Mining ZimbabweLatest Mining News, Policy and Industry Updates

AUSTRALIA Stock Exchange-listed oil and gas explorer, Invictus Energy yesterday requested government to expand its exploration claims in Muzarabani by 10 times, marking another phase in the firm’s hunt for its first find in Zimbabwe.

Invictus, which has already reported major milestones at the potentially lucrative project, said increasing its exploration fields would be key as it progresses with the landmark deal.

The firm is currently exploring for oil on a 100 000-hectare special grant in the Zambezi Valley.

If the request is granted, it will take its oilfields to about one million hectares.

“Zimbabwe needs to expand oil and gas exploration block,” Invictus Energy technical director Brent Barber told delegates at the Chamber of Mines of Zimbabwe annual general meeting in Harare.

“The size is not competitive with other neighbouring countries. The money is becoming harder and harder to find. The size of grants is important. We have applied for an increase of our concession for exploration. Our current space is drastically reducing the commercial component of it. At the moment we have not made any discovery,” Barber said.

In  response, Mines deputy minister Polite Kambamura said: “On the issue of more land, we need to sit down and come to common ground.”

The government also undertook to extend a tax relief as it takes bold steps to make its first find in the southern African country.

Mercy Manyuchi, the acting chief director for mining development in the ministry said Invictus would enjoy tax holidays when importing drilling equipment.

“We are currently working on putting rebates with Finance ministry for their equipment for drilling purposes,” she said.

Invictus and the government recently signed a petroleum exploration development and production agreement (PEDPA).

Under the PEDPA, Invictus was granted rights to undertake production for the next 25 years and the project was granted Special Economic Zone status.

Deliberations are already underway to finalise the petroleum production sharing Agreement (PPSA), which will spell out how the output will be shared among stakeholders.

The firm will drill its first test well in the final quarter of 2021 and has recently worked towards establishing the exact location for sinking the shaft.

In March, the outfit raised about US$6 million for the project.

Invictus intends to conduct, process and interpret a minimum of 400 line kilometres of 2D seismic in order to refine the Muzarabani-1 drilling location and well path.

The southern Africa-focused Australian firm, which has been exploring for oil/gas on swathes of the Zambezi Basin forests since 2015, has said it could be sitting on Africa’s largest find.

NewsDay

THE spike in gold smuggling cases in Zimbabwe is worrisome. Gold smuggling has compounded the country’s economic woes, frustrating government efforts to leverage on its abundant mineral resources.

The country is said to be losing an average of US$1,5 billion in potential revenue each year through gold smuggling. The amount is way above the US$800 million official Fidelity Printers and Refiners (FPR) export earnings per annum. Smuggling is also likely to stifle the attainment of the targeted US$12 billion mining sector revenue by 2023.

The country’s porous borders have contributed to smuggling of gold. Massive gold leakages are claimed to be facilitated by a well-connected syndicate taking advantage of inconsistent gold policies and unattractive prices in the country.

Security forces have, on many occasions, been fingered as accomplices in gold smuggling syndicates.

Former ZMF aide Tashinga Masinire was recently arrested at Oliver Tambo Airport in South Africa with 23 pieces of gold he had smuggled from Zimbabwe. According to Home Affairs minister Kazembe Kazembe, the gold smuggling syndicate was interwoven with security operatives at the airport.

He said: “We are going to leave no stone unturned in finding out what happened. We want to know how this man (Masinire) left the country with all that gold. So far we have established that when he walked in at the RGM International Airport he didn’t have a bag, now we want to establish who gave him that bag, where, and how. Investigations are ongoing, as I said, I am confident we will unearth what transpired on the day as soon as possible, working with our Interpol colleagues”.

It is high time Kazembe goes beyond rhetoric and plug the loopholes if the government is really committed to achieving a US$12 billion mining economy.

Government must promulgate consistent gold policies that address issues around possession, dealing and marketing of precious minerals.

The country lacks a defined gold policy, as there is a contradiction between the Gold Trade Act and the situation on the ground. Section 3(1) of the Gold Act states: “No person shall, either as principal or agent, deal in or possess gold, unless; he is the holder of a licence or permit, or a holder or tributor or holder of an authority, grant or permit issued under the Mines and Minerals Act or an employee or agent of any of the persons mentioned above and is authorized by his employer or principal to deal in or possess gold in the lawful possession of such employer or principal.” While the Gold Trade Act prohibits possession and trading of gold without a licence, FPR is employing a no-questions-asked process to promote artisanal and small-scale miners. The artisanal and small-scale miners used to be a major gold contributor to FPR but have now become big smugglers.

The ambiguity of the no-questions-asked policy adopted by FPR promotes smuggling of the yellow metal.

A consistent gold policy will go a long way in curbing smuggling of the precious mineral, for they say a stitch in time saves nine.

NewsDay

MINES and Mining Development Minister, Winston Chitando, says the target of producing 100 tonnes of gold is achievable but producers need improved access to alternative sources of financing such as loans.

As the Government drives towards the US$12 billion mining industry by 2023 gold production, alongside platinum group metals, hydrocarbons like oil and gas, coal, gold, lithium, chrome and ferrochrome, must be the major contributors.

The target will be made possible by optimum investment and output levels in all mineral commodities. The gold sector, drawing from both small and large-scale producers, targets to produce 100 tonnes of gold from about 30 tonnes.

The mining industry is expected to contribute significantly to the country’s vision of Zimbabwe becoming an upper-middle-income economy by the year 2030 with gold playing a significant role.

