Mining ZimbabweLatest Mining News, Policy and Industry Updates

ZESA Holdings says it needs at least US$17 million a month to import power, and keep lights on amid rolling electricity outages lasting several hours.

In a statement, Zesa said it was engaged in negotiations with power utilities in neighbouring countries to meet local demand.

Recently, Zesa warned of more power cuts to allow the resumption of maintenance work at Kariba Dam.

“To have balance in demand and supply, we need power imports to sustain the growth. We need US$17 million per month to import enough power. Various negotiations and dispensations are ongoing to ensure that we continue to import electricity so as to complement the various internal initiatives that we have embarked on,” the power utility said.

“We have various initiatives that are ongoing to ensure the stabilisation of the electricity supply, chief among them is the Hwange 7 and 8 expansions and the maintenance works at the Hwange Power Station.”

On January 1, Zesa announced a new tariff increase, which will see the first 50 units or kilowatt hours costing $2,25/kWh, and the next 50 units costing $4,51/kWh, while the next 100 units will cost $7,89/kWh. Everything after that will cost $13,50/kWh.

Indications are that consumers will have to fork out $2 253 to purchase 300 units, while 400 units will cost
$3 547, and one must add $1 350 for every block of 100 units after that.

But experts said increasing tariffs was not the answer.

Zesa added: “We can confirm that we have made progress in the settling of power import bills to our regional suppliers that fall in the Southern African Power Pool and we would like to thank the government and Afreximbank for co-ordinated interventions in ensuring that we pay up our dues.”

NewsDay

Statistics released by the central bank showed that gold delivered to Fidelity Printers and Refiners was 55% up last year to 29.6 tonnes from 19.05 tonnes in 2020 on the back of timeous payments and incentives given to yellow metal producers.

This is the second-highest output after the 34.4 tonnes delivered in 2018 signalling that the golden times could be back for the yellow metal.

Gold is the third largest foreign currency earner after platinum and diaspora remittances.

However, authorities have in the past given gold producers a short end of the stick with payments coming more than two weeks after deliveries and the yellow metal being sold at prices lower than those prevailing on the international market.

That has since been resolved resulting in a surge in deliveries to official channels.

The Ministry of Mines and Mining Development is targeting a US$12bn mining industry by 2023. Gold is expected to contribute US$4bn on the back of a favourable investment climate.

While authorities could be popping champagne bottles after a stellar year, more work needs to be done for the 100 tonnes target to be met by 2023.

Small scale miners have complained of taxes which they say inhibit production. They say the Zimbabwe Revenue Authority should not be tough on them to drive formalisation.

They say these obstacles have seen gold being sold on informal channels.

The small-scale miners also require support to buy equipment and boost production.

There have been concerns over the myriad of taxes which has seen small scale miners evading formal channels.

It is estimated 3 tonnes of gold is sold through the informal channels monthly.

Large scale miners want authorities to increase the forex retention threshold to 80% from 60%.

A State of the Mining Industry Report showed that miners are unhappy with the 60% foreign currency retention.

The executives said the 60% retention was inadequate to meet their operational requirements.

They said the retention was under pressure from requirements to pay royalties, electricity bills, taxes and some statutory obligations in foreign currency as well as widespread preference for US$ by suppliers.

The primary producers say they are losing 20% of their revenue due to the disparity between formal and informal exchange rate. While the dollar traded at ZWL$112.228 at the foreign currency auction system on Tuesday, it is ZWL$220 on the thriving parallel market.

They say if the authorities do not increase the threshold to 80%, the 40% they liquidate should be able to settle statutory obligations and payment of electricity tariff.

The mining sector is one of the anchors of the Zimbabwe economy. Its contribution to GDP reached 11.8% in 2020 from 6.5% in 2016. The sector was projected to contribute 11.3% to GDP last year.

The sector’s contribution to export receipts was projected at 77% last year from 64% in 2016.

Indications are that the yellow metal is on the rebound. However, the growth in output requires that monetary and fiscal authorities have to put in place policies that encourage deliveries via formal channels. Gold is one of the most liquid commodities.

