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Is it Employee Welfare or Paternalism?

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Is it Employee Welfare or Paternalism?

The mining industry in Zimbabwe is and has always been labour intensive and over the years, the management of labour has evolved from the Personnel management approach to the strategic human resource management approach.

By The Professor

Historically, It is without a doubt that the mining industry adopted a traditional approach to managing people at the workplace and its main objective was to manage employees in line with the organisational goals and objectives. This approach was dubbed Personnel management and emphasised on rules and regulations, efficient management of employees, labour relations, discipline, good communication and employee welfare. However, this traditional approach of managing employees was routine and predictable and concealed systematic autocracy from the employer. The majority of the workforce was predominantly migrant labour from neighbouring countries such as Malawi, Zambia and Mozambique.

The main focus is on the employee welfare or Paternalism approach in managing employees at the workplace. The mining industry has been at the apex in the employee welfare fraternity for many years. In most mining companies in Zimbabwe, there was a fully funded, well-resourced welfare department that ensured all the physiological and psychological needs of employees were met. The company would ensure their employees enjoy free accommodation, water, electricity, education and food hampers. Depending on the grades, senior employees would be accommodated at the low-density area and junior or lower-level employees would be accommodated at the high-density area. The welfare system was designed to ensure that the employees were well catered for and every need is well looked after.

The system also allowed local organised leadership through “Elders” that will represent different ethnic groups in the community. The elders would coordinate the activities of other community members and they would work with the Community officers. If there is a funeral in the community the company would provide food, transport, firewood and other funeral benefits. It was norm and practice that if a father dies during service, the eldest son would “automatically” replace him at work depending on the level of skill. In some cases, if the breadwinner passes on during service, the family of the deceased would be relocated to another house and would not be chased away. The organisation ensured continuity and job security for the family. It was difficult for non-skilled employees from outside the community to get a job in most mines. The schools were fully resourced and the teachers were well-motivated, enjoying almost similar benefits to a mine employee. No school fees would be required and the top students were offered education bursaries up to tertiary level.

The footprints of the welfare system in mines was visible in the support of sporting activities, especially soccer and athletics. The companies would ensure that the sporting teams perform at the highest levels and become the flagship of the organisation. For example Rio-Tinto, Mhangura, Hwange, How mine etc, dominated the elite local premiership. The system had a consistent supply of talent from schools around the community, young boys and girls would be employed by the company soon after graduating from secondary school.

However, one may argue that most big mines could afford to fund the welfare system because they enjoyed huge production profits and to this day some big mines are still offering lucrative welfare packages. The question is that, is it ‘Employee Welfare or Paternalism? As defined by the Websters dictionary (2010), Paternalism is the principle or system of governing or controlling a country, group of employees, etc. in a manner suggesting a father’s relationship with his children. The employment relationship is a father and children relationship, where the children look up to the father for every need. The children won’t dare to cross the lines marked by the father, because the consequences are dire. The employee will enjoy all the benefits from the employer only if they are disciplined, loyal and obedient. Arguably, a number of mine employees are bitter when they are out of employment, either by retirement or dismissal, because they won’t be prepared to face the harsh reality of paying utility bills. Unlike their senior management counterparts, most low-level employees do not own personal houses or immovable properties and this has led to stress and despair when they retire and have nowhere to go and become destitute.

In conclusion, it is the writers view that the welfare system in the mining industry pauperised and blinkered most employees as compared to other sectors in the country. In most big mines, Paternalism is well packaged in the welfare system in order to preserve the prerogative of management. However, the honours is upon the employer to act as a loving and caring father and encouraging its employees to prepare for life after work. Pre-retirement and investment seminars should be organised for employees and retirees. Salary based loans should be advanced to employees in order to build their own houses. The employer may engage local authorities for land to secure residential stands for the employees and assist in building houses. Employees should remain as the flagship of the organisations even when they retire from work, thus it is important to preserve the integrity organisation through employees and retirees.

Disclaimer :

The views in this article are personal views and do not represent any organisation or consultant. The writer is a holder of a Bsc. Hounors Human Resource management degree (MSU) and Personnel Management Diploma (IPMZ). He has worked in the mining industry for 17 years and held various positions.

Understanding Artisanal miners as an economic tool

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Understanding Artisanal miners as an economic tool

FACTS

  • There are approximately 100 million artisanal miners globally.
  • Approximately about Plus 500 000 artisanal miners in Zimbabwe as of 2017 UNIDO report.
  • Artisanal and small-scale production supply accounts for 80% of global sapphire, 20% of gold mining and up to 20% of diamond mining.

By Regis Jabulani Maburutse

“The Mukorokoza has increasingly captured the interest of the government, international organizations, and private corporations because of its growing role in the national economy and its impacts on society and the environment yet banks and micro-financing sectors have remained skeptical on this sector.”

According to Wayne Williams, founder and Managing Director, of Yagden Engineering, “manufacturers of small scale mining equipment have been overshadowed by the Chinese cheap and non-durable equipment yet banks and the micro-financing sector has not yet woken up to smell the coffee in this lucrative low hanging fruit.”

