Mining ZimbabweLatest Mining News, Policy and Industry Updates

Lafarge CEO Precious Nyika has left the company after the company was hit with a heavy Reserve Bank of Zimbabwe fine over exchange rate violations, industry sources say.

Lafarge chair Kumbirai Katsande, in a memo to staff seen by newZWire on Thursday, said Nyika had “championed capital projects and introduced new technologies in building”, but that she was leaving “to pursue interests outside the Holcim Group”.

While the company has not given reasons for Nyika’s departure, executives said the board took the decision after central bank imposed a fine of the equivalent of US$1 million under exchange control regulations.

“An audit raised several corporate compliance infractions that, together with the forex issues, led to the board this week deciding on her departure,” an official familiar with the matter said.

No immediate comment was available from Nyika. RBZ has not commented on the nature of Lafarge’s violations.

CFO Amr Elmowafy Ali Mowafy is interim Lafarge CEO.

Under Nyika, Lafarge has seen strong growth over the past year.

Lafarge grew cement sales by 23.7% between January and May, taking advantage of strong demand from growth in construction.

In April, Lafarge commissioned a new US$2.8m dry mortar plant, part of a US$25m expansion plan by the cement maker to take advantage of growing demand for building materials.

The new plant, supplied by Turkish company Varlik, will sharply increase output of dry mortar products – such as adhesives and agricultural lime – from just 7,000 tonnes per year to 100,000 tonnes annually, equal to national demand.

Lafarge also plans to use output from the new plant to launch 3D-printed low-cost housing, which would be a first for Zimbabwe.

A separate Vertical Cement Mill plant, part of Lafarge’s expansion plan, is under construction and expected to be complete in the first quarter of 2022. This plant will more than double Lafarge’s annual cement milling capacity from the current 450,000 tonnes to 1 million tonnes_Newzwire

Gold miner, Caledonia Mining Corporation, which owns and operates the Blanket mine in Gwanda has embarked on a dividend increase structure. This development comes as the company’s Blanket mine expansion project nears completion. 

Rudairo Mapuranga 

According to Caledonia Chief Executive Officer, Mr. Steve Curtis, Blanket mine has been operating extremely well, encouraging Caledonia to regularly increase and pay dividends every month. 

“So very cash generative, very good operation and that allows us Caledonia to be a regular dividend payer to our shareholders. We have recently embarked on a dividend increase structure as we get closer and closer to the project being completed.” Curtis said. 

Caledonia Mining Corp has been self-funding the growth and development of Blanket Mine with the mine production increasing to about 40 percent annually.  

“We have no debt; we are a very cash generative so we are able to be the master of our own destiny. We self-funded this whole US$70 million project out of our own resources but we are listed. If we do need access to market, we have got the support of financial market.  

“We have an internal growth potential of about 40 percent from were produced in 2020. We did 58 000 ounces and we are going to go up 80 000 ounces. We are a relatively low-cost producer for an underground mine,” he said.  

Caledonia’s financial performance led to it paying a total dividend of $0.12 apiece in April, while a further dividend at the increased rate of $0.13 apiece was paid in July. 

Caledonia is currently developing a new mine underneath Blanket Mine as it seeks to produce over 2 tonnes of gold annually. 

Gold deliveries to Fidelity Printers and Refiners (FPR) more than doubled to 2.94 tonnes in August from 1.27 tonnes reported in the same month last year amid rising confidence after authorities benchmarked prices to those offered on the international market.

FPR gold operations head, Mehluleli Dube, said the recently promulgated policies such scrapping of taxes on small scale miners have spurred on deliveries.

“This has seen August deliveries reaching 2.94 tonnes from 1.27 tonnes in August last year with total deliveries soaring 20% to 15.8 tonnes from 13.2 tonnes last year,” Dube said.

He said despite June having high figures, the overall gold deliveries were below those of 2020 with a first overall increase started to be recorded in July.

Experts said the country will surpass last year’s gold export receipts due to an increase in gold deliveries and firming international gold prices.

Those who deliver over 20 kilogrammes per month are given an extra 5% incentive and this has pushed volumes.

The introduction of incentives and timeous payments has reduced smuggling. Small scale miners delivered 1.91 tonnes in August 2021 and large miners delivered 1.03 tonnes in the period.

Zimbabwe Miners Federation chief executive Wellington Takavarasha said delivering to FPR was now more lucrative than all other buyers which has seen his constituency delivering the yellow metal through official channels.

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

The government wants to establish new gold centres following a sudden increase in output.

The 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.

In August, the Cabinet approved proposals for the establishment of over 20 gold centres by mid-2022.

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.

Some of the gold centres are expected to be established in Makaha, Odzi, Mount Darwin, Shamva, Mazowe and Silobela.

Business Times

The Victoria Falls Stock Exchange (VFEX) has signed a Memorandum of Understanding (MOU) with the Dubai Gold and Commodities Exchange (DGCX) as the two seek to strengthen bilateral cooperation and exchange knowledge around commodities trading.

VFEX is a subsidiary of the Zimbabwe Stock Exchange (ZSE) and is a US Dollar trading exchange.

Justin Bgoni, the VFEX chief executive, said the MOU will culminate into an exchange of ideas and technical know-how with a view to replicate the Dubai Gold and Commodities Exchange.

“We are looking forward to a fruitful exchange of ideas and the technical know-how that should culminate in us being able to replicate the success of the Dubai Gold and Commodities Exchange in our own country, and under the proposed VFEX –driven commodities exchange,” he said.

Bgoni said the DGCX is the region’s leading derivatives exchange and has played a pioneering role in developing the regional market for derivatives trading, clearing and settlement.
The DGCX Group owns and operates the region’s largest and only multi-assets Clearing House-Dubai Commodities Clearing Corporation.

