Mining ZimbabweLatest Mining News, Policy and Industry Updates

Zimbabwe’s gold export receipts have plunged 35% to US$78.4m in May from US$120m achieved in the prior comparative period as the yellow metal deliveries to the country’s sole buyer and marketer, Fidelity Printers and Refiners dropped.

While receipts in January this year were lower than of the prior comparative period, export receipts from February to April 2021 were higher than the same period last year.

But the continuous fall in gold deliveries has been attributed to the plunge in May.

Commenting on the plunge, the Reserve Bank of Zimbabwe (RBZ) governor John Mangudya told Business Times that subdued gold deliveries have culminated into a decrease in export receipts.

“The country made total gold shipments of US$78.4m in May 2021 from US$120.1m earned during the same period last year.

This is the first time since February this year that the country’s gold export earnings have plummeted on a month on month comparison basis due to the subdued deliveries,” Mangudya said.

Gold export receipts in January 2021 were at US$53.1m from US$98.1m during the same month last year on subdued deliveries due to Covid-19 effects, heavy rains that the country has experienced in January and the failure to remove costs on small scale gold miners.

In February  this year the country shipped out gold worth US$66.1m compared to gold shipments  worth US$56.1m while in March 2021 gold export receipts  reached US$81.2m  compared to  US$71.9m against the  same month in 2020.

Overall, gold export earnings decreased 8% to record US$375.8m during the first five months of the year against US$409.68m recorded during the same period last year.

Gold deliveries have bounced back for the first time in March 2021 after recording a positive improvement of 2% to reach 1.80 tonnes from 1.77 tonnes recorded during the same period last year due to the slowing down of the rains in the period under review.

Small scale producers’ subdued performances have caused a general decline in gold output in the past year with the primary producers maintaining the same output over the years.

Ironically, small scale miners are getting 100% forex retention threshold while large scale miners are getting 60%.

Recently, Fidelity Printers and Refiners general manager Fradreck Kunaka revealed that the country could be losing over 30 tonnes yearly valued at US$1.7bn due to smuggling and unfavourable mining policies.

Kunaka said the country should totally liberalise the gold sector to combat smuggling and compete at the highest level with foreign gold buyers.

Meanwhile, Gold Miners Association of Zimbabwe chief executive Irvine Chinyenze believed the country could earn more if fundamentals are addressed.

“…Government should come up with friendly policies that encourage the miners to deliver gold to the FPR.

“Unnecessary costs like that of importing cash should be removed and there is a need to bring in more new players to allow competition to improve bullion deliveries,” Chinyenze said.

The country’s gold output plummeted 31% to record 19.052 tonnes during 2020 from 27.66 tonnes recorded during 2019 due to Covid-19 effects, delay in payments and low foreign currency retention levels.

A recent mining report advised that the government should pay gold producers at world prices to woo them into selling the yellow metal through the formal channels.

The report blamed FPR’s flawed centralised gold buying scheme and called for the law to bring complicit powerful politicians to book as they are believed to be sponsors of machete gangs’ violence in the Midlands Province and in Mazowe District.

Economic analysts said the 100 tonne gold output target by 2023 can be achieved if the authorities put in place friendly mining policies and incentivise miners.

Business Times

THE mining industry is on the right path and has made significant progress towards attaining a US$12 billion industry by 2023, with key contributors making huge strides in the production matrix.

Government envisages a US$12 billion mining industry by 2023 with gold, platinum group metals, hydrocarbons like oil and gas, coal, gold, lithium, chrome and ferrochrome driving the growth.

The thrust will be characterised by optimum investment and output levels in all minerals.

In an interview on the sidelines of the ongoing annual mining indaba hosted by the Chamber of Mines here, Mines and Mining Development Minister Winston Chitando said all key sectors had made significant progress in production.