Asked on how this important sector could be tapped into, Williams further alluded that if Banks and the Micro-Financing sector could hold a mining indaba with the local manufacturers and come up with financing products that are tailor-made specifically for the sector then the underground wealth of this country could be tapped into for the betterment of the country.

The artisanal mining sector also provides new opportunities for private sector partnerships that seek to invest in the production of scarce resources while maintaining a supply chain that is compliant with international standards.

Williams extended that Korokozas are “the best prospectus and scanners of underground minerals for very small financial requirements,” further explaining that these miners do not waste their time if there is no resource available.

Despite the fact that “these Artisanal miners labour under archaic and difficult working conditions and live in extreme poverty, often receiving less than 9% of the retail price of the stones they extract.”

It is argued that if this sector could be formalized in the financial sector Zimbabwe will have an equitable distribution of cash as this sector deals with cash on a day to day basis.

A lack of internal controls leads to disconnected and often illegal mining and prevents miners from acquiring the licenses required to operate within the law, the equipment necessary to increase their gains, and the assets needed to diversify their livelihoods.

Yagden Engineering, located in Msasa Harare and Thorngroove in Bulawayo, are manufacturers of “hammer mills, crushers, separators, conveyor belting, Amalgam Barrels and allied products for the Mukorokoza in Zimbabwe and Africa at large.”

Williams noted that “not surprisingly, miners often become incentivized to mine quickly, sell fast, and rapidly move on to new sites. These practices have devastating economic and environmental consequences, negatively impact on fidelity Gold purchases.”

However, despite the negative and devastating economic and environmental consequences, Yagden Engineering fully supports the Mukorokoza as demonstrated by their commitment to this sector for the past 29 years.

According to Williams, through strengthening tenure security and clarifying property rights resource poverty and conflicts can be reduced significantly while also providing incentives for mitigating environmental impacts of this extractive sector.

“When artisanal and small-scale miners’ rights to prospect and dig are formal and secure, they are more likely to sell through legal channels, enabling the government to track the origin of minerals and prevent them from fueling conflict.”

Mukorokoza or an Artisanal and Small-Scale Miner have a presence in approximately 80 countries worldwide with Africa hosting the majority due to political and economic challenges in individual countries.  Mukorokoza is a subsistence miner who is not officially employed by a mining company but works independently, mining minerals using own resources, usually by hand, and for any business, this is a low hanging fruit.

It is widespread in developing countries such as Zimbabwe that such a hanging fruit is not tapped into due to social, political and economic fears. Though the informal nature and on the whole un-mechanized operation generally results in low productivity, the sector represents an important livelihood and income source for the poverty affected local population. It ensures the existence of millions of families in rural areas of Zimbabwe.

“About 100 million people – workers and their families – depend on artisanal mining compared to about 7 million people worldwide in industrial mining.” Extract from USAID Artisanal and small scale mining.

A 2017 UNIDO report by Andrew Mambondiyana [xi] estimated that between 2012 to 2017 over 500,000 Zimbabweans were engaged in artisanal mining; whilst another UNIDO report [xii] estimated two million people were dependent on artisanal mining for their livelihood in the absence of jobs in the formal employment sector.

This article first appeared in the Mining Zimbabwe Magazine June 2021 issue

How gold is smuggled from Zimbabwe

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How gold is smuggled from Zimbabwe

A report by the International Crisis Group last year estimated that cash-strapped Zimbabwe is losing at least US$1.5 billion annually through the smuggling of gold, mainly to traders in Dubai and South Africa.

By Dumisani Nyoni

The figure is, however, higher than the government’s estimates of US$1.2 billion a year lost through the illicit gold trade.

Zimbabwe boasts vast gold reserves, and the sector accounts for 60% of Zimbabwean exports.

Roughly 40 000 small-scale miners are registered in Zimbabwe, employing on average at least 10 workers each, according to the Zimbabwe Miners Federation (ZMF).

However, gold smuggling to other countries, particularly South Africa and the United Arab Emirates, is choking the sector.

For instance, just recently, a 33-year-old Zimbabwean man was arrested at O.R. Tambo International Airport in Johannesburg on May 8 with smuggled gold worth R11 million (about US$730,000).

Tashinga Masinire flew into one of Africa’s busiest airports with 23 pieces of gold which he did not declare, and when challenged “he did not have any permit or licence to be in possession to transport gold.”

But how is this precious metal leaving the country?

A new report titled: Illicit gold markets in east and southern Africa by the Global Initiative Against Transnational Organized Crime (Global Initiative) has tried to answer this question.

Beitbridge border 2
Travellers at Beitbridge border post. Image source: ZM

The report notes that smugglers are hiding smaller quantities of gold in clothing and headdresses, while larger amounts are stowed away in car glove compartments, spare wheels and any other parts of a vehicle that can be modified for smuggling purposes.

“Similarly, in Southern Africa, gold is easily smuggled from Zimbabwe into South Africa. Porous land borders make it easy for criminal groups to cross into South Africa where laundering opportunities and transport services are more readily available,” the report reads in part.

“While there are informal border crossings, the official Beitbridge border post remains a preferred route for gold smugglers. Smaller quantities of gold are hidden in clothing and headdresses, while larger amounts are stowed away in car glove compartments, spare wheels and any other parts of a vehicle that can be modified for smuggling purposes.”

