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Aluminum price streaks to record on fears logistics issues will hit supply

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Aluminum prices bolted to a fresh record peak on Wednesday as investors worried that logistics difficulties would block metals supplies due to tough sanctions on major producer Russia.

Three-month aluminum on the London Metal Exchange surged to a record of $3,552 a tonne before paring gains to trade at $3,532 by 1100 GMT, up 1.6%.

Aluminum has soared by 37% over the past 2-1/2 months, initially on weaker output due to power issues, and recently has hit successive record highs after Russia’s invasion of Ukraine.

Aluminum price.

“We’re now seeing the second round effects from the sanctions,” said analyst Daniel Briesemann at Commerzbank in Frankfurt.

“Logistics issues will get even worse and supply problems are on the cards right now.”

Briesemann said he was in the midst of upgrading his metals forecasts and added that he would not be surprised to see aluminum touch $4,000 a tonne.

Sanctions by Western nations have prompted the world’s three biggest container lines to suspend cargo shipments to and from Russia at a time when aluminum inventories are low.

Stocks of aluminum in LME-registered warehouses have more than halved over the past 12 months to 809,750 tonnes versus nearly 2 million tonnes in March last year.

Russia produces about 6% of the world’s aluminum and accounts for about 7% of global nickel mine supplies. It is also a major producer of natural gas used to generate electricity.

Reuters (By Eric Onstad; Editing by Aditya Soni)

Muzarabani project fires up villagers’ imagination

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The rains may have halted progress on the ongoing gas and oil exploration project in Muzarabani, Mashonaland Central, but it has not dampened the mood and expectations of villagers in the district.

Never has a project impacted the imagination of villagers the way the Invictus oil and gas exploration project in the Zambezi Valley has.

Invictus, the Australian firm, has been conducting preliminary tests in Muzarabani District of Mashonaland Central in preparation for drilling the first exploration well before June 2022.

In the early 1990s, Mobil undertook the first oil explorations in the Zambezi Valley — of which Muzarabani is part — and reportedly found gas, but the gas remained unexploited.

Subsequent reprocessing of the Mobil data and enlisting of the latest technology point to Muzarabani hosting significant deposits of petroleum oil and gas.

Ongoing work will, in the next few months, be expected to add clarity to the data, the upcoming drilling programme and the way forward.

Invictus, the company undertaking the exploration work, says in the meantime, it is focusing on delivering growth and fostering relationships with stakeholders and host communities.

Villagers note that Mobil’s gas and oil exploration stretching from Hurungwe and Chirundu lasted three years in the early 1990s before throwing in the towel, although concluding that there was “nearly “100 percent potential of gas and a high possibility of oil occurrence in the  Zambezi Valley.

The Chairman of the Muzarabani Rural District Council (MRDC), Alderman Ashton Chiweshe, confirms that the expectations are high, adding: “We expect a drastic improvement in the fortunes and lifestyles of the people in Muzarabani first, and secondly in the whole of Mashonaland Central, as the host province of the project.

“We expect development. As we speak, right now there is engagement of locals in such things as bush clearance and security to safeguard the exploration equipment. The people involved in these processes are locals,” he explains.

In the long run, he says, the expectation is that this is going to be a “megaproject”.

From the perspective of villagers in the district, the expectation is that once it takes off, there is going to be “total transformation” of the district and the project will recruit more locals required for various stages of the Invictus project.

As the project progresses and more people are recruited, accommodation will be required, he explains, and this will likely result in the growth and expansion of both Centenary and Muzarabani. For example, he points out, there could be more banking services, and certainly more shops going up, translating into improvement and development of the district, the two centres and the whole Mashonaland Central province.

He says: “I think there will be a lot that will happen.”

Generally, there is appreciation of the way that Invictus has gone about in undertaking its work in Muzarabani because there are constant consultations and engagements with the locals, he observes, explaining that he has attended some of the Invictus activities.

A case in point is that while Muzarabani has 29 wards, Invictus is active in 11 of these, where they expect to drill boreholes, once the rainy season is over.

The attendant improvement of the road infrastructure is part of the Government’s contribution under the Emergency Road Rehabilitation Project (ERRP).

Part of what informs the heightened expectations of the villagers in Muzarabani is their observation of how local businesses have responded to the ongoing exploration work. There is growing interest and enquiries for new businesses opportunities in the district and, villagers conclude the enquiries pointing to a possible boom of the district and province.

Pointing out the improved main road, villagers say this act will open up more areas and, in the process stimulate economic and social activities and development.