Speaking at the Chamber of Mines Annual General Meeting and Conference, Minister Chitando said the ravaging effects of Covid-19, which caused a fall in mineral prices as well as death of key personnel in the sector, should not dampen spirits in mining but motivate players to overcome challenges while also keeping focused to achieve the set targets.

“It is worth noting that despite these challenges, the Zimbabwe mining sector has remained resilient as we work towards attaining our milestone of a US$12 billion mining industry by the year 2023.

“The sector continues to play a significant role in the country’s economic development, contributing 60 percent of export receipts in 2020,” said the minister.

“Government’s thrust to increase gold production from the current levels of about 20,87 tonnes in 2020 to about 100 tonnes by 2023, contributing US$4 billion to the US$12 billion is an achievable milestone. In order to achieve this target, Government is mainly looking at enhanced exploration and development of medium to large-scale mines as well as capacitation of small-scale miners,” said Minister Chitando.

He said the Government would seek to intensify its monitoring and surveillance exercises to curb illicit trade in gold and ensure gold is delivered to Fidelity Printers and Refiners.

The minister said there were a number of gold projects coming up, which will further increase production.

These include Shamva Gold Mine, which was commissioned last year and Eureka Gold Mine, which is set to resume operations next month, as well as the Caledonia Mine installation of a new US$60 million shaft in Gwanda.

The minister said the Government was also working with various private players to capacitate small-scale miners through the introduction of private-led gold service centres as well as command mining, using the same model as in agriculture.

“There are three specific issues that have come out here (conference) and we will pick them up in our normal interface. There is a need to ensure that we surpass 100 tonnes target and utilisation of gold loans through the intervention of coming up with structures where gold producers will be allowed to have structures in which they access gold loans. There is need for us as Chamber and Government to come up with a menu of alternative finance options,” said Minister Chitando.

He said there will be engagements among stakeholders within the purview of the Chamber of Mines to that effect.
The theme for the conference, which effectively ended yesterday was: “Navigating turbulent times — Sustaining growth of the mining industry beyond Covid-19.”

Minister Chitando said the conference came at an appropriate time as the Government was working hard to implement the National Development Strategy 1 (NDS1:2021-2025), a key building block towards Vision 2030.

He said policies by the Second Republic have seen an increased investor appetite in the mining sector.

The Chronicle

HYDROCARBONS and platinum were among the top discussion points at the Chamber of Mines’ three-day annual indaba that ends in Victoria Falls today.

Officially opened by President Mnangagwa yesterday, the conference is being held under the theme: “Navigating turbulent times — Sustaining growth of the mining industry beyond Covid-19.”

Mining investors and executives discussed a number of issues on the local mining industry with the country’s hydrocarbon potential and platinum leading. There were two symposia, one focusing on oil and gas while the other was on platinum.

Gold is an old mineral, whose potential remains enormous, just like chrome, lithium, coal, diamond as well as platinum.

However, we, as the Minister of Mines and Mining Development Winston Chitando said on Thursday, have a soft spot for oil and gas, an emerging mining sub-sector in the country and one which has stupendous potential.

There is hydrocarbon potential in Lupane and Chiredzi but progress towards exploration of a highly prospective target in Muzarabani has got us dreaming.

We have seen how oil and gas have performed socio-economic miracles in Qatar, United Arab Emirates (UAE), Brunei, Saudi Arabia and Kuwait among other countries. The countries are among the world’s richest and most well-developed. Standards of living of their people are out of this world. Everything is perfect through and through. All this has been possible because of the countries’ oil and gas endowments.

In Africa, Algeria and Egypt are heading up there; Angola is moving up as is Nigeria. Mozambique is on the cusp following impressive offshore discoveries north of that country.

The advances that are being made by Invictus Energy and its local partner, One Gas Resources at their oil and gas acreage in Muzarabani are making us dream that with judicious management of revenue from the hydrocarbons, Zimbabwe could develop as fast as Qatar, UAE, Kuwait and other oil producing nations have done in recent years.

Minister Chitando said his ministry has an inclination towards oil and gas.

He said: “This is an opportunity to critically explore the potential that exists in Zimbabwe’s oil and gas mining industry, to share experiences in developing a world-class oil and gas mining industry leveraging on the gains from our economic reforms, engagement and re-engagement with the international community.

The oil and gas sector is one among other resources that have the potential to contribute towards the speedy attainment of our national vision to become an upper-middle-income economy by 2030. Given the strategic importance of oil and gas in Zimbabwe, my ministry is strategically monitoring and evaluating the progress made in terms of exploration of the occurrence of this strategic mineral in Muzarabani.”

Geo Associates, the partnership between Invictus Energy, registered in Australia, and One Gas Resources, a locally-owned company, must be commended for the work they are doing that could lead to exploratory drilling at Muzarabani in the next few months.

That, we are optimistic, should lead to a commercial discovery, paving the way for the mobilisation of resources for development and extraction of the gas and oil from that target.

But for greater value to be unlocked from the oil and gas, we want the Government and Geo Associates to work out a programme for value addition. Qatar, UAE, Kuwait and Saudi Arabia are so rich because they are exporting refined oil, which pays big, not crude which is cheaper. They are also processing their gas to produce electricity and other products.

So as soon as a commercial discovery is made at Muzarabani, development is done, it must not take a long time for the investors, working with the Government, for more value to be added to the oil and gas.

The people who are paying so much for petrol and diesel will look forward to both fuels being cheaper as they would be made from locally-mined oil. They, too, would be happy that some of the gas to be used for electricity generation so that the national reliance on hydro and coal generation is reduced. That would ensure more energy security and possibly lead to lower electricity prices.

A full-fledged oil and gas industry also means more jobs and greater national development.

The Chronicle

The Chronicle

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