In both east and southern Africa, Global Initiative said trucking is a popular way to smuggle large gold shipments.

On the Zimbabwe-South Africa border, both bus drivers and truckers are reported to smuggle gold.

On the Democratic Republic of Congo (DRC)–Uganda border, gold is hidden in trucks that can bypass COVID-19 restrictions to deliver ‘essential goods’. Bars weighing between five and 20 kilograms are stuffed underneath truck cabins, inside battery compartments and emptied gasoline tankers.

“As a result, some major buyers have invested in both gold and trucking. For example, certain major gold dealers in Harare have invested in the gas business, enabling the use of gas haulage trucks with secret compartments to smuggle gold into South Africa,” it said.

On the borders, there appears to be a lack of capacity and will to stop gold smuggling.

For example, in Zimbabwe, only luggage is subject to scans by customs officials so travellers without luggage are unlikely to be searched, the report says.

The report also reveals that larger smuggling operations will also involve collusion between criminal actors and border officials.

“In Southern Africa, Johannesburg is the regional gold magnet, although there are reports that significant and increasing amounts of gold are being exported directly from Harare to Dubai and other international destinations,” it said.

“In Johannesburg, locally produced gold and imports from neighbouring countries, especially Zimbabwe, is traded and laundered. Some is laundered into formal supply chains through local refineries.”

Similarly, Global Initiative says in Zimbabwe smuggling gold out of Harare’s airport is suspected of being done by powerful gold dealers and political elites.

It was reported that individuals moving gold as jewellery will make at least one to two trips each month, the report says.

The report notes that gold mined in Zimbabwe is moved to the trading hubs of Harare and Bulawayo before it is smuggled or exported out of the country. While Bulawayo’s reach is limited to gold mined in areas close to the town, Harare attracts gold from across the country.

Bulawayo buyers are generally less well-resourced and lack the US dollar buying power of their Harare competitors, it said.

Miners or buyers may also take gold directly to South Africa, especially from Matabeleland province in the south. Nearly 40% of gold mined in Matabeleland is believed to be smuggled directly to South Africa, it said.

In 2015, the Reserve Bank of Zimbabwe (RBZ) reported that the border was contributing to “… the most [gold] leakages that the country has ever experienced.”

The ease in which gold can be moved over the border makes it difficult to catch smugglers, Global Initiative says.

“It is reported that a smuggler will only be caught if the police have received a tip-off but they can easily pay a bribe to allow them to continue across the border.”

In other instances, the report revealed that gold is moved to South Africa through Botswana to avoid the heavily congested Beitbridge crossing.

South Africa’s strict lockdowns in response to COVID-19 have forced smugglers from Zimbabwe to increase their use of the Botswana route to come into South Africa.

A significant and growing amount of gold is also believed to be flown out of Harare airport to international transit and destination hubs, particularly the UAE, China and India and, to a lesser extent, Russia.

This route is suspected to be used by more powerful gold dealers and political elites.

“Indian buyers are allegedly the most likely to smuggle gold in this manner. There are also small gold flows between Zimbabwe and Mozambique in border regions, but the direction of the flows is unclear,” the report says.

Smuggling is rife

Gold buyers interviewed by the Global Initiative revealed that they were selling between 10% and 30% of their gold to the Fidelity Printers and Refiners (FPR) only to maintain their gold licences, with the rest being sold on the illicit market.

Major foreign buyers, often from South Africa, partner with Zimbabwean dealers to buy large quantities of gold on the illicit market, the report says.

Recommendations

As part of the recommendations to curb smuggling, the report suggests that criminal investigations should target the activities of key actors in the illicit gold trade, including senior government officials.

“This could include increased support for financial intelligence units and financial investigations. By providing information and support, foreign governments and international law enforcement bodies can support efforts to identify and prosecute key individuals, companies and financial institutions linked to or involved in the illicit gold trade,” it said.

“This can lead to improved reporting on suspicious transactions and knowledge of laundering methods and flows.”

It also said law enforcement, including customs officials, can also target enforcement activity at major transit points.

Because international airports are key bottleneck points in supply chains, effective policing there will have a significant impact on illicit gold flows, it said.

“In addition, smugglers tend to favour major border crossings when moving large amounts of gold. Targeting key road border crossings may therefore also reduce the ease with which gold is smuggled out of source countries.”

“Private sector actors, in particular refinery and smelter-level programmes, should strive to responsibly source gold from source countries, as opposed to refusing to source product from high-risk areas or disengaging from artisanal and small-scale gold mining (ASGM) entirely,” the report says.

Global Initiative said sourcing gold directly from source countries has the benefit of improving downstream knowledge of supply chains as well as establishing responsible sourcing practices, thereby also supporting the sustainable development of the sector.

It said increasing the number of ASGM sourcing options will help to grow and regularize responsible ASGM gold supply.

“This will require developing flexible and tailored solutions on the ground. This can include securing individual supply chains and increased acceptance of sourcing gold from mines that are in the process of achieving certification or meeting due diligence requirements,” it recommended.

