Mining ZimbabweLatest Mining News, Policy and Industry Updates

Prospect Resources, the Australian-listed company developing the Arcadia lithium mine in Zimbabwe, has opened bids for investors willing to fund the project.

Prospect says it has received “multiple enquiries” from “a range of international parties” willing to be involved in the project.

Last year, Prospect signed a memorandum of understanding with Uranium One, the Canada-based unit of Russia’s Rosatom, opening talks for a possible deal by the Russian miner to buy over half of the lithium from Arcadia mine. Russia’s Renaissance Capital was appointed advisor on the transaction.

But Prospect now says it is willing to listen to more possible partners.

“Following a review of various funding options, and in response to multiple enquiries recently received from a range of international parties in relation to funding and development of Arcadia, the Prospect Board has decided to commence a structured process whereby interested parties will have the opportunity to put forward partnership proposals in a competitive environment to fully fund the Arcadia project,” Prospect says in a statement.

In December 2019, Afreximbank agreed to arrange and manage a US$143 million project finance debt facility for Prospect, and also pledged to fund and hold US$75 million of the arrangement to fund development of the mine. However, talks were delayed due to COVID-19’s impact on the capital markets.

Prospect says its new funding model will now get priority over previous plans.

“The Board is prioritising the development of Arcadia through this partnership process over other funding options, to provide more flexibility, accelerate project execution and bring the Project into production at the earliest possibility.”

Prospect director Sam Hosack said Arcadia has seen interest from “key players” for what is potentially one of Africa’s biggest hard rock lithium developments.

“We are excited with the interest from key players in the lithium sector and look forward to working with Azure and Vermilion to find the right long term partner for the funding and development of the Arcadia Mine,” Hosack said.

Azure Capital and Vermilion Partners have been handed the mandate to handle the bids.

Prospect is looking to take advantage of resurgent interest in lithium projects. Over the past week, prices for high purity lithium carbonate chemical prices have risen 10.3%, while spodumene concentrates rose 27.1% between June and July.

China’s Ganfeng, the world’s largest lithium producer, has recently bought into ASX-listed companies Core Lithium and Firefinch.

Prospect is currently optimising a definitive feasibility study, meant to confirm resources and the best way to mine them. The previous definitive feasibility study showed an estimated 15.5-year initial mine life

On June 30, Prospect commissioned its pilot plant at Arcadia Mine. The company in July increased its stake in Arcadia from 70% to 87% after buying out Farvic Consolidated Mines.

NewZwire

LACK of public access to relevant and accurate extractives (mining, oil and gas) information remains a major issue for Zimbabwe.

Since the decline of the agricultural sector, mining emerged as the leading sector for economic revival.

Statistically, the country is said to have more than 60 known minerals, 40 of which are being exploited.

Other reports rank Zimbabwe second after South Africa on platinum reserves and that it hosts 15% of global chromite reserves.

The big numbers and statistics are not supported by current and reliable geological data and reports.

The country does not even have a mining cadastre system resulting in over-pegging of mining claims.

Glaring variations and discrepancies exist between statistics held by different government departments. Diamond production, export and revenue statistics are an example of the level of inconsistencies.

The mix also includes often shady and less known Chinese entities that do not respect labour, environmental and human rights standards.

The forbidding political situation in the country has been blamed for discouraging foreign investments due to fear of security of tenure and unpredictable legal and political developments.

Given this scenarion, the informal mining entities heavily outweigh large- and small-scale mining.

The number of unlicensed artisanal miners is considerably high and increasing particularly in the gold sector.

Low gold prices offered by government entities have led to a flourishing black market and smuggling of gold.

Further, many artisanal miners have no knowledge of mining, environmental, safety and health laws.

Currently, government is proposing legalizing artisanal mining but so far, no concrete legal steps have been taken.

While some domestic and multinational companies are still operational, most are operating below normal capacity utilisation levels.

Management of state entities has been weak, unaccountable, and not significantly beneficial to the country.

The state is also an active player in mining and marketing of minerals through its various State-Owned Enterprises like the Zimbabwe Mining Development Corporation (ZMDC) and Minerals Marketing Corporation of Zimbabwe (MMCZ).

Despite its strategic economic importance and potential, mining continues to give rise to economic problems.

Corruption and lack of transparency and accountability in licencing, contract negotiation and revenue distribution stand as the main challenges.

Some of the problems are linked to the old legal and institutional framework run on a political patronage system that affects effective and beneficial contract negotiation and oversight by parliament.

Further, there is no public disclosure of disaggregated revenues and contracts.

An attempt at promoting public disclosure of revenues through the Zimbabwe Mining Revenue Transparency Initiative (ZMRTI) in 2012-2013 was peremptorily rejected by the Ministry of Mines and is in limbo.

It was part of efforts to create a domestic version of the Extractive Industries Transparency Initiative (EITI).

Going forward, we will push for workable measures and tools to promote transparency and accountability in the coming five years through the Publish What You Pay coalition.

Tax evasion, illicit financial flows and undeserved tax exemptions are some of the challenges in the mining sector.