Business Times 

CALEDONIA Mining Corporation lifted gold output at Zimbabwe-based Blanket Mine by 17% last year, after scaling up throughput at the “game-changing” Central Shaft, an underground operation that blasted off its first bullion in April, according to chief executive officer Steve Curtis.

In a shareholder update on Tuesday, Curtis said the firm scaled up output to 67 476 ounces (oz) during the review period, above its 2021 target of between 61 000oz and 67 000oz, giving impetus to directors’ long cherished ambition to reach 80 000oz by the end of this year.

On a quarterly basis, Blanket bolstered output by 24% to 18 604oz during the fourth quarter ended December 31, 2021, compared to 15 012 ounces of gold mined during the prior comparable period in 2020, Curtis said.

“This has been an outstanding performance and a tremendous team effort…we were able to exceed our revised annual production guidance.

“The commissioning of the Central Shaft, record gold production, along with a continued commitment to safety, all in one year, is an outstanding achievement and testament to the quality of the Caledonia technical team. Now that the Central Shaft is complete, the company will focus on other areas of its growth strategy, as we continue to evaluate investment opportunities, with a vision of becoming a multi-asset gold producer,” said Curtis.

Central Shaft represents one of the most recent significant gold mining investment projects in Zimbabwe that is a game-changer to Caledonia’s local interests.

The asset performed to expectation during the review period, underpinning most of the growth figures released on Tuesday which were in line with the combined sector output announced by government last week.

For Caledonia, 2020 was a tricky period highlighted by continuing tough foreign currency retention thresholds imposed by the central bank.

These were compounded by the effects of heavy rains which flooded shafts at the beginning of the year.

Central Shaft is expected to further ramp up Blanket’s gold production this year, trim overheads and help the firm build fresh capacity to undertake further exploration and development.

Blanket represents part of Caledonia’s bigger Zimbabwean ambition.

Curtis last year announced plans to pounce on at least two more gold assets and expand Caledonia’s Zimbabwean presence.

Before that, Bloomberg had reported that the firm was interested in buying one of Zimbabwe’s largest gold operations as it embarked on an aggressive programme to acquire more assets in the country.

The report said the Jersey-based gold producer was weighing the acquisition of Bilboes Gold’s Isabella-McCays-Bubi mines in northwest Zimbabwe.

The mines can potentially produce more than 200 000 ounces of gold.

Most of the Isabella-McCays-Bubi operations were at the time mothballed as the owners scouted for investors.

The firm listed on the Victoria Falls Stock Exchange (VFEX) in December 2021.

Caledonia hopes to leverage on the forex-indexed VFEX to fund-raise for its ambitious expansion in Zimbabwe.

Newsday

DEFUNCT steel-manufacturing giant, Zisco, has completed the adjudication process for potential investors expected to spearhead the revival of the Redcliff-based firm.

Names of the prospective investors have since been submitted to Cabinet for approval.

In an interview, Zisco group chief executive officer Dr Farai Karonga dismissed social media reports suggesting that a decision has already been made on the investor to take over the company’s operations.

“We have noted with concern some reports doing rounds on some social media platforms that we have already nominated a company to take over at Zisco. Such information is misleading and should be disregarded.

“The reality is that we have concluded the adjudication process and forwarded the names to Government and we await Cabinet approval,” said Dr Karonga.

Of late, there has been social media reports insinuating that Kuvimba Mining House has been given the nod to take over operations at Zisco.

Kuvimba Mining House is a joint venture between the Government and a consortium of international investors. Government is the majority shareholders with a 65 percent stake.

Its impressive assets include Shamva Gold Mine, Freda Rebecca Gold Mine, Jena Mine, a stake in the Darwendale Platinum project trading under the Great Dyke Investments, Bindura Nickel Corporation, Zimbabwe Alloys Limited,
“There is nothing official yet, we await the Government’s decision. Yes, we have done our part and it is not our duty to be announcing who won the tender before we get a directive from Government,” said Dr Karonga.