“The transnational nature of illicit gold markets requires cooperation between law enforcement, customs services and other relevant bodies to combat criminality. In both source and destination countries, competent authorities need to be adequately staffed, funded and trained. Communication strategies between government bodies at the national level are also needed to close coordination gaps.”

Global Initiative also recommended that enforcement should also focus on transit and trade hubs, particularly the strengthening of enforcement controls at airports.

“Land borders are difficult to police, while the geographically remote and dispersed nature of ASGM makes it a challenge to regulate mine sites. This means enforcement efforts must look further downstream to transit and trade hubs for solutions.”

“This could include assistance to airlines to better enable them to detect smuggled gold, possibly in partnership with international trade organizations,” it said.

This article first appeared in the Mining Zimbabwe Magazine June 2021 issue

Exploration key in achieving US$12 billion mining industry

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Exploration key in achieving US$12 billion mining industry

The issuance of Exclusive Prospecting Order (EPOs) for the country to discover world-class deposits is of paramount importance for the mining industry to achieve the President’s projected US$12 billion mining annual revenue by 2023.

Rudairo Mapuranga

The mining sector truly has the potential to transform the economy which is expected to become an upper-middle-income earner by 2030, however, its major reliance on small-scale and artisanal mining will mean the vision like previously proposed blueprints will die a laughable death.

According to the US$12 billion roadmap, gold producers are expected to reach a target of US$4 billion while platinum and diamonds will weigh in US$3 billion and US$1 billion, respectively. Chrome, Nickel, and Steel are expected to generate US$1 billion, coal and hydrocarbons are also expected to produce US$ 1 billion. Lithium at the moment is expected to produce US$0.5 billion while other minerals are forecast to produce US$1.5 billion.

Without shooting down on their involvement in the resuscitation of the economy of Zimbabwe, small scale and artisanal miners cannot sustain mechanized mining of world-class operations. The country’s over-reliance on micro miners becomes a headache towards the achievement of the US$12 billion mining industry.

According to RioZim Chief Geologist Mr Patrick Takaedza, the country is not supposed to entirely depend on micro mining as artisanal miners are not capable of mining deep with low-grade mining being of significant challenge to them.

“Exploration is a very expensive and risky business which the small-scale miners have no capacity to undertake. The big companies who have that capacity will not invest in 10ha size claims for the simple fact that such a small area will never hold significant resource to recoup investment or produce for a couple of years”

“Recent thrust in exploration is to find deposits that are subsurface without any surface expression which the small-scale miner has no capacity to find”.

“Exploration diamond drilling costs approximately US$100 per metre. This means that EPOs focus on long term sustainability of the mining industry while small scale miners are just focused on near-surface, less than 100m reefs which sooner or later will get depleted and exhausted”

“Production will need to be replaced by deeper reefs or much lower-grade deposits and neither of these are attractive to the small scale. Artisanals will never sustain the mining industry because of these two simple facts. They can’t mine deep and they can’t mine lower grades’’ Takaedza said.

Although a notion has been pushed by micro miners and prospectors to ban issuing of EPOs, the notions must not be taken with seriousness because the basic concept of growing the mining industry is through mineral exploration.

Globally, to replace minerals that the country is mining, around 10 per cent of all capital expenditure in mining goes towards exploration, however, in Zimbabwe, it is near to 0 per cent with the Finance Ministry throwing up ridiculous budgets for exploration.

Clearly, Zimbabwe has lagged behind the rest of the world in terms of mining. The country used to be one of the largest producers of gold in Africa but currently, it is nearly close to nowhere because no new deposits are being found like in other countries in Africa.

Can Gold Contribute $4bn?

The only exploration happening in Zimbabwe at the moment is a way to see if old mines can be reinvested for example Caledonia mining, a company foreseen to be at the forefront in achieving the projected gold target is exploring mining properties in Chiundura which are Connemara North and Glen Hume. Connemara North is the northern section of the currently closed Connemara mine, which was previously owned by First Quantum Minerals while Glen Hume has historically produced significant quantities of gold. The country is therefore not prepared to look for new deposits but trying to explore the viability of old mines.

According to Chamber of Mines Chief Executive Officer Mr Isaac Kwesu, the country is hamstrung by lack of exploration leading to the country failing to discover new world-class deposits.

“We have significant, extensive gold deposits in Zimbabwe, although we have not been exploring much. The country has remained largely under-explored and has not been using modern exploration techniques, thereby limiting the discovery of new, richer deposits and this tends to slow down development and growth of the gold industry to a larger extent,” Kwesu said.

The production of gold has been disappointing in the past two decades with nothing there to show that the country can achieve the 100 tonnes target with gold production pick coming only in 2018 where 35 tonnes were recorded. The only serious investment for the country to achieve its target is by taking exploration have serious.

Is the Platinum target achievable?

Zimbabwe, which has the world’s third-biggest platinum group metal reserves has struggled to develop its mining potential with investors from Russia, Cyprus, Nigeria, and Kazakhstan yet to bring projects into production.

Platinum is earmarked to contribute US$3 billion, an amount based on optimisation programmes of the current three producing mines — Zimplats, Unki, and Mimosa which according to experts is near to impossible. The country should invest in exploration for Platinum concession holders to start operating by giving them economic incentives that encourage them to qualify and quantify their claims’ mineral potential and mining viability.