The Mines and Minerals Act gives too much power to the Minister of Mines to offer tax exemptions to mining companies without public or parliamentary scrutiny for appropriateness. This deprives the country of revenue.

In addition, illicit financial and mineral flows are another challenge. There is a perceptible increase in criminality, smuggling and leakages of minerals such as gold and diamonds at mines and across the country’s borders due to poor monitoring systems and low prices offered.

Therefore, in the coming five years, our focus will be on finding ways and tools to fight tax evasion, illicit financial and mineral flows and corruption.

Violations of environmental, economic, social, cultural rights and other freedoms in the mining sector are increasing.

We are ready to fight this scourge. Mining causes loss of land, displacement of communities without compensation, pollution of rivers and loss of livelihood sources.

The rights of workers are also not being respected particularly at Chinese mines where working conditions are slavish.

State participation in mining through state owned companies has led government to abdicate its duty to protect the people.

State complicity in human rights violations may be linked to failure to apply and implement the concept of business and human rights as enunciated in the UN Guiding Principles on Business and Human Rights.

Further, compliance with and monitoring of Environmental Impact Assessments to address potential impacts and risks on communities by mining companies and environmental authorities has been very weak.

In all this, what has been missing is a community based social accountability tool and or an independent EIA Monitoring Protocol that can be used to assess compliance EIA commitments.

Implementation of the Indigenization and Economic Empowerment Programme while noble, is another controversial issue we will deal with.

Many Community Share Ownership Schemes face transparency and accountability challenges including misuse of funds, manipulation by politicians, failure to consult or report back to the people on operations and absence of a clear and predictable legal and policy implementation framework.

What also remains as a major challenge, is the existing old and colonial legal architecture especially the Mines and Minerals Act.

The Act does not adequately deal with environmental protection, transparent issuance of mining rights and public disclosure of mining revenues.

Since 2007, there are several stalled legal reform processes initiated by government such as the Mines and Minerals Amendment Bill, Draft Minerals Policy, Income Tax Bill, Sovereign Wealth Fund Bill, a diamond law, and exploration law. Up to now nothing has materialized. in the coming five years.

A detailed analysis of the above and other challenges in the extractive and mining sector are included in a mining and extractive sector programme document ZELA produced in 2013. ZELA ENDS//

miningindex

Zimbabwe will use more than half of the US$961 million it has been allocated by the International Monetary Fund in the form of special drawing rights to support its beleaguered currency.

The government abandoned a 1:1 peg between a precursor of the reintroduced Zimbabwe dollar and the greenback in February 2019. The currency now trades at 85.82 to the US dollar and even lower on the black market, a plunge that’s made it difficult for the government to get it accepted locally, and it’s generally not tradable outside the country.

“For the support of the currency we want to hold back about $500 million,” Mthuli Ncube, Zimbabwe’s finance minister, said on Tuesday.

The rest of the SDRs will be used to support the acquisition of COVID-19 vaccines, investments in schools, hospitals and roads and other priorities, Ncube said.

Revolving funds will also be set up to help manufacturers and mining companies buy new equipment, and to revive the horticulture industry by encouraging the cultivation of roses, macadamia nuts and blueberries, he said.

The resources won’t be used to pay down any of the more than US$8 billion in external debt the country owes even though its arrears have effectively blocked Zimbabwe from borrowing more money from multilateral lenders.

Ncube also confirmed the government was considering borrowing money from private creditors to compensate the White farmers.

Zimbabwe has agreed to pay the farmers US$3.5 billion, half of which is due in July next year, to settle the two-decade old dispute that’s soured relations with Western countries, including the US and the UK.

“The idea is a special-purpose vehicle out of which we can then raise resources on the back of some escrowed tax revenues from specific sources that are ring-fenced,” Ncube said, adding that the tax could be in the form of mining royalties.

Zimbabwe exports platinum, gold, nickel and chrome.

Another proposal under consideration is the local sale of a US dollar bond, the minister said.

___

Bloomberg

SEVERAL arms of Government in the Midlands Province say they are ready to smoothen the way for the birth of the US$1 billion Mvuma steel plant expected to be commissioned next year.

Set to be Africa’s biggest steel plant, the project will employ over 6 000 people.

The ground-breaking ceremony, undertaken by a local subsidiary of Chinese global steelmaker, Tsingshan Holdings, is expected to be presided over by President Mnangagwa in two months’ time, while the Chinese firm’s top brass will fly-in for the occasion.

Early this week, Government agencies in the province — led by the Midlands Minister of State for Provincial Affairs and Devolution Mr Larry Mavima — convened for a consultative meeting at the project site to discuss implementation modalities.

Stakeholders — including the ministries of Industry and Commerce; Lands, Agriculture, Fisheries, Water and Rural Resettlement and Transport and Infrastructure Development — said the steel plant — expected to be a boon for infrastructure development, job creation
and economic development of the provincial and national economies — meant lots of work in months ahead.

“We want to ensure a smooth takeoff of the project and every department that has something to do with this project has to play its part,” Minister Mavima told the meeting.

“We don’t want the investor to be denied any service they need when the Government and His Excellency, the President have approved the creation of this project. Let us ensure that it is implemented within the time frame agreed by Government,” Minister Mavima said.

