Mining ZimbabweLatest Mining News, Policy and Industry Updates

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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NEC for Mining Industry April to June 2021.

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Zimbabwe’s nickel and chrome ore production during January-March 2021 fell from a year earlier following Covid-19-related output disruptions.

Output for both products fell following production cuts during renewed lockdowns from early January to mid-February, according to data from the country’s finance and economic development ministry. Neighbouring South Africa also closed its border for one month until mid-February to combat the spread of Covid-19.

Nearly three-quarter of Zimbabwe’s chrome ore production was used in the alloy processing industry in the first quarter because of higher profits, with the rest exported directly.

China imported 141,184t of chrome ore from Zimbabwe during January-March, up by 36.4pc from a year earlier, while its shipments of high-carbon alloy rose by 9.6pc to 27,632t. Deliveries of nickel ore climbed by 30.8pc to 12,079t.

Zimbabwe’s mining industry accounted for 80pc of its total exports in the first quarter.

Nickel in Zimbabwe

In Zimbabwe nickel occurs within the Archean craton in rocks of komatiitic composition a good example is at Trojan mine.

Nickel also appears layered/unlayered mafic-ultramafic intrusive bodies e.g. Empress, Madziwa Great dyke. It’s also found in nickel laterite e.g. northern part of the Great Dyke hydrothermal shear zone deposits. There are nickel deposits in several serpentinite areas in greenstone belts with igneous complexes around the country. The country has got huge potential in komatiite and laterite and more than 30 nickel deposits are known. Currently, production is at Trojan mine in Bindura.