Mining ZimbabweLatest Mining News, Policy and Industry Updates

THERE is a need to come up with urgent lasting solutions towards addressing the problem of gold leakages, which continues to prejudice the economy of millions of dollars.

The Parliamentary Portfolio Committee on Mines and Mineral Development has expressed this concern, as it called upon the Government and relevant stakeholders to harmonise strategies to curb the scourge.

The sentiments come at a time when reports of people being arrested or intercepted while trying to smuggle gold out of the country have been on the increase. Recently, a 33-year-old Zimbabwean man was recently arrested at South Africa’s OR Tambo International Airport allegedly smuggling 23 pieces of gold worth R11 million into the neighbouring country. Another Chinese international was also arrested while trying to smuggle 7kg of gold out of the country.

Addressing the Kwekwe Press Club recently, Portfolio Committee chairperson, Mr Edmund Mukaratigwa, said the increasing cases of gold smuggling were worrying.

“This is a serious challenge as a country, and it’s worrying. This is attributed largely to the lower gold prices being offered in the country.

You find that the 60-40 retention is not doing miners any good,” said Mukaratigwa.

“This, coupled with the mismatch between parallel market and official exchange rates, leaves miners with no option but to seek alternative and favourable prices that are being offered outside the country.

“We have a lot of undeclared gold that we believe is being smuggled out of the country. These reported cases are just a tip of the iceberg. If such an amount of gold can go out of the country, how much are we losing as a country?”

Mr Mukaratigwa, who is also Shurugwi legislator, reiterated the need to tighten security and block leakages at the entry and exit points, including embracing technology for surveillance.

“We anticipate new measures, which are both ICT oriented and adequate training and human capacity building for manpower manning our exit and entry points,” said Mr Mukaratigwa.

“You find that we have some aerodromes that are located within the bushes and such areas are poorly or not manned at all. We need such areas to have state-of-the-art technology and manpower.

“We need to formalise artisanal miners and small-scale miners and to empower them and create syndicates that are organised that can conduct organised mining.”

The committee has since called for harmonised efforts that bring together all concerned stakeholders to have input in curbing of leakages.

“We need an integrated system where police work hand in hand with other stakeholders like airport officials, ministry of mines, President’s office and everyone involved to work in harmony.

“Not a situation whereby this department is pulling that side and the other one that side. An integrated approach is key,” said Mr Mukaratigwa.

“As Parliament, we are going to ensure that the gaps are closed. On our part we are going to make follow ups and put the Government to task so that all the gaps are closed. We need CCTV at our airports as the Government makes use of technology.”

Tightening security and enforcing compliance with mining regulations is critical at a time Zimbabwe is chasing the US$12 billion mining economy by 2023. Estimates show the country is losing at least US$100 million worth of gold every month, which is being smuggled.

Gold is the country’s biggest foreign currency earner and last year the country earned US$946m from US$1,3bn in 2018 from exports of the metal.

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The Chronicle

Prospect Resources has completed 92 per cent of the work required to commence production at the Arcadia Lithium pilot plant and has invited President Mnangagwa, to preside over the expected first production of high purity petalite from the Pilot Plant sometime this month.

Rudairo Mapuranga

According to the company Managing Director, Sam Hosack, Pilot Plant development works are progressing on schedule and on budget with approximately 92 per cent complete on Engineering, Procurement and Construction (EPC) scope.

“The Arcadia Project team has continued to meet the development timeline and I’m pleased to announce that we have completed approximately 92% of the works required to commence production at our Pilot Plant. With lithium market sentiment and prices having increased through 2021, a strong cash balance and the Company being shovel-ready to develop the Arcadia Project, Prospect is well-positioned to make the transition to development and production,” Hosack said.

Prospect has appointed the operations team for the Pilot Plant, with key personnel holding significant lithium operational experience.

The Company’s offtake partner Sibelco has requested additional tonnes over and above the original planned 200t so that they can seek qualification with a greater number of customers across Europe and Asia.

The early delivery of product will ensure homologation can be achieved in the customers’ production process and will establish clear additional demand for the product within the industry which will assist Prospect in leveraging the value of the Arcadia project as the world leader in the supply of this and it’s high-quality spodumene products.

Prospect has had expanded engagement with a range of strategic groups from across Japan, China, and Europe in recent months who have an interest in spodumene offtake and assisting with the development of the project.

The Company is also set to produce laboratory spodumene samples for a number of these parties over the coming weeks to facilitate further due diligence on the Arcadia Project.

The Company looks forward to welcoming the President, government officials and existing offtake partners to the site for the ceremony.

THE Chamber of Mines of Zimbabwe (CoMZ) incoming president, Colin Chibafa said he was determined to work with authorities to tackle problems undermining growth in the sector.