Les Male, the chief executive officer of DGXX said the partnership with VFEX is part of a wider strategy to strengthen commodities trading across Africa.

“We are confident that our deep knowledge and expertise will help bring value to VFEX as they kick start the Offshore Financial Services Centre (OFSC) for the special economic zone in Victoria Falls,” he said.

He added that the partnership also builds on the group’s expanding international footprint and represents another opportunity to build stronger inroads into Africa, a rapidly growing market with enormous potential.

According to the MOU, DGCX will also support VFEX with the development of a clearing and settlement commodities exchange framework.

The agreement which spans for one year was signed during a high level Zimbabwean ministerial delegation, which also included the Minister of Finance and Economic Development, Professor Mthuli Ncube.

Zimbabwe is the second African country to seek an alliance with the DGCX. Earlier this year the Dubai-based exchange signed a memorandum of understanding with the Financial Markets Regulatory Authority in Sudan to boost gold trading between the two countries.

Businessweekly

Australian Stock Exchange-listed mining and exploration junior, Prospect Resources Limited has announced that Luzich Resources has executed the option agreement to buy 100 percent of the company’s Penhalonga Gold project.

Rudairo Mapuranga

According to Prospect, Luzich will complete the buying of the gold mine which was pegged at US$1 million within 30 days.

Late 2020, Prospect announced that it had entered into a binding term sheet with Luzich Resources Africa, an affiliate of Luzich Partners for the asset.

In the deal, Luzich was expected to pay a non-refundable deposit of US$200 000 within 45 days of the date of the agreement and US$800 000 within 180 days.

 “Prospect Resources has announced that Luzich Resources, an affiliate of Luzich Partners LLC, has executed the option agreement to buy 100% of the company’s Penhalonga Gold Project as announced on 23 October 2020 and pay the balance owing of US$750,000 of the US$1,000,000 total Agreement consideration.

“US$200,000 of the balance owing has been paid as an additional non-refundable instalment of the purchase price, and a further US$550,000 will be paid at Completion of the Sale and Purchase Agreement within 30 days.” Prospect Resources Managing Director Sam Hosack said

About Prospect Resources Limited

Prospect Resources Limited is an ASX-listed lithium company based in Perth with operations in Zimbabwe. Prospect’s flagship, Arcadia Lithium Project is located in the outskirts of Harare in Zimbabwe. The Arcadia Lithium Project represents a globally significant hard rock lithium resource and is being rapidly developed by Prospect’s experienced team, focusing on the near-term production of high purity petalite and spodumene concentrates.

Arcadia is one of the most advanced lithium projects globally, with a Definitive Feasibility Study, Offtake Partners secured and a clear pathway to production.

Zimbabwe Miners Federation (ZMF) will on Thursday host a webinar meeting with Zimbabwe Revenue Authority (ZIMRA) officials to look into the challenges faced by the Artisanal and Small-Scale Mining (ASM) sector on taxation, ZMF CEO Wellington Takavarasha has said.

Anerudo Mapuranga

The ASM sector has a myriad of problems characterized by low productivity, under-capitalisation, lack of technical and management skills, lack of transparency in their activities; some of which are unregulated and contribute to environmental degradation. This has made it complex for the taxation of the sector to be clear.

According to Takavarasha, the administration of the current tax regime in the sector has many problems which need to be addressed as a matter of urgency, hence ZMF will host a webinar meeting with ZIMRA officials on Thursday the 9th of September 2021 at 1000 hours to deliberate on these challenges.

“The taxation of the artisanal and small-scale mining sector remains complex. According to Zimra 2011, there are major challenges that are faced during the administration of the current tax regime in the mining sector which include transfer pricing and tax evasion,” Takavarasha said.

“ZMF will host a webinar meeting with ZIMRA officials on Thursday the 9th of September 2021 at 1000 hours to deliberate on the challenges in the taxation of the ASM sector. There will be a plenary session thereafter. Link codes for the meeting will be provided on Wednesday 8 September 2021,” he added.

Zimbabwe has a diverse mineral resource base that has not been significantly explored. The mining sector has emerged to become the key economic sector in the country in terms of contribution to the GDP exports, fiscal revenue FDI and employment.

ZIMBABWE’S biggest platinum miner, Zimplats, has declared US$85 million dividend for the financial year ended June 30, 2021.

During the financial year under review, the group realised revenue amounting to US$1,35 billion compared to US$869 million in 2020 for metal sales to Impala, its parent firm.

Sales to Impala are governed by a contract, which stipulates when payments are to be received and the prices to be effected.

“After the reporting date, the board of directors declared a final dividend of US$85 million (equating to 79 US cents per share) to shareholders on record as at 20 August 2021,” said the company.

Revenue from the sale of white matte and concentrate is recognised when the product has been delivered to Impala where it is subjected to further processing in accordance with contractual terms.

“No element of financing is present due to short-term nature of group contracts and credit terms are consistent with market practice,” it said.

Bank borrowings comprised a loan facility for general business purposes from Standard Bank of South Africa Limited.

The loan, which was guaranteed by Impala Platinum Holdings Limited, is a revolving facility of US$85 million and bore interest at three months LIBOR (London Interbank Offered Rate) plus seven percent per annum.

The first capital repayment installment amounting to US$42,5 million was made during the year ended 30 June 2019 and the balance of US$42,5 million was paid in December 2019.

On ore and concentrates haulage, Zimplats said it has a contract for haulage trucks used for the transportation of ore and concentrates between Ngezi and the Selous Metallurgical Complex.

The contract has a period of five years from November 1, 2017 to October 31, 2022.

“As at 30 June 2021, the present value of the lease liability was US$2,7 million (2020: US$4.3 million) at a discount rate of 9,6 percent,” said the platinum miner.

The Chronicle