“We are quite advanced towards achievement of the US$12 billion mining industry by 2023 and we are really on track towards the target in terms of major contributors. All that is going to be discussed for review at the conference which is going to be officially opened by His Excellency President Mnangagwa,” said Minister Chitando.

He said there are huge developments in the gold sector with many projects underway such as Caledonia which signed an agreement with Government to produce over 15 tonnes of gold by 2030, while Eureka, and Shamva will be producing over five tonnes.

The 2023 milestones are premised on gold contributing over 100 tonnes, and the small-scale gold producers also have a part to play, said the minister.

The small-scale mining industry is involved in gold, chrome and gemstones production.

On the platinum side, Minister Chitando said Unki Mine, Zimplats and Mimosa are all expanding to increase capacity.

He said there are entrants who will also be making significant developments.

The Zimbabwe Consolidated Diamond Company has so far produced over a million carats of diamonds while other players like Murowa have announced expansion programmes.

There will be new mining developments for diamond mining in Tsholotsho in the next months, Minister Chitando said.

He said ZimAlloys, Zimasco and other upcoming players will be making significant contributions in the ferrochrome sector feeding into the consolidated carbon steel production.

Minister Chitando said the coal industry is poised for huge strides as there is immense capacity by a number of projects which President Mnangagwa toured last year.

He said one of them is Dinson Colliery which recently inaugurated a 150 000 per annum coke production and is working on a second coke battery while civil works have started on the one million tonnes per annum coke battery which will be the biggest in Africa.

The minister said all these projects are ongoing and point to the attainment of a US$12 billion mining industry by 2023.

The mining indaba is being held under the theme: “Navigating turbulent times — Sustaining growth of the mining industry beyond Covid-19.”

An Oil and Gas Symposium with the theme “Revealing Zimbabwe’s Old and Gas potential” was held in the morning followed by a platinum beneficiation symposium in the afternoon.

Minister Chitando said Zimbabwe is poised to be a net exporter of electricity from oil and gas and also have its own platinum refineries.

He said these were the discussions around the two symposiums and “the long and short of a report from an expert is that it is feasible and it makes sense, we will walk together with platinum producers.”

The Chronicle

A Chinese firm, Tsingshan Group, is looking to speed up the setting up of a multi-million dollar Energy Park in Hwange, Matabeleland North Province, which will see the construction one of the biggest coke battery facilities in Africa, Business Times has established.

The energy park in Hwange, which will entail a 1.3m tonne coke battery and a 500 megawatts power station, is expected to play a huge role in supporting Tsingshan’s proposed multi-million carbon steel plant in Mvuma.

The Chinese firm has since completed the construction of a 150 000 tonne coke battery plant while construction of an additional 150 000 tonne coke battery plant has since resumed.

It is understood that before the end of this year, Tsingshan will commence construction of a third 1m tonne per annum coke battery, which will be the biggest in Africa.

“In terms of the project, the three coke battery plants will be housed into an area which will be called the Tsingshan Energy Park, which will house a capacity of 1.3m tonnes of coke production,” Mines and Mining Development minister, Winston Chitando said.

He added: “What will also happen is that in that energy park, it will house a 500 Megawatts (MW) power station and interestingly all that 500 MW power station will be entirely for the use of Tsingshan. The power station will be housed in that Energy Park.

Since the signing of the Memorandum of Understanding (MOU), with the government, Tsingshan has moved with speed to implement its vision in the spirit of the MOU.”

Top executives from the Tsingshan Group are expected to visit Zimbabwe in July for high-level engagements with President Mnangagwa’s government.

A dispute between Zimbabwe’s biggest integrated ferrochrome producer, ZIMASCO and South African firm Portnex International is set to be resolved through an arbitration process, Business Times can report.

The dispute emanated from lease agreement debts running into millions of United States dollars.

Portnex and ZIMASCO, which operates furnaces in Kwekwe, chrome ore claims in Shurugwi, Guinea Fowl, Lalapanzi and Mutorashanga, entered into a five-year US$12m lease deal, which saw the South African firmoperating ZIMASCO’s Western plant in Kwekwe.