ErizaMariba, says a good road network, opens up access to markets for agricultural producers to move their crops, while also allowing them to purchase inputs. A good road network makes travel and movement of goods much easier.

Councillor Raphael Maruziva, who is in charge of the Social Services Committee of the Muzarabani Rural District Council, was part of the Mobil exploration workforce in the 1990s.

He believes the benefits of the Invictus project are that it will generate sizable revenue, create jobs and business opportunities, as well as bring new roads and access to water and power to rural areas.

Projects such as the one being spearheaded by Invictus have the potential to stimulate economic growth, reduce poverty, and raise living standards.

“We anticipate improvements in how the people here live. For example, during the first phase of the current exploration, people ended up getting employment.

“Some of the locals employed on the project ended up buying properties at Muzarabani Business Centre.”

He points out that among the immediate benefits of the exploration project are that boreholes will be drilled for the benefit of the villagers in both Mbire District and Muzarabani, while jobs have been created.

For village health worker, Kumbirai Ndhlovu, you would think Invictus has already confirmed as positive, the findings of the exploration. She is excitement personified, when it comes to what the project will mean for Muzarabani.

In other countries where gas and oil have been discovered these have generated employment, given a boost to local businesses, installed and maintained new infrastructure, while offering training and skills transfer to locals. 

New Zian

 

Mine rescue mission turns tragic

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A 22-YEAR-OLD Domboshava man was hospitalised after he suffocated trying to rescue a colleague trapped in a gold mine shaft.

Ngoni Sika (53) died in the mineshaft while Peter Mudyiwa (22), who tried to rescue him, had to be retrieved by his colleagues while unconscious.

Mashonaland East provincial police spokesperson Inspector Simon Chazovachii confirmed the incident.

“We urge the public or mine owners to follow lawful and approved mining practices during their operations. Mines should be licensed and observe safety rules and regulations,” he said.

According to police, on February 26, at around 11am, Sika was working in a shaft at Nhokwara Magigi Mine in Domboshava with colleagues Peter Chingomo (41), Mudyiwa (22) and Tinei Tom (37).

Sika reportedly descended to the 30m shaft using a rope tied around his waist.

The deceased reportedly shouted for help, telling his colleagues that there was a gas leak in the shaft and he was having difficulty breathing.

Mudyiwa reportedly went down the shaft using the same rope, but was also affected by the gas and fell unconscious.

The other workers managed to retrieve the pair, but Sika was already dead.

A report was made to the police in Chinamora who attended the scene before ferrying the deceased’s body to Makumbe Hospital mortuary for post-mortem.

Mudyiwa is admitted to the same institution.

 

 

NewsDay

52 families face eviction to allow coal mining

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A TOTAL of 52 families in Lubimbi, Binga, Matabeleland North are facing eviction after Hwange Colliery Company got a grant to extract coal from the area.

The community was already facing eviction to pave way for the construction of the Gwayi-Shangani Dam.

Lubimbi ward councillor, Chrispen Munkuli confirmed the developments.

“As a community, we have discussed the issue and agreed that we will not agree to the evacuation.  However, we are advised that he mining company is now ready to mine.”

Munkuli said they were waiting for the district development co-ordinator (DDC) to address the villagers on the issue.

DDC Land Kabome said he was aware of the issue.

In 1945 the Lubimbi community was moved from the Madilo area between Shangani and Kana rivers to pave way for a Cold Storage Commission project.

Some were moved to the area during the construction of the Kariba Dam around 1956, and the others came from Sinamatela area around 1950 and were moved to pave way for the establishment of the Hwange National Park.

“It has not yet reached that level of evacuation but l am aware that HCC was given a mining claim long back. The colliery is supposed to go to the community and advise the villagers,” Kabome said.

“We have not yet engaged the community. We will update you, because there will be certain things we expect the HCC to do for the community.”

HCC public relations manager Beauty Mutombe said they were engaging the community.

“There are no evacuations at this stage, we are engaging the community through the office of the DDC but so far we have not yet done anything on site,” she said.

 

Newsday

Zesa turns to technology

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ZESA Holdings says the power utility will focus mainly on providing solutions amid a spike in theft and vandalism on its property.

ZESA executive chairman Sydney Gata said the power utility was going to use technology in the fight against theft as the number of incidents has been on the rise, delaying development of key infrastructure as the utility had to channel the money towards replacing the stolen key equipment.

“Solutions to theft and vandalism should be prioritised. In order to mitigate the risk of theft and vandalism, Loss Control is working with other stakeholders and law enforcement agents. Even though this is the case, there is a need to explore technology and ride on such technological interventions to curb with speed the  problem of theft and vandalism,” Gata said at the ZESA Risk Management Awards ceremony held this month.