Without looking into how platinum mines can develop, the “use it or lose it” policy will be the only achievable government policy with platinum concession holders or new players not able to explore for new deposits and mining viability.

Is lithium target achievable?

Although Zimbabwe is one of the fifth largest lithium producers, it exports less than three tonnes of lithium per annum with only one operating mine in Bikita Minerals. Although three other projects like the Arcadia lithium project, Shamva, and Zulu expected to add into the country’s productions no significant change will be recorded for the sector to fetch half a billion.

Lithium exploration becomes the only viable means for the sector to contribute to the US$12 billion mining roadmap.

US$1 billion Diamond production achievable?

The country has only three operating diamond mining firms struggling to reach half a billion in revenue. One of the diamond operating mines Murowa diamonds reportedly running out of diamonds and depleting high-grade gems.

World largest diamond producer, Russia’s Alrosa is still carrying out exploration to find out the viability and richness of the diamond resource in the country.

The country should serious consider investing in the diamond industry if the US$12 billion mark is to be achieved by 2023.

The rewards of successful exploration and development can be large if a mineral deposit is discovered, evaluated, and developed into a mine. For a mining company, successful exploration and development lead to increased profits. This means the country needs to consider seriously investing in exploration through issuing more EPOs if the country is to achieve the projected US$12 Billion mining sector.

This article first appeared in the Mining Zimbabwe Magazine of June 2021

Key funder under pressure to pull out of RioZim’s Sengwa project

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Key funder under pressure to pull out of RioZim’s Sengwa project

The Industrial and Commercial Bank of China (ICBC), the world’s largest bank by assets, has come under pressure to withdraw funding from Zimbabwe’s planned 2,800MW coal-fired power plant at Sengwa.

This leaves what is potentially the country’s largest energy investment in doubt.

Zimbabwe country holds estimated coal reserves of 12 billion tonnes, according to data from the Ministry of Mines, and is escalating its search for investment to exploit it.

But environmental activist groups that have been lobbying ICBC to cancel the project funding claim the bank has committed not to fund the project.

“ICBC also confirmed that they will not fund the Lamu Coal Project in Kenya as well as the Sengwa Coal Project in Zimbabwe,” according to Go Clean ICBC, part of a coalition of 32 climate activist groups.

There was no comment from RioZim or ICBC. The bank is the world’s biggest lender, with assets of US$4.9 billion last year.

Rio Energy, a unit of RioZim, last year announced it had reached an agreement with China Gezhouba Group Corporation (CGGC) to build the long-delayed power plant for US$3 billion. CGCC, a subsidiary of the China Energy Engineering Corporation, one of the world’s largest construction firms, was to help raise funding for the project.

However, RioZim would now have to seek alternative funding if ICBC confirms it is pulling out.

Coal: under pressure

Earlier this month, Go Clean said it had met ICBC and convinced the bank to withdraw its funding to projects in Africa.

“There have been some major campaign developments regarding our engagement with the Industrial and Commercial Bank of China (ICBC). These developments include the Bank’s continued dialogue with the Go Clean ICBC coalition to chart a clear road map for ICBC to stop funding coal,” Go Green said in a statement.

Zimbabwean rights groups, such as the Centre for Natural Resource Governance, also campaigned against the Sengwa project, saying it goes against Zimbabwe’s commitment to cutting carbon emissions.

Zimbabwe currently generates about 1,200MW from its old power plants, less than its peak demand of about 1,400MW.

Zimbabwe Energy Regulatory Authority hopes the country will generate 1,100MW from non-hydro renewable energy sources by 2025, and the government floated tenders for 500MW of solar projects last year.  This year, Zimbabwe plans to add 100MW of solar energy from ongoing projects, Cabinet said on Tuesday.

However, Zimbabwe is still keen on using its coal resources.

The Sengwa area alone has proven coal reserves of 1.3 billion tonnes, and RioZim has previously said there is enough coal there to support a 10,000MW plant. But these resources remained unexploited over the years as Zimbabwe struggled to attract investment. However, in 2018, RioZim finally started receiving letters of interest from potential investors.

Banks going green

Many large funders have cut back on lending into fossils, such as coal and oil.

In May, the Asian Development Bank (ADB), a key investor in energy, announced it was cutting back on fossils. Last year, the UK announced that it would no longer fund coal, although British investment in projects such as Mozambique’s vast energy fields would continue.

Large international banks, among them Standard Chartered, BNP Paribas and Nedbank, have halted support for new coal mines.

Chinese banks – led by ICBC, Bank of China and China Construction Bank and Agricultural Bank of China – have led in coal investments. Between 2016 and 2019 these four banks alone sank US$35 billion into mining and US$70 billion into coal.

But Chinese banks may be having a rethink.

Speaking at the International Financial Forum Spring Meeting in Beijing in May, ICBC chief economist Zhou Yueqiu said the bank will “establish a road map and timeline for the gradual withdrawal of coal financing”.

This will limit the sources of capital that any current or future Zimbabwean government will have to invest in thermal power.

While calls are growing for the adoption of cleaner solar, many developing countries, Zimbabwe included, argue that they still need coal to grow their economies. They say they cannot afford a fast and affordable complete switch to renewables.

