Mining ZimbabweLatest Mining News, Policy and Industry Updates

POWER utility Zesa Holdings has warned its customers across the country to brace for possible power cuts after the Hwange Power Station developed a technical fault on Tuesday.

The fault has resulted in the loss of 368 megawatts (MW).

In a statement, Zesa urged people to use power sparingly in light of the reduced supply caused by the Hwange fault.

“Zesa Holdings would like to advise its valued customers countrywide that there is limited power supply on the national grid due to a technical fault at Hwange Power Station,” the statement read in part.

“The technical fault will result in load curtailment of about 368MW today (yesterday) and customers will be updated as the situation improves.”

Zesa said restoration of normal service was underway, adding that “customers are advised to use the available power sparingly”.

Zimbabwe’s gold exports hit a record high of US$184.2m in July, mirroring the favourable Reserve Bank of Zimbabwe (RBZ)’s policies and improved commodity prices on the international markets.

The export receipts reflected a 132% increase from US$79.3m reported in the same month in 2020.

The central bank recently introduced favourable policies that include a 5% incentive, scrapped taxes for small scale miners and is now timeously paying miners for gold deliveries in line with the international gold prices.

Before the July haul, June had the highest export receipts after Zimbabwe reported US$141.5m.

“Our July gold export receipts increased 132% courtesy of the new policies which saw miners clocking 500 kilogrammes weekly,” RBZ governor John Mangudya told Business Times.

Overall, Mangudya said gold export receipts rose 42% to US$648.4m for the seven months to July from US$457.2m.

Smugglers were believed to be taking about 2.5 tonnes to alternative markets every month.

But, with new policies in place, the majority of them are now delivering to Fidelity Printers and Refiners (FPR), the country’s sole buyer and marketer of gold.

Mangudya said the increase in gold export receipts show that most miners were delivering the yellow metal to FPR as it is offering competitive prices.

An industry official, who preferred anonymity, told Business Times that some gold buyers visited Treasury offices and RBZ, seeking the loosening of gold policies.

“Recently a group of buyers visited the RBZ building asking for a more level playing field in the gold sector but we knew that these were smugglers who were capitalising on high royalties and the cost of importing cash…” said the official.

“We just told them that we will look into the matter as to how best we can address the issue but in actual fact we know that we have done well to plug holes.”

Small scale miners also confirmed selling their gold to FPR with the Zimbabwe Miners Federation chief executive Wellington Takavarasha saying: “This time FPR is the best place to be as it is paying timeously and at the prevailing international gold market rate with some incentives for those who deliver 20kg and above. Small scale miners are delivering above 300 kg weekly and more is expected.”

As a result, the June 2021 gold deliveries clocked 2.92 tonnes against 1.4 tonnes same period last year due to a reviewed Fidelity’s buying price of gold for the artisanal and small scale miners.

Small scale miners delivered around 1.7 tonnes against large scale miners’ 1.1 tonnes.

The government has moved to provide equipment in gold centres to move towards helping the attainment of US$4bn gold export revenue.

In her post-Cabinet briefing this week, Information, Publicity and Broadcasting Services minister Monica Mutsvangwa said the government was targeting to establish gold centres across the country, a move which will help the country achieve a US$12bn mining industry by 2023.

“Gold centres are expected to provide basic equipment such as compressors and jackhammers as well as working capital to facilitate optimal production by small-scale miners who supply gold ore. The RBZ shall maintain presence, directly or through approved buying agencies, at all gold centres so as to buy all the gold produced,” she said.

Mutsvangwa said the gold centres will also provide technical services to miners who supply the ore.

“Cabinet approved proposals for the establishment of over20 Gold Centres by mid-2022. Accordingly, memoranda of understanding will be signed with four investors who have been identified for the purpose of setting up the Gold Centres.

The investors will own 100% equity in the centres, while those who operate joint ventures with the Ministry of Mines and Mining Development will fully fund the operations of the centres in return for a 90% equity stake,” Mutsvangwa said.

Business Times

Zimbabwe’s biggest platinum miner, Zimplats, spent more than US$1.3m in exploration projects in the quarter to June this year as it seeks to increase output, the company has said.

“A total of US$1.3m was spent on exploration projects, with a further US$0.1m committed as at  June 30, 2021.

“Exploration activities included mineral resource evaluation work, comprising approximately 10 171 metres of surface diamond drilling over existing projects on the two mining leases.

“The exploration activities improved geological and geotechnical confidence in scheduled production,” Zimplats said in a statement.

The company said total operating cash costs during the period increased 5% from the previous quarter due to higher volume of ore mined and milled.