The adjudication process for prospective investors at the largest steel plant north of Limpopo began late last year after the Government in April had announced that it was in a fresh hunt for strategic partner to resuscitate Zisco.

In their expression of interest, bidders for the Zisco revival deal were among others, required to submit information on their financial performance and position, attaching a three-year audited financial statement, ownership structure, names of directors as well as information pertaining their position on the need to evaluate Zisco before the investment.

Seven bids from potential investors from which one would be selected were received.

In recent years, Zisco has been a subject of foreign investor interest with companies such as Essar Africa Holdings, a unit of India’s Essar Group having acceded to investing US$750 million into the Redcliff-based steel producer in 2011, during the era of the inclusive Government.
However, the deal hit a brick wall in 2015.

Again, in late 2019 discussions for a US$1 billion resuscitation deal between Zisco and R& F of China, which had shown much interest to revive operations at the local firm collapsed.

Zisco ceased operations in 2008 due to poor management and lack of capital to recapitalise. At its peak in 1999, Zisco produced up to one million tonnes of steel annually and the entity was among Zimbabwe’s major foreign currency earners.

It is hoped that the resuscitation of Zisco, a strategic company to Zimbabwe’s economy would be a step in the right direction under the country’s development agenda.

Following decades of economic collapse, the Second Republic, which came into power in November 2017 led by President Mnangagwa has vowed to rebuild the economy starting with the successful two-year Transitional Stabilisation Programme (TSP) implemented between October 2018 and December 2020.

Riding on the macro-economic stability brought by the TSP, the country has now moved from economic recovery to stimulating productivity under the National Development Strategy 1 (NDS1).

NDS 1, which builds to Zimbabwe’s envisaged upper middle-income economy status by 2030 is a five-year macro-economic policy running between 2021 and 2025 anchored on increasing production across all sectors of the economy, employment creation, and uplifting the living standards of citizens, among other fundamentals.

The Chronicle

AT least seven people were seriously injured after a machete-wielding gang reportedly aligned to former Zanu PF youth league provincial chairperson for Mashonaland West, Vengai Musengi, ran amok and attacked fellow party youths in a fight over mining claims in Chegutu East.

Police in the province could not immediately confirm the clashes yesterday, but victims of the violent attacks said the clashes occurred last week.

The victims said they could identify the assailants, but were afraid to name them since they were known criminals in the province who were already on the police wanted list.

Zanu PF youths have been fighting over the gold claims, with Musengi reportedly using his closeness to chefs to ride roughshod over others.

“ln 2018, Musengi came with Tendai Chirau, Zanu PF acting youth league secretary, and removed Zuva Rabuda Empowerment Trust. He left Gidi Seven Mining Co-operative led by a youth who was fronting him,” a source close to the developments said.

“That youth was not getting anything from 2018, and he now wants to come to where the rest are and work with Zuva Rabuda. He also alleged that Gidi Seven Mining was not paying people, but he took the money claiming that he was taking it to some chefs.

“Chirau has since distanced himself from Gidi Seven Mining saying he acted without getting proper information from Musengi.”

The source added that an arrangement was made to unite Zuva Rabuda and the community, including members of the Zanu PF main wing and the youth wing in the province.

“We set up an executive to replace the one left by Musengi and that is when all hell broke loose,” the source said.

They said they served a notice of their new executive to all government departments and demanded meetings with the Chegutu East Zanu PF leadership, who endorsed the new structures.

“The gang became violent when the new structures were being installed. The night after the meeting, a gang came armed with machetes and started beating up everyone they came across. They used axes and destroyed tuckshops and small operations in the mining area,” the source added.

A police report was made. However, acting provincial police spokesperson for Mashonaland West province Assistant Inspector Ian Kohwera said he had not yet received the report on the violence. “I’m not aware of the incident. I haven’t received the report yet, and if I get something, I will get back to you,” he said.

Chegutu East MP Webster Shamu said he was yet to gather more information on the matter.

“I am yet to gather more on that, but obviously we condemn all forms of violence. Our President Emmerson Mnangagwa has been very clear, including at the last politburo meeting, that we do not want violence as a party and this should stop,” Shamu said.

