokesperson Brigadier Motlafela Mojapelo said the four were arrested on Tuesday night along the R37 road in Apel policing area.

He said Lloyd Sithole (32), Moses Nemanganda (37), and Wilton Haruzi (34) all Zimbabweans and a local man, Joseph Hlongwane (23) will soon appear at the Sekhukhune Magistrate court charged for illegal mining.

“The determination of members of the South African Police Service in Limpopo to eradicate activities of illegal mining, led to the arrest of four suspects during disruptive operations that were conducted by members of Public Order Policing on Tuesday night along the R37 road in the Apel policing area,” said Brig Mojapelo.

“The members spotted three trucks along this road and pulled them over. The trucks were found with loads of suspected unprocessed chrome and were all confiscated. The four suspects were then apprehended”.

The value of the chrome is yet to be ascertained.

Limpopo’s Provincial police commander Lieutenant General Thembi Hadebe said the latest arrest would go a long way in eradicating illegal mining activities in the province.