He said some grand projects had failed in the past because of “falling into that trap of not following relevant procedures.”
Minister Mavima told the stakeholders:

“We don’t want anyone who will say, ‘I was not consulted.’ We will remove all landmines that you might encounter because this project will not only help the local community but also the GDP of the province and at national level. This project is being incorporated into our provincial economic plan for the next five years, which is similar to the Government’s National Development Strategy 1 blueprint.”

In addition to sprawling infrastructure development, the project will employ 6 000 people directly and make a town of its own that will be bigger than Redcliff — which served the former steel giant Zisco — in its heyday.

A dam over Munyati River, a new bridge, a tarred road, a 40-kilometre rail link to Gweru and an electricity substation are some of the substructures to accompany the plant.

Stakeholders also agreed that the development would cause environmental impact, and officials from the Environmental Management Authority (EMA) clarified various procedures required to ensure certification for safety and environmental standards.

The investors have also clarified that there will be no relocation of villagers.

A company representative told The Sunday Mail: “From an investor perspective, we are overwhelmed by the efficiency of the province: it is unbelievable. We could not reach this stage without the help of various Government departments.”

Zimbabwe, a mineral rich country in Southern Africa where recent exploration activities have led to strong indications of potential significant oil and gas prospects will showcase its hydrocarbons potential to investors at Africa Energy Week in Cape Town in November this year.

The Southern African country — bordering Mozambique to the east, Zambia to the north and South Africa to the south — has no proven hydrocarbon reserves yet, instead deriving its energy primarily from hydro-power and coal, along with petroleum imports from
neighbouring countries.

However, with the promise of potential prospects in the Muzarabani Basin — which borders Zimbabwe and Mozambique — the country is sitting on the verge of a hydrocarbon boom, set to be unlocked through foreign capital, technology and expertise.

As Zimbabwe prioritises the expansion of its energy sector and invites global stakeholders to explore its uncharted territory, African Energy Week (AEW) 2021 from November 9 to 12 in Cape Town, where the country will showcase its abundant mineral wealth and investment potential, will serve as the official platform for the country to exhibit its potential to spective investors.

In a bid to establish a domestic hydrocarbon industry and achieve energy independence, Zimbabwe has recently focused its efforts on exploration, with Australian-based Invictus Energy Limited leading the way.

In 2018, Invictus signed a petroleum exploration development and production agreement with the Government of Zimbabwe to explore for commercial deposits in the Muzarabani prospect.

The company has since revealed significant hydrocarbon potential located in the prospect, leading to a planned 2D seismic survey campaign and the drilling of the first oil/gas test well in October/November 2021.

If successful, confirmed hydrocarbon deposits will not only lead to enhanced energy independence by reducing petroleum imports, but also drive gas-to-power projects that could power the country’s mining sector and industrialisation. In other words, the
Muzarabani Basin has the potential to catapult Zimbabwe into both an energy and industrial hub.

Additionally, the potentially hydrocarbon-rich Muzarabani Basin could justify other commercially viable deposits in other basins across the country.

In total, Zimbabwe has six sedimentary basins —Kariba Basin, Tuli Basin, Mozambique Basin, Okavango Basin, Zambezi Basin and Nama Kalahari Basin — which hold the right geological address for hydrocarbons, thereby warranting further exploration.

This has created attractive opportunities for global explorers and upstream stakeholders looking to cash in on one of Africa’s final frontiers. As Zimbabwe seeks to develop its burgeoning oil and gas sector, AEW 2021 recognises the significant potential that Zimbabwe holds, and will present the country and its investment opportunities to both regional and global stakeholders at Africa’s premier energy event.

By uniting financiers and oil and gas explorers with Zimbabwean partners, AEW 2021 will facilitate the critical investment deals necessary for the country to realise its oil and gas objectives.

In addition to oil and gas opportunities, Zimbabwe may be the solution to and a key driver of Africa’s energy transition, boasting significant mineral deposits that serve as key inputs into clean energy technologies. The country’s mining industry, which focuses on gold, asbestos, chromite, coal, platinum and diamonds, is made up of a diverse range of small- to medium-sized operations and contributes eight percent towards the country’s gross domestic product.

However, it is the country’s lithium potential that could drive international investors into the country and propel Africa’s energy transition.

According to the International Trade Administration, Zimbabwe has the largest lithium deposits in Africa and one of the top ten reserves globally, with the country’s largest mine — the Bikita mine — holding approximately 12,8 million tons of lithium ore with a lithium content of 1,4 percent, or 150 000 tons.

With the recent rebound in the lithium market — in part attributed to increasing demand for lithium-ion batteries associated with green power for utilities and car production —Zimbabwe is on the precipice of a mining sector revolution.

By showcasing the country’s potential and positioning Zimbabwe at the forefront of Africa’s energy transition, AEW 2021 will unite investors with on the ground opportunities in one of Africa’s most sought-after markets.

Accordingly, AEW 2021 will drive a productive discussion on Zimbabwe and its oil, gas, and lithium resource potential, as well as facilitate the critical deals necessary for the country to realise its long-term development objectives.

Business Weekly