Equipment theft and vandalism has been identified as one biggest risk prejudicing the power utility of more than US$2m annually.

So widespread is the theft and vandalism that in 2019 the power utility acquired industrial-grade enterprise drones to curb the vice, which has been likened to economic sabotage.

Zesa has also been lobbying for a stiffer, longer sentence for those convicted of infrastructure theft.

There have also been claims that ZESA employees were behind most of the theft cases as economic conditions in the country have worsened rendering salaries useless forcing them into crime.

The Zesa Risk Management awards were held to honour stations with outstanding performance within the ZESA group that excelled in good risk management practices during the year 2021.

ZPC Kariba Power Station and ZENT Projects division were awarded for being the overall best in risk management and loss prevention.

In order to mitigate the risk of fires and explosions, which has also caused severe losses other than theft and vandalism, Zesa reported that it acquired and commissioned Arc Flash personal protective equipment valued at US$350,000.

 

 

Business Times

Pay rise for mining sector workers

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Workers in the mining sector have been awarded between 46% and 50%  wage increase which will see the lowest employee earning ZWL$45 000 from ZWL$30 000 a month following a recent agreement between the Associated Miners Workers Union of Zimbabwe and the Chamber of Mines of Zimbabwe.

The highest paid will now earn about ZWL$104 000 from ZWL$71 000.

According to the National Employment Council (NEC) of Zimbabwe for the mining industry, the workers will  also get a minimum portion of US$198 and US$460 respectively.

“This notice serves to bring to your attention that the following new minimum rates or pay grades 1-13 have been agreed upon in dual currency. This agreement carries an exemption Clause as stipulated in the Principal Agreement Statutory Instrument 152 of 1990 Clause. Non  foreign currency generating companies upon being granted an exemption may be allowed to pay the United States dollar amount in Zimbabwe dollars  equivalent using the official bank rate. Employers who are able to pay more than the NEC minimum are encouraged to do so,” NEC said.

The salary increment comes after the cost of living for a family of six increased  by 25% to $72 967 to meet their basic needs according to the Consumer Council of Zimbabwe (CCZ).

The current cost of living implies that a family of six now requires US$300 using the current parallel market exchange rates per month to meet their monthly requirements or US$700 based on the official rate.

Revenue and together with agriculture the sector is expected to anchor economic growth this year.

 

 

 

Business  Times

 

Official gold buying prices Wednesday 2 March 2022

Fidelity Gold Refiners (FGR) official gold buying prices Wednesday 2 March 2022.

SG 90% AND ABOVE US$58.70/g
SG ABOVE 85% BUT BELOW 90% US$57.77/g
SG ABOVE 80% BUT BELOW 85% US$57.15/g
SG ABOVE 75% BUT BELOW 80% US$56.54/g
SAMPLE BELOW 10g BUT ABOVE 5g US$55.61/g
FIRE ASSAY CASH US$58.70/g

Exchange rate TBA

NB: Fire Assay cash price is for gold above 100gs and no sample is deducted.
For Fire Assay Transfer price, a sample of not more than 10g is deducted
2% royalty is charged on all deposits (Small-scale Miners)
5% royalty is charged on Primary Producers

Cash available. Fidelity Gold Refiners prices will be changing daily in relation to world market prices.

Gold price gains as investors weigh impact of Russia sanctions

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Gold extended gains on Tuesday as investors continue to assess the risks to global growth that may stem from the sanctions against Russia in the wake of its invasion of Ukraine.

Spot gold rose 1.0% to $1,927.76 per ounce by 11:30 a.m. ET, recovering from last week’s slight dip and reaching a new 15-month high. US gold futures were up 1.5% to $1,930.40 per ounce in New York.

 

Treasuries also climbed, and traders are abandoning bets on a half-point rate hike by the Federal Reserve this month amid concerns that an escalation of war could weigh on the growth outlook. US equities fell while the dollar advanced.

Earlier, Russia said it would press forward with its invasion of Ukraine as troops were seen moving in a large convoy toward the nation’s capital Kyiv. As penalties against the Kremlin mounted, the European Union identified seven Russian banks it’s considering excluding from the SWIFT payment system.

Bullion remains “largely supported amid haven flows due to the Ukraine situation,” Fawad Razaqzada, market analyst at ThinkMarkets, said in a Bloomberg interview.

“The metal also got additional support from falling bond yields, which are further weighing on real yields with inflation continuing to soar. Investors are reducing their expectations about aggressive tightening from central banks,” Razaqzada added.