Musengi has been fingered in most violent clashes in Mashonaland West, including the chaos that rocked provincial elections where he was also a contestant, but lost to Mary Mliswa-Chikoka.

In a related matter, a Zanu PF provincial co-ordinating committee meeting in Masvingo had to be aborted yesterday after rival youths clashed, resulting in one person being injured.

The clashes happened between supporters of the Masvingo Provincial Affirs minister Ezra Chadzamira and those of Zaka North MP Robson Mavhenyengwa.

Chadzamira lost the provincial chairmanship to Mavhenyengwa.

The meeting, the first after the provincial elections, was supposed to be held at the Great Zimbabwe University’s Robert Mugabe School of Education in the industrial area.

But riot police had to be called in to contain the situation as rival bussed-in youths engaged in running battles.

The disagreements were over the party structures that constituted the district electoral college, which should consist of 40 people in the youth wing, 40 from the women’s league, and 40 from the main wing.

Masvingo provincial police spokesperson Inspector Kudakwashe Dhewa referred all questions to national police spokesperson Assistant Commissioner Paul Nyathi, who could not be reached for comment.

Zanu PF politburo member and party secretary for security Lovemore Matuke said the meeting was deferred to a yet to be decided date.

“Some hired youths, who may not be party members, came to disrupt the elections. It’s unfortunate that some party members do not want to accept the reality and move on. After all, the politburo and our President said those with grievances should follow proper party procedures if they have grievances,” Matuke said.

NewsDay

CHINESE mining company, Monaf Investments has given villagers in Muchesu ward 12, Binga, three months’ notice to vacate their ancestral land after it was granted a permit to extract coal in the area.

This is not the first group of Binga villagers to be ordered off their ancestral land to pave way for Chinese coal mining projects.

Last year, government flexed its muscles and ordered villagers in Dinde to relocate to allow for a similar project in their area after they had resisted.

“Due to economic challenges, they only did the exploration process, where sample holes were drilled in 2010 and they went back. Now under President Emmerson Mnangagwa’s vision 2030, they were given the greenlight to carry on with their investment and they came last year in October and resumed the project. They started by drilling a four-square metre hole which measures almost 64 metres deep and this is called a shaft,” he said.

“Then the eviction starts here. There are 14 homesteads on top of the coal belt, but not under the same village head. Some are under Siamulamfu, others under Ncheme 1, some under Siabutale. The meeting was held last week on Thursday January 12, 2022 in the presence of the Monaf Investments, ZimParks [Zimbabwe Parks and Wildlife Management Authority], district development co-ordinator, council, the President’s Office, EMA [Environmental Management Authority] and Ministry of Health representatives.”

Mudimba said the main agenda was preparation for resettlement of those affected and they were given a three-month notice to leave the area.

“All this will be done under Phase 1, but Phase 2 will be in two to five years’ time, we will see almost half of the ward being evicted, mostly Zuka village, and this village has two schools. The purpose is to build a power plant and other projects on the site, according to Monaf,” he said.

Mudimba said villagers were not happy with the evictions although the company promised to create jobs for the youth in the area.

“Each village head in the affected area has been given a period to go and look for a good resettlement site where houses will be built for the affected people, boreholes will be drilled and installed. This was a promise from the company. Good sanitation will be a task of the health sector,” he said.

“There are divisions among the villagers. Some wanted to resist the project, but since unemployment is a major economic challenge, almost half are in support of the project.”

A villager from Muchesu said Monaf was just making empty promises so that they could leave the area.

“We have seen a lot of people suffering as a result of these resettlements. It is impossible that this company will build houses for us or create jobs here. We are just going to suffer. It’s hard to leave our land. Things are not being done according to our will. Government does what it desires with our land,” said Simoni Mudenda.

Local councillor Mathias Mwinde confirmed the development, adding that they were holding a meeting to discuss the issue.

“Some arrangements are being made to resettle villagers. We are expecting to hold a meeting and discuss the concerns of the villagers because they are not really happy about being moved,” he said.

NewsDay