Chibafa, the Unki Mine chief finance officer, outlined his game plan as he took over the presidency from Mimosa Mining Company corporate affairs executive Elizabeth Nerwande in Victoria Falls.

He will be deputised by Golden Reef chief executive officer Thomas Gono, who was elected first vice-president during CoMZ’s annual general meeting and conference.

John Musekiwa, the Zimasco boss, was elected second vice-president.

Chibafa spoke as President Emmerson Mnangagwa warned during the conference that time was running out for the industry to achieve ambitious targets to transform the industry into a US$12 billion sector by 2023.

Zimbabwe’s mining industry has been generating about US$2 billion per annum.

But under a plan laid out by Mines minister Winston Chitando about two years ago, the industry is expected to ramp up output to boost volumes and turnover to US$12 billion per annum.

“I will leverage on the work that the outgoing president has done,” Chibafa.

“I would like to consolidate the many gains that she (Nerwande) has made in maintaining a good relationship with government. As the incoming team, we will continue to engage with government in a collaborative manner to resolve the challenges that we face. The chamber will continue to work with the government,” added Chibafa.

Nerwande said, while significant ground had been covered in the past two years to strike a common understanding with government, several issues were still to be resolved.

“Over the past two years the chamber has worked closely with government in many areas resulting in some improvement in the operating environment,” she said.

“While there are still areas that require attention of all parties to ensure improvement and enhance competitiveness of our industry, it is safe for us to say that the stakeholders have made significant strides to find each other. We have quite a number of areas that are still outstanding (such as) the Mines and Minerals Act amendment, which is still under consideration. The same goes for the computerised mining cadastre system and completion of comprehensive mineral development. We also appeal to government to align monetary and fiscal policies and foreign currency usage and management and allow exporters to have sufficient resources to grow and sustain their businesses,” she said.

“Some of our members have experienced persistent shortages of critical imported inputs as a result of continued effects of low foreign currency retention levels. The retention levels which were increased to 70% at some point were latter reduced to 60% causing severe viability constraints,” she added.

The issue of foreign currency retention has been a hot topic in the past few years, with players warning that there will be no growth unless mines are allowed to access all their foreign currency to fund operations.

But last month, Finance minister Mthuli Ncube announced several measures to provide relief to industry.

Exporters, including miners, currently keep 60% of their foreign currency earnings in hard currency, while 40% is sold to  the central bank at the official exchange rate.

But under his measures companies that export above their monthly average will be allowed to retain 80% of what they earn from the increased portion.

“In order to encourage gold production and deliveries to Fidelity Printers and Refiners (FPR), gold producers, who deliver quantities above their average monthly deliveries shall be entitled to a retention level of 80% on the incremental portion of the gold delivered to FPR,” Ncube said.

“Those companies listed on the Victoria Falls Stock Exchange will be entitled to a 100% retention level of their incremental exports,” he said, noting that the sweeteners  were targeted to “encourage listing and participation of
firms on the Victoria Falls Stock Exchange and Victoria Falls Offshore Financial Centre”.

NewsDay

DIVERSIFIED mining group, Premier African Minerals, has made a placement of £1 million for the ongoing definitive feasibility study at the company’s Zulu Lithium project in Matabeleland South province.

The lithium mine is one of the 25 projects that the Government — through general notice 328 of 2021, has granted Exclusive Prospecting Orders for a period of three years up to 2024.

Premier has announced a placing to raise £1 000 000 before expenses at an issue price of 0,16 pence per new ordinary share for the ongoing Definitive Feasibility Study (DFS) at its Zulu Lithium project.

The group’s chief executive officer, Mr George Roach, was quoted as saying: “The detailed planning, construction of the exploration camp, road repairs and location of equipment to site, and other work associated with the resource expansion and definition drilling for the DFS at Zulu is progressing and to date has been funded from Premier’s retained cash resources.”

The placement is intended to ensure there is no interruption to the work in progress at Zulu as well as allowing additional time to enhance value through the DFS, and comprehensively and without any pressure assess other options available to fund the balance of the DFS.

“It is worth noting that this placement today represents a nominal dilution of approximately 3,5 percent and is a small price to pay for retention of 100 percent of Zulu and the potential upside from the Exclusive Prospecting Order,” said Mr Roach.

Details of early drilling at Zulu and an update on Premier’s RHA Tungsten project, among other projects outside Zimbabwe will be released later this month.

In April, Premier announced that it had initiated a DFS and a funding strategy to be applied in future development of its Zulu lithium and tantalum project in Matabeleland South. It said the projected timeline to complete the DFS at Zulu had been ratified by Bara Consulting, a United Kingdom-headquartered independent engineering consultancy focused on serving the global mining industry.