According to Bloomberg data, gold-backed ETF holdings registered the biggest daily inflow in three weeks on Monday. “Gold ETF inflows is a clear sign generalist investors are sourcing war hedges and safe havens,” said Nicky Shiels, head of metals strategy at MKS PAMP SA.

Mining(With files from Bloomberg)

 

Caledonia hedges 25% of 2022 gold target

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Caledonia Mining Corporation has entered into a zero cost contract to hedge approximately a quarter of its 2022 gold production target at Blanket as it seeks to protect its balance sheet during its phase of higher capital investments.

The Victoria Stock Exchange-listed miner has entered into a cap and collar hedging contract for 20,000 ounces of gold in the period March to July.

The contract has a cap of US$1,940 and a collar of US$1,825 which means that for 4,000 ounces of gold per month for the period, Caledonia will receive an effective gold price per ounce of not less than US$1,825 or greater than US$1,940. It will receive an effective spot gold price between these two levels.

CEO Steve Curtis said the resources firm decided to hedge production so as to take advantage of the current strong gold prices to protect the balance.

He said hedging gold production is not an easy decision for a gold miner as investors usually wish to maximise exposure to gold price upside.

“However, given the fact that our capital expenditure phasing is heavily weighted towards the first half of 2022 as we ramp up gold production, the board considered it prudent to take advantage of the current strong gold price to protect the balance sheet during this phase of higher capital investment with a five-month hedging arrangement over a portion of our production,” Curtis said.

Hedging is a risk management strategy employed to offset losses in investments by taking an opposite position in a related asset.

The reduction in risk provided by hedging also results in a reduction in potential profits. Hedging strategies typically involve derivatives, such as options and futures contracts.

Meanwhile the company is targeting an annual gold output of 80 000 ounces in 2022 and they are also top acquire more assets in the country.

 

 

Business Times

Muzarabani oil, gas project seismic survey data processing complete

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AUSTRALIA Stock Exchange-listed Invictus Energy Limited, has completed data processing of the 2021 seismic survey for the Muzarabani oil and gas project as well as the concurrent reprocessing of a legacy Mobil dataset.

Invictus, which is developing the Cabora Bassa oil and gas project in Muzarabani, Mashonaland Central province, is reprocessing data from an initial seismic survey that was done in the 1990s by Mobil, a France-headquartered company.

Despite undertaking the initial seismic survey in the Cabora Bassa area, Mobil decided not to follow it up and thus Invictus, using more modern data processing techniques, reprocessed the data gathered and found strong evidence that the underlying geological structures had the domes and traps that could indicate oil and gas in Muzarabani.

In oil and gas exploration, seismic survey refers to the process of using high-tech equipment to listen to underground vibrations in order to determine the existence of hydrocarbons.

“Data processing of the 2021 Cabora Bassa 2D Seismic Survey (CB21 survey) and concurrent reprocessing of a legacy Mobil dataset has largely been completed by onshore highresolution data specialists Earth Signal Processing in Calgary, Canada.

“All key products have been received by Invictus and seismic interpretation is progressing well,” it said.

The acquisition and data processing of the CB21 survey, along with the reprocessing of 1990 Mobil survey data has achieved the objectives of providing a high quality, comprehensive 2D data set which is contractor-consistent and process-consistent.

The parameters employed for the acquisition of the CB21 survey, along with modern data processing technology have significantly elevated the data quality to a high standard.

“As the interpretation is progressing, multiple anomalies have been noted in the basin’s seismic data.

“These can often be indicators for the presence of hydrocarbons. Examples of these are provided in the images overpage.

“These anomalies will be investigated with additional data processing products produced by Earth Signal Processing.

“Their geophysical signature, as well as trapping geometry and position (structurally and stratigraphically) will then be evaluated,” said Invictus.

It is hoped that this would allow the anomalies to be assessed and ranked to ascertain the likelihood of viable hydrocarbons within a definable trap.

Invictus managing director Mr Scott Macmillan commented: “The maiden drilling programme to test the world-class Muzarabani prospect is coming together well.

“We are pleased to have secured Exalo’s rig 202 as well as well services with Baker Hughes and long-lead items.

“The final seismic data has provided evidence of multiple trapping geometries and a target rich environment for the upcoming drilling programme.”

The drilling campaign is scheduled to commence in June this year and Invictus is working towards a two-well programme.

“The Company is maturing additional potential within our acreage and continuing to build on our significant prospective resource inventory,” he said.

 

 

The Chronicle