Germany, Europe’s biggest economy, announced last year that its roadmap to ditching coal would take 18 years and cost over US$44.5 billion.

Solgas’ solar farm at Dete: Zimbabwe is investing in renewables, but coal is not off the table

Sticking to coal

While Zimbabwe has granted incentives to push green energy, its best chance for electricity near-term self-sufficiency still lies in the coalfields.

In Hwange, nearly 1,000MW in new generation capacity is at various stages of development.

Local demand for coal will rise when two new power units at Hwange, being constructed by China’s Sinohydro, are completed next year. The new units will produce 600MW.

A new Hwange coal-fired power plant, the Zimbabwe Zhongxin Electrical Energy Limited (ZZEE), will start produce 50MW by October. It targets to ultimately produce 320MW.

Contango Holdings, a UK-listed investment firm, last year bought into the Lubu coal project near Hwange. Estimates there are of a “sizable resource” of 1.3 billion tonnes of coal, according to the company.

Apart from Hwange Colliery, other coal investors in the area include Makomo Resources, which is currently on an expansion plant, as well as Chilota Coal and Western Coal.

Chilota is investing an initial US$12 million on an open pit operation and targets to hit 100 000 tonnes of coal.

At Western Coal, whose special grant is held by businessman Billy Rautenbach, the company plans to invest at least US$20 million to establish an opencast mine. The mine would operate for six years before the company goes underground.

 

NewZwire

Mining industry unpacked in Zimbabwe

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Mining industry unpacked in Zimbabwe

This article seeks to give an overview of the minerals found in Zimbabwe. The country’s mining industry is poised for growth with the Government planning annual export earnings of US$12 billion in the next few years. 

This sector presents lots of investment opportunities. Its main attraction is the ability to earn foreign currency for businesses and the country.

The main sources of information for this article include the websites for the Chamber of Mines of Zimbabwe (COMZ) and the Minerals Marketing Corporation of Zimbabwe (MMCZ).

The COMZ classifies minerals into the following four groups:

l Base minerals

l Industrial minerals

l Energy minerals

l Precious metals

The classes are explained hereunder.

Base minerals or metals

According to COMZ a base metal may be distinguished by oxidising or corroding relatively easily and reacting variably with diluted hydrochloric acid (HCI) to form hydrogen. Examples include copper, iron ore, nickel, chrome and others such as lead and zinc.

Copper is ductile with very high thermal and electricity conductivity. It used as a conductor of heat and electricity and a building material. 

As regards iron the country has struggled to produce the ore due to the challenges at ZISCOSTEEL (Zisco) hence large imports of steel. This explains why the Government is making attempts to revive the failing giant. If Zisco comes back to life it will be a game changer of seismic proportions. Steel has multiple uses in an economy. 

According to the MMCZ, most nickel is used to make stainless steel with nickel compounds used for nickel-plating, to colour ceramics, make some batteries and as catalysts that increase the rate of chemical reaction. On the other hand, chrome ore resource is mostly found along the Great Dyke and is processed into ferrochrome. High carbon ferrochrome is commonly used in the production of stainless steel and high chromium steels.

Industrial minerals

Broadly, these minerals are used in industries based on their physical or chemical properties. They are not a source of fuel or metal. According to the COMZ, such minerals in Zimbabwe include asbestos, lithium, graphite, black granite and diamonds.

Zimbabwe is home to long fibre asbestos. Unfortunately the blanket restrictions on the export of asbestos into certain European and North American markets has frustrated the local production and export of asbestos. Zimbabwe has large deposits of lithium. 

Lithium is used in the production of batteries and has become popular with the advent of electric cars. The black diamond resource is considerable and the stone is used locally as well as exported.

The country produces diamonds at mines such as Murowa. There are  many developments around diamond mining in Zimbabwe, the latest being the formation of the Zimbabwe Consolidated Diamond Company.

Energy Minerals

Energy minerals include coal and coal-bed-methane (“CBM”). The country has vast resources of coal in the north-west and southern parts. Some of the producers of coal in Zimbabwe include companies such as Hwange Colliery Company and Makomo Resources. Coal is used for heating including for power generation at the country’s thermal power stations such as Hwange, Bulawayo, Munyati and Harare.

CBM is found in the north-western part of the country and is an alternative to coal.

Precious minerals or metals

According to the COMZ, a precious metal is defined as a rare, naturally occurring metallic element of high economic value. Chemically, the precious metals tend to be less reactive than most elements. They are usually ductile and have a high lustre. Historically, precious metals were used as currency, but are now regarded mainly as investment and industrial commodities. Precious metals found in Zimbabwe include gold, silver, platinum and palladium. 

Most people are familiar with gold production, its trade and export through Fidelity Printers and Refiners, now unbundled into two companies, including products made from gold. Gold is a significant foreign currency earner for Zimbabwe and excites a lot of businesspeople. 

Silver is soft, lustrous, reflective and possesses high electricity conductivity. Most silver is produced as a by-product of copper, gold, lead and zinc refining. The main platinum reserve is found in the Great Dyke. 