In addition, costs were negatively impacted by additional Covid-19-related expenditure.

A total of US$1m during the quarter under review was transferred from opening stocks to operating costs during the quarter, as concentrate stocks were reduced in the period.

The increase in production volumes resulted in an 8% quarter-on-quarter decrease in operating cash costs per 6E ounce to US$655.

Unit costs in the quarter under review benefitted from the volume gains realised from the treatment of furnace reverts.

Ore mined increased 2% from the prior quarter due to the increase in operating days and improved productivity from the teams redeployed to other mines following the precautionary closure of Ngwarati Mine after the high-wall collapse incident on February 14, 2021.

While the productivity of the redeployed teams improved on the previous quarter, it remained lower than their capacity at Ngwarati Mine resulting in production being 2% lower than the fourth quarter last year.

Ngwarati Mine reopened for production on July 1, 2021. 6E head grade of 3.4 grammes per tonne and 6E recovery of 77.9% improved from the prior quarter as the ore mix stabilised.

However, milling of lower-grade development ore from Mupani Mine after the precautionary closure of Ngwarati Mine resulted in a 3% decline from that processed in the prior comparable quarter in 2020.

As a result of the lower mill grade, 6E recovery was marginally lower year-on-year due to the decrease in head grade.

Production of 6E (platinum, palladium, rhodium, ruthenium, iridium and gold) was 12% higher than the prior quarter.

6E metal production in final product declined by 5% from the prior June quarter when volumes benefitted from both the treatment of furnace reverts stockpiled during the furnace rebuild and higher 6E head grade and recoveries.

Business Times

The seizure of a Mashonaland East-based gold mine has exposed a well-knit corruption syndicate involving high ranking officials in the Ministry of Mines and Mining Development and part of the investigators from the Zimbabwe Anti-Corruption Commision (ZACC).

In 2007, Trymore Chipepwe, Michel Chipepwe and Tongai Gata discovered a gold mine claim and in the same year Trymore invited Norman Karimazondo to come and join Jeke Mining Syndicate as a member. Norman then asked his brother Paul Karimazondo, who is the MP for Pfungwe, to be the mine sponsor.

The mining dispute began when Norman started calling for a change in shareholding eventually leading to Trymore being removed from the syndicate using Section 61(3) of the Mines and Minerals Act Chapter 21:05.

But according to court documents, Norman contravened this section of the Mines Act and the case was ruled by the High Court in favour of Trymore Chipepwe who was supposed to be reinstated in the syndicate.

However, the ministry’s top officials including Mines Permanent Secretary Onismo Moyo and Head of Legal Jacquiline Munyonga are accused of allegedly frustrating the implementation of two High Court judgements that ruled in favour of Chipepwe.  The High Court judgements directed the ministry to reinstate Chipepwe on two occasions but all the judgements were allegedly either ignored or frustrated.

The alleged corruption case was reported to ZACC leading to the arrest of former Mashonaland East Provincial Mining Director Grace Chacha while some top officials in the ministry including Moyo were summoned by the anti-graft body.

The continued frustration of the court processes as well as reluctance to implement court judgments has fuelled allegations that there could be a well-knit team of the ministry’s top brass that has been allegedly working with the existing syndicate members to keep Trymore out of operations.

There has been increased interest around the gold mine which has potential to produce close to 8kg of gold per week making it one of the most lucrative small scale gold mines in the province.

Efforts to get a comment from Moyo, Mines Permanent Secretary, were fruitless as his mobile phone went unanswered.

A letter by current Mashonaland East provincial mining director Tendai Kashiri in 2018 advising the Permanent Secretary of the matter noted that the removal of Trymore was illegal and recommended reinstatement of the original mining licence which has his name.

“In a letter at our disposal written by the Ministry’s Legal Advisor Munyonga dated September 13, 2018 which we hereby attach the opinion of the legal advisor was as quoted. It is clear that the minutes which are alleged to have been used to convince the then PMD to reissue another certificate excluding Trymore Chipepwe from the syndicate is not a resolution of all syndicate members. Legally the minutes do not constitute a resolution of members of a partnership,” Kashiri wrote.

Kashiri further recommended the cancellation of the new certificate (ME82).

A well-placed source close to developments told Business Times that there has been a plot by ZACC investigators to frustrate the case despite an instruction by some Commissioners for the matter to be investigated.

There has been little movement on the matter, despite ZACC’s legal department recommending arrests, insiders have said.

Business Times

Listed cement producer, Lafarge Zimbabwe,  has reported a strong business performance  in the first five months of the year across all segments owing to growing market demand.