The mining group has also announced that a geological mineral processing engineering firm, Hainstech, completed a site visit to Zulu and reported on the deposit and its potential as announced on August 1, 2017.

The Chronicle

Policymakers are fully aware of the key actors in illicit gold trading but remain short of tightening screws to mitigate the scourge, an independent group lobbying for the promotion of human rights and environmental protection, the Southern Africa Resource Watch (SARW) has noted.

In a report titled -Decrypting Illicit Gold Trade in Zimbabwe- SARW says efforts to bring sanity into the sector remain indefinable.

“It appears that policy-makers are aware of some of the key actors behind illicit gold trade, but tightening the noose around these illicit actors is proving to be elusive. At one point (in 2018), foreign gold buyers were lauded for increasing formal gold deliveries from ASGM, whilst they were also fingered for being involved in illicit gold trade,” reads the report.

Government has over the years put various interventions to curb the illicit trading of gold, including introducing incentives for unregistered gold producers to deliver gold to Fidelity Printers, the stateowned sole gold buyer in the country but the illicit market has remained lucrative owing to downside effects of State interventions.

While the Reserve Bank of Zimbabwe has been assisting small scale miners to mechanize in the past few years, the foreign currency retention policy adopted by the Bank has been the biggest setback in attracting gold deliveries.

“Later on, government announced a new gold trading framework, which sought to weed out foreign gold buyers who were not heavily involved in gold production on. For one to qualify as a large gold buyer, the bar was raised higher. Part of the requirements included monthly gold production of at least 50 kgs of gold per month,’

“Another red flag that RBZ raised (that has not led to bringing to book the culprits) involves the arbitrage opportunities exploited by actors in the jewellery industry. Jewellers once had the opportunity to buy gold in RTGS and sell the gold back to FPR to earn scarce US$, or to export jewellery, earn foreign currency, retain 35 per cent and surrender the rest to RBZ, making a huge profit t in the process,” read SARW report.

The report also noted that there is lack of transparency and accountability in the production of the yellow metal.

“Gold export incentives evidently had a huge collateral impact – illicit gold flows into the country, incentives outweighing tax revenue needed to finance development like royalties, and massive inflation. It is confounding that even the official data on gold production from LSM, and from the Chamber of Mines of Zimbabwe, refer to gold deliveries as production data.

“This lack of transparency and accountability creates huge opportunities for gold losses through under-declaration. Whilst some of the challenges behind illicit gold trade are beyond government control, the picture painted above clearly shows that government can make huge progress to curb illicit gold trade through an enabling gold trading framework that is fair, stable, transparent and accountable.

“Getting a high-resolution on picture of the illicit gold trade is, without doubt, a mountainous challenge. That said, nuggets of information on are available for policy-makers to come up with wellsculptured policy measures to curb illicit gold trade in Zimbabwe.” noted the report.

SARW says Government institutions involved in gold production and trade have lowered the bar for the illicit gold trade to flourish.
“The culture of transparency and accountability must be fostered for a fighting chance against illicit gold trade.” SARW said.

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MATABELELAND North province would leverage on its vast natural resources to transform its economy with mining investments expected to unlock more job opportunities.

The Minister of State for Provincial Affairs, Richard Moyo, said this during the Chamber of Mines of Zimbabwe Annual Conference, which ended in Victoria Falls last Friday.

“My province is focusing on mining sector providing the impetus for economic growth as it leverages the geological endowment in my province,” said the minister.

“As you may be aware, Matabeleland North is expected to play a pivotal role in the implementation of National Development Strategy (NDS1) and ultimately feed into the attainment of the country’s vision of being an upper-middle-income economy by 2030.”

Matabeleland North province is the hub for coal to energy value chain investments, which will unlock up to US$1 billion under the coal and hydrocarbons focus.

As such, Minister Moyo said his province was geared to contribute towards realisation of an upper-middle-income vision by 2030.

The province is already focused on drafting a development plan that aligns all economic projects to NDS1. Under this drive, he said various mineral resources will be exploited to impact positively in the entire economy.

“Mat North has great potential to contribute significantly towards achieving US$12 billion vision for the mining sector by 2023. As a province we are making efforts to increase the capacity of coke and coal production for existing collieries,” he said.

President Emmerson Mnangagwa officially opened the convention on Friday and pledged increased Government support for the mining sector. Despite the Covid-19 disruption, the mining sector is pushing towards attainment of a US$12 billion milestone by 2023.

Last year President Mnangagwa visited several mining investments in Matabeleland North, which are at different stages of implementation.

“Significant progress has been made so far by the coal and hydrocarbons projects, which are under our periodical assessment,” said Minister Moyo.

He called for increased value addition and beneficiation saying the mining resources are finite hence the need to diversify.

The Chronicle

List of Mines listed for forfeiture in Mashwest

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