Most people are familiar with companies such as Zimplats and Mimosa which produce platinum. According to the MMCZ, platinum group metals (“PGMs”) mined in Zimbabwe consist of platinum, palladium, rhodium, ruthenium, iridium and osmium found along the Great Dyke from layered mafic-ultramafic intrusion extending 550 km. 

The application for the PGM elements is mainly hinged on their unique properties such as oxidation resistance, resistance to corrosion, chemically inertness, biocompatibility, high melting temperature, good conductivity, electronic and catalytic properties.

Growth and business opportunities

From a national perspective, there are real and significant growth opportunities in the mining industry hence the Government’s prioritisation of the sector. There are opportunities from a business or entrepreneurial point of view.

More articles on mining

Space permitting, more articles on mining will follow especially on applicable laws.

Disclaimer: This simplified article is for general information purposes only and does not constitute the writer’s professional advice. 

 Godknows Hofisi, LLB(UNISA), B.Acc(UZ), CA(Z), MBA(EBS,UK) is a legal practitioner / conveyancer with a local law firm, chartered accountant, insolvency practitioner, registered tax accountant, consultant in deal structuring, business management and tax and is an experienced director including as chairperson. He writes in his personal capacity. He can be contacted on +263 772 246 900 or [email protected]

Prospects Resource Arcadia Mine commissioned

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Prospects Resource Arcadia Mine commissioned

Mines and Mining Development Minister Hon Winston Chitando yesterday commissioned the Arcadia Lithium mine pilot plant at a ceremony held in Goromonzi.

Rudairo Mapuranga

Speaking at the commission of the Arcadia lithium plant and handover of the first production to the company’s offtaker SinoMine, Prospect Resources Executive Director Mr Paul Chimbodza said the company was now confident that it has the capacity to produce what the lithium market wants making it possible for the mine to build a bigger commercial plant in the next two years.

“This pilot plant you can consider it as a proof concept where we are now very confident that we can produce the quality product that the market wants.

“It also gives confidence to our funding efforts and we hope to reach financial closure very soon that allows us to build a bigger commercial plant.

“In the next two years, we should be building a plant that is 40 times bigger than this,” Chimbodza said.

According to Chimbodza Arcadia lithium project is Prospect Resources’ flagship project and is globally ranked in the top 10 hard rock deposits with the potential to become the 8th producing lithium mine in this world.

The company has taken this project from exploration through discovery and all the way through to a definitive feasibility study focusing on high certainty and low-risk operational assumptions resulting in the company’s total expenditure including the pilot plant reaching US$18.5 Million.

Prospect believes that the production and handover of its first petalite product to its offtake partner, shareholder, and investor SinoMine is a major milestone in the development of the Arcadia mine making it possible for the company to produce and ship hundreds of tonnes of on-spec product for both Sinomine and Sibelco.

The Arcadia mine is in a unique global competitive advantage in that it is one of the few global producers of technical grade, ultra-low iron petalite (0.05% Fe203) and when in full commercial production the company will be one of the largest producers of such in-spec product.

The event was graced by mining industry heavyweights including Mines and Mining Development Portfolio Committee chairman Edmond Mkaratigwa, Chamber of Mines CEO Mr Isaac Kwesu, ZMF President Henrietta Rushwaya and her CEO, Mines Ministry Deputy Minister Polite Kambamura among others.

About Prospect Resources

Prospect Resources Limited (ASX: PSC, FRA:5E8) is a battery minerals company with a focus on lithium in and around Zimbabwe, with the flagship project being the 70% owned Arcadia Lithium project, located on the outskirts of Harare in Zimbabwe.

Zimbabwe reverts to level 4 lockdown as Covid-19 cases rise

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Zimbabwe reverts to level 4 lockdown as Covid-19 cases rise

President Emmerson Mnangagwa has announced that Zimbabwe is reverting to Level 4 lockdown following a sharp rise in new coronavirus (COVID-19) infections.

Speaking from State House, President Mnangagwa said the measures are with immediate effect and will be in place for two weeks and then be reviewed thereafter.

Rushwaya get vaccinated against Covid 19
ZMF President getting vaccinated against Covid-19. Industry leaders should lead in encouraging miners to get vaccinated.

Businesses will operate from 0800hrs to 1500hrs in compliance with the general curfew running from 1830hrs to 0600hrs. Here are some of the measures that come into effect today:

  • Industry to decongest workplaces to 40 per cent with the rest working from home.
  • Commercial transport to remain operational but observe COVID-19 protocols.
  • Intercity movements prohibited except for the production and movement of food and medicines.
  • Travellers from countries with Alpha and Delta variants will be quarantined and tested on the first, fifth and tenth days at their own expense.
  • Ministers and legislators will be despatched to their constituencies to educate people on the vaccination programmes.
  • Travellers with fake COVID-19 documents to be arrested with a custodial sentence.
  • Deportees to be quarantined for ten days at a place of their choice.
  • People operating at marketplaces, tobacco auction floors cotton sales floors to be vaccinated before they can operate. Those who refuse will not be allowed to operate.

It is currently not yet clear if Mining will be added to essential services and be allowed to resume operations as previously. Mining Zimbabwe sent questions to relevant authorities and by the time of publishing we had not yet received a response.