Lafarge company secretary, Faithful Sithole, said in line with the 2021 Strategic Agenda the business achieved volume growth leveraging on the growing market demand in the individual home builder segment as well as government’s ongoing infrastructure development projects.

She said cement, dry mortar products, Binastore retail franchise volumes went up  significantly during the January to May period.

“Cement volumes for the period increased by 23.7% compared to prior year in spite of the Covid-19 national lockdown instituted in the first quarter,” Sithole said.

“In the same period Dry Mortar products volumes grew by 105% compared to the same period last year. The Binastore retail franchise recorded a remarkable 555% growth in volumes compared to the same period in prior year.”

The growth in the retail franchise business was further strengthened by the growth in purchases made on the Binastore e-commerce site facilitating business continuity during lockdown periods.

This resulted in strategic changes in product portfolio mix the average selling price was favourable against budget.

“This, coupled with the significant growth in volumes, secured the company a 346% increase in revenue compared to the same period in prior year on the back of effective cost reduction initiatives implemented in 2021,” Sithole said.

The company’s EBITDA margins strengthened by 2% compared to the same period in 2020.

She said focus remains fixed on ensuring profitability and the cost optimisation drive remained integral given the unstable operating environment.

Lafarge commissioned a new US$2.2m automated Dry Mortars plant  in the period under review.

This resulted in the Dry Mortars production capacity increasing to 100,000t per annum from 7000 tonnes.

The company is also expecting to commission a new  Vertical Cement Mill  in March next year.

This project is the last of the three recapitalisation projects lined up in the business expansion plan announced in 2019.

Sithole said the company continues to innovate in products and services with an objective to offer continuous improvement in convenience and customer satisfaction through a rich product mix.

During the period under review, the company also launched the country’s first waterproof cement under the label WaterShield as part of its progressive product innovation and expansion objective.

This product, made with hydro-defence technology, is manufactured from the new dry mortars plant line and is the first of a series of new products set to be delivered from the added capacity in the DMO business.

Beyond the period under review, the company has since launched yet another innovative offering; a high end dry mortars range of products under the name Tector which consists of plastering mortar (TectorPlast) and Tile Adhesives (TectorCeram) designed to give superior finish to construction works.

Sithole said innovation remains a key focus, leveraging on the increased manufacturing capacity recently installed in the Dry Mortars business.

The company continues to build its resilience with a focus on upholding employee and stakeholder health while ensuring business continuity beyond the pandemic, she said.

Sithole said the business remains focused on expenditure discipline across the board with a key focus on production, distribution and contracted labour costs.

The cost optimisation culture continues to be leveraged in the organisation as a key driver for growth into the future, she said.

Lafarge has maintained momentum on the digitisation of customer services and continues to invest in improving the capabilities of the various platforms for added convenience and efficiency.

This has led to the achievement of 98% adoption of the Lead Retail customer service application by customers bringing convenience and ease of transaction processing to our customers.

The rising momentum in the use of online transaction sites continues to secure revenue for the business in restricted operating environment and the company remains optimistic for stability in commodity prices as well as exchange rates, Sithole said.

Business Times

KUSENA villagers in Marange, who last week had resisted an order by the Zimbabwe Consolidated Diamond Company (ZCDC) to temporarily vacate their homes so that the diamond miner can engage in exploration activities finally capitulated.

Bocha Diamond Community Trust board member Takura Betera yesterday told NewsDay that most of the affected families are set to lose their land after the exploration exercise.

“The ZCDC approached us saying it wanted to do exploration activities, including blasting activities, near our homes.  It had a meeting with our traditional leaders last Wednesday, and as villagers, we also held our own meeting last Thursday,” Betera said.

“They told us to camp at Kusena Primary School on the day that they will be performing their exploration activities. Our response was that it was not proper for them to force us to camp at a school during this COVID-19 era,” he said.

Betera said most of the villagers were set to lose their land due to ZCDC exploration activities.

“Most families are going to lose their agricultural land after the blasting activities. It would be impossible to grow plants on such land. ZCDC must explain to us how it is going to rehabilitate our land,” he said.

The villagers, who had resisted eviction, finally gave in on Friday after striking a compensation agreement for damages that might be caused by blasting activities.

ZCDC spokesperson Sugar Chagonda said the company engaged the villagers, adding that the process went on well.

“They (villagers) did not resist.  We carried out awareness campaigns, which is a requirement.  We cannot just take villagers by surprise.  Some of them have no understanding of what exactly is happening.  However, they later appreciated the process of exploration and it was a success,” Chagonda said.