In addition to leasing furnaces, ZIMASCO also provided Portnex with support services on a cost recovery basis.

The support services include laboratory, weighing, sizing and crushing, transport, security, and secondary metal recovery.

Also, ZIMASCO, allowed its mining contractors to supply chrome ores from ZIMASCO’s claims to Portnex’s Western plant furnaces.

However, the lease deal expired last year, resulting in ZIMASCO reclaiming its Western Plant operations.

In fact, Portnex stopped operating the plant in 2019, citing operational challenges, before its lease expired in December 2020.

Consequently, there have been disagreements on the amount that Portnex owes ZIMASCO.

Well-placed sources at ZIMASCO told Business Times that a private arbitrator is set to be appointed to resolve the matter.

“There is a continued disagreement on how much Portnex owes Zimasco considering that some of the debts were accrued when the exchange rate was at 1:1. The matter had to be submitted before the courts for arbitration,” one source at ZIMASCO told Business Times.

It is understood that Portnex had intentions to purchase ZIMASCO’s three furnaces at Western plant.

But, due to the acrimonious relationship that existed between the two parties, Zimasco has decided to take back control over its Western operations after the expiry of the lease agreement.

There have also been disputes over the company’s alleged failure to pay rentals to ZIMASCO.

At one time ZIMASCO accused Portnex of having failed to fulfil its obligations under a lease agreement.

Portnex, on the other hand, had felt cheated saying ZIMASCO did not disclose that the company was heading for judicial management, under Reggie Saruchera of Grant Thornton after its indebtedness to banks and creditors shot up to about US$65m in 2015 from US$38m in 2009.

Consequently, ZIMASCO stopped operations in 2015 leading to the switching off of its furnaces at the Kwekwe refinery.

Three of its furnaces were, however, leased to Portnex in a US$12m lease agreement.

In 2018, ZIMASCO however exited from receivership in 2018 after posting a US$160m in turnover and a profit of US$45m.

At one time, the plant had to be shut down after Portnex failed to settle electricity power obligations.

Portnex took the case to the courts.

ZIMASCO is a unit of China’s Sinosteel Corporation.

ZIMBABWE has started clearing project proposals for the mining industry as part efforts to ensure the sector effectively contributes to the country’s economic development.

Processing of mining proposals for claims, exploration and prospecting has been a challenge for companies in the mining sector.
The move has seen government accruing a huge backlog which requires concerted efforts for the benefit of mining entities.

Responding to inquiries about the backlog, the Deputy Minister of Mines and Mining Development, Honourable Polite Kambamura outlined efforts to clear outstanding project proposals.

“We are doing our best to ensure that there is progress as we seek to achieve the intended efforts of the ease of doing business in Zimbabwe and therefore create that basis for increased activities,” said the Deputy Minister.

Government has identified the mining industry as one of the key pillars for economic development with players in the entire value chain meeting this week to chart the way forward regarding operational efficiency.

ZBC Newsonline

THE  Chamber of Mines  has attributed the decline in gold output in 2020 and the first quarter of this year to the havoc caused by the Covid-19 pandemic among other constraints.

Giving oral evidence to the Mines and Mining Development Parliamentary Portfolio committee Monday, ZCM chief executive (CEO) Isaac Kwesu said 2020 and the first quarter of 2021 had seen a decline of 29% in gold.

“In 2020, gold accounted for 40% mineral exports whilst 25% contributed to formal mining employment. Over half a million people were also benefiting from the sector as every dollar generated created US$3,00. Gold earnings circulate more than any other form of export,” said Kwesu.

According to the ZCM CEO; “Operating in a Covid-19 environment had affected the operations in most gold mines. In 2018, gold was at its peak compared to other previous years where it realised 35 tonnes although 2019 to 2021 we have seen a decline of 29% of gold in deliveries to Fidelity Printers.”