About Covid-19

Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus. Most people who fall sick with COVID-19 will experience mild to moderate symptoms and recover without special treatment.

HOW COVID-19 SPREADS

The virus that causes COVID-19 is mainly transmitted through droplets generated when an infected person coughs, sneezes, or exhales. These droplets are too heavy to hang in the air, and quickly fall on floors or surfaces.
You can be infected by breathing in the virus if you are within close proximity of someone who has COVID-19, or by touching a contaminated surface and then your eyes, nose or mouth.

Zimbabwe Covid-19 Statistics 29/06/2021

Total cases

47,284

+842
Recovered

37,949

+132
Deaths

1,749

RBZ to allow miners to export some of their gold

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RBZ to allow miners to export some of their gold
Zimbabwe’s Apex bank will allow large-scale gold mining companies to directly export a portion of their bullion, an official said, as the bank gradually eases its control of gold trading in the country.

The Reserve Bank of Zimbabwe (RBZ) owned Fidelity Printers and Refiners (FPR) is the sole buyer, refiner, and exporter of gold in the country but has at times struggled to timely pay producers.

Reserve Bank of Zimbabwe’s director of exchange control Farai Masendu said in a circular that miners who increased gold production above their average monthly output would be allowed to directly export that portion.

This would “enable them (gold miners) to secure funding in form of gold loans, to enhance their gold production,” said Masendu.

The government says gold worth $1.2 billion is illegally exported from Zimbabwe annually. Small-scale miners, who extract most of the precious metal in Zimbabwe, blame low prices and late payments by FPR for the leakage.

Zimlive

Freda Rebecca wins Buy Zim award

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Freda Rebecca wins Buy Zim award

Buy Zimbabwe on May 7, 2021 held their highly subscribed 10th anniversary awards.

President Mnangagwa was the guest of honour. Several government ministers including the Minister of Industry and Commerce, Dr Sekai Nzenza were in attendance.

President Mnangagwa was honoured with the Champion of the Decade award, for his outstanding support for the Buy Zimbabwe campaign and the promotion of local content.

Freda Rebecca Mine, a subsidiary of Kuvimba Mining House won an award under the Buy Zimbabwe Mining Company of the decade category.

The event reinvigorated the Buy Zimbabwe campaign and was used as a platform to launch the Great Zimbabwean brands, which are the brands that Zimbabweans have come to adore and treasure over the past 10 years.

The Buy Zimbabwe Campaign was brought to life at the Inaugural Buy Zimbabwe Conference held on March 30, 2011 at the Rainbow Towers Hotel in Harare.

It started as a youth entrepreneurship programme called “My Own Boss’ founded by Munyaradzi Hwengwere, a former CEO of ZBC.

His vision was that unless Zimbabweans come to support each other, success in their entrepreneurial ventures would be elusive. From the “My Own Boss” concept, it was not a long step for Hwengwere to come up with the Buy Zimbabwe Campaign.

Buy Zimbabwe has positioned itself as the prime driver of preferred quality and competitive Zimbabwean brands for sustainable economic growth. It is a competitiveness driver whose mandate is to unlock the country’s potential through a structured support of the production and consumption of local goods and services.

The birth of Buy Zimbabwe was necessitated by the continued negative consumer perception towards local goods and services coupled with unfair pricing of foreign alternatives, resulting in many consumers, particularly those facing significant financial constraints, opting for imports.

With the Government coffers strained to support initiatives such as Buy Zimbabwe, there was a need to position the organisation as self-funding, influential and effective.

The good news is, however, that the Government has now committed to offering budgetary support to Buy Zimbabwe as announced by Finance and Economic Development Minister Professor Mthuli Ncube in the 2021 budget.

The Buy Zimbabwe message, therefore, is premised on the rationale that if we encourage our people to buy our locally produced goods, the nation will be able to save a lot of money through minimising leakages from the economy.

This money hopefully can be re-invested, to build competitiveness and economies of scale, employ more people and grow the economy. Buy Zimbabwe thus strives to create jobs, wealth and pride in Zimbabwean products.

This is possible when the Government ensures a predictable and stable operating environment.

It is, therefore, critical that as a country we implement our policies in an atmosphere which exudes a positive image and confidence that the Government is keen to realise the vision of an industrialised economy.

Buy Zimbabwe is in full support of the Vision 2030 through its initiatives including the local content policy.

Local Content Policy refers to a policy that requires local companies to use domestically manufactured inputs and goods as well as domestically supplied services in order to maximise on local; production in the economy.

Local content policy can stimulate use of local factors of production, such as labour, capital, supplies of goods and services, to create value in the domestic economy and hence expand the industrial sector.

We, therefore, hope with concerted efforts from ourselves and the Ministry of Industry and Commerce and other stakeholders, we will work together in pursuit of common vision of a prosperous Zimbabwe; we will achieve our dream of a proud and wealthy Zimbabwe.

After a remarkable ten years in which the tide significantly shifted in favour of local products which now dominate supermarket shelves, Buy Zimbabwe can look into the next ten years with optimism, knowing too well that we can attain the target of producing 80 percent of our goods and services locally.

 

The Sunday Mail

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