NewsDay

CHINESE firm, Afrochine Smelting (Pvt) Ltd has filed a lawsuit against Earthlink Minerals (Pvt) Ltd for carrying out mining operations in Mavhuradonha Wilderness in Muzarabani district.

Afrochine cited Earthlink and Mines minister Winston Chitando, who it challenged to tell the court the truth regarding ownership of the controversial mining site.

The Zimbabwe chrome smelting giant has been accused of looting minerals from a protected area, damaging the main padlock at Mavuradonha Wilderness to gain entry and moving its excavators and other heavy machinery.

The Mavhuradonha Wilderness is a 600-square kilometre wildlife resort and has been maintained in its natural state since 1988 when the government designated it a protected area under the Communal Lands Act.

This ensured its protection from mining, agriculture and any other activities.

However, Afrochine has maintained that it is the rightful owner of the resort, but denied allegations of engaging in mining activities as reported.

The Chinese firm is seeking an order barring Earthlink from mining chrome in the wilderness and that it be declared the rightful owner of the claim.

Afrochine said Earthlink and Chitando should clarify that the mining company did not carry out any mining operations.

The company said it only discovered that Earthlink was mining on its claim on July 24 this year.

The mining company said EarthLink’s actions impacted negatively on the environment as well as on their reputation as the media widely reported that Afrochine was responsible for the damage.

In his founding affidavit filed on behalf of the company, Qedisani Mlambo said Afrochine was still assessing the impact of mining on the environment.

“What is disturbing to the applicant is that the respondent purported to be Afrochine Smelting and they gained access to the wilderness reserve without proper consultation with the local leadership,” Mlambo said.

He accused Earthlink of causing serious environmental degradation and disturbing wildlife.

“This is a clear case of mistaken identity where Earthlink’s actions are attributed to the applicant because the mining location in question is owned by the applicant.”

Mlambo complained that Earthlink had apparently done nothing to dissociate itself from the applicant when allegations of unsustainable and harmful mining arose.

Afrochine says it has a legal right to chrome in the location and the actions of the respondents are prejudicial to the company’s legitimate mining rights and business in general.

NewsDay

ZIMBABWE’S largest platinum group metals (PGMs) producer, Zimplats says its six elements (6E) output improved by 12 percent to 153 643 ounces in the quarter ended June 30, 2021 from 137 093 the previous quarter.

The 6E are platinum, palladium, rhodium, ruthenium, iridium and gold.

In a trading update for the quarter ended June 30, 2021, Zimplats said:

“6E metal production in final product increased by 12 percent from the third quarter due to the combination of higher throughput and increased process recoveries.”

It said 6E metal production in final product declined by five percent from the prior June quarter when volumes benefitted from both the treatment of furnace reverts stockpiled during the furnace rebuild and higher 6E head grade and recoveries.

Ore mined increased by two percent from the prior quarter due to the increase in operating days and improved productivity from the teams redeployed to other mines following the precautionary closure of Ngwarati Mine after the high-wall collapse incident in February this year.

“While the productivity of the redeployed teams improved on the previous quarter, it remained lower than their capacity at Ngwarati Mine resulting in production being 2 percent lower than the fourth quarter last year,” said Zimplats.

Ngwarati Mine has reopened for production and Zimplats has registered 6E head grade of 3,4 gramme per tonne and 6E recovery of 77,9 percent improved from the prior quarter as the ore mix stabilised.

“However, milling of lower-grade development ore from Mupani Mine after the precautionary closure of Ngwarati Mine resulted in a three percent decline from that processed in the prior comparable quarter in 2020.

“As a result of the lower mill grade, 6E recovery was marginallylower year-on-year due to the decrease in head grade,” said Zimplats.

In the period under review, total operating cash costs increased five percent from the previous quarter due to higher volume of ore mined and milled.

In addition, costs were negatively impacted by additional Covid-19 related expenditure.

“A total of US$1 million was transferred from opening stocks to operating costs during the quarter, as concentrate stocks were reduced in the period.

“The increase in production volumes resulted in an eight percent quarter-on-quarter decrease in operating cash costs per 6E ounce to US$655. Unit costs in the June 2020 quarter benefitted from the volume gains realised from the treatment of furnace reverts.”

A total of US$1,3 million was spent on exploration projects, with a further US$100 000 committed during the period under review.

“Exploration activities included mineral resource evaluation work, comprising approximately 10 171 metres of surface diamond drilling over existing projects on the two mining leases.

“The exploration activities improved geological and geotechnical confidence in scheduled production,” it said. 

The Chronicle