However, portfolio committee members questioned the ZCM and the Zimbabwe Mining Development Corporation (ZMDC) officials on why the country was experiencing an increase in gold leakages following the arrests of several people smuggling gold outside Zimbabwe.

Kwesu admitted there was a worrying increase in leakages but failed to give specific responses on the rise saying the Chamber of Mines relied on government departments for information.

“Leakages may have contributed to the low output delivered to Fidelity Life Printers. We need competitive markets where producers can deliver their output,” he said.

NewZimbabwe

REVELATIONS by the Zimbabwe Anti-Corruption Commission (Zacc) that it has started investigating the black granite mining industry in Mutoko following reports that local authorities were being paid peanuts in taxes by mining companies make sad reading.

Mutoko Rural District Council claims that it is getting a paltry US$1 per tonne of black granite mined from the area.

This was revealed during a Youth Initiative for Community Development anti-corruption symposium held recently at Mutoko centre.

Zacc prevention and corporate governance acting general manager Munyaradzi Magiga said there was a need to investigate the granite mining industry to plug loopholes and ensure that communities benefit from their natural resources.

“We do have those with loads of money getting claims ahead of those who applied for the same for some time. It is disturbing to hear that the local authority (Mutoko) is getting a dollar per tonne of granite. Surely a dollar? We need to investigate and see if this is not corruption by multinational companies,” he said.

“The granite blocks are going out and we will never recover them. It is a pity that you see a school with thatched roofs near a granite mine, yet council is getting nothing.”

It is a crying shame that Mutoko is one of the poorest districts in the country despite being home to several granite mining companies.

The plight of communities that are not benefiting from natural resources in their areas has become commonplace in the country. The communities in the diamond-rich Chiadzwa are living in squalid conditions despite the availability of the precious stone.

That diamonds are being smuggled out of the area for the benefit of the politically-connected at the expense of the community is not only scandalous, but tragic.

That it took a national outcry for government to reverse the decision to boot out thousands of Chilonga villagers for a Dendairy project highlights the extent  of the neglect of most communities to the benefit of multinational
companies.

The Hwange community continues to live in poverty despite vast coal, gas, lithium, timber and wildlife resources.

That communities remain impoverished while companies get richas from their resources is a damning indictment on government.

President Emmerson Mnangagwa’s administration has spoken ad nauseum about its desire to improve the lives of the citizenry. Ensuring that communities benefit from resources in their area should be the first step towards improving the lives of local communities.

NewsDay

THE Zimbabwe Anti-Corruption Commission (Zacc) says it has started investigating the black granite mining industry in Mutoko following reports that local authorities were being paid peanuts in taxes by mining companies.

Mutoko Rural District Council claims that it is getting a paltry US$1 per tonne of black granite mined from the area.

This was revealed during a Youth Initiative for Community Development anti-corruption symposium held recently in Mutoko.

Zacc prevention and corporate governance acting general manager Munyaradzi Magiga said there was need to investigate the granite mining industry to plug loopholes and ensure that communities benefit from their natural resources.

“We do have those with loads of money getting claims ahead of those who applied for the same for some time. It is disturbing to hear that the local authority (Mutoko) is getting a dollar per tonne of granite. Surely  a dollar? We need to investigate and see if this is not corruption by multinational companies,” he said.

“The granite blocks are going out and we will never recover them. It is a pity that you see a school with thatched roofs near a granite mine, yet council is getting nothing.”

Mutoko is one of the poorest districts in the country despite being home to several granite mining companies.

The granite blocks are exported to Europe, where they are processed into expensive building materials.

“The whole issue around the black granite is confusing. In Zimbabwe, the granite is being classified as quarry, but in Europe, it is a precious mineral. Our government should look into this matter and declare it a mineral,” said a villager.

The symposium was attended by local traditional leaders and youth representatives.

NewsDay