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The Zimbabwe Miners Federation (ZMF) President Ms. Henrietta Rushwaya has said foreign investors must leave small-scale mining for the locals and there must be a law that categorises a small-scale miner by possessing 50 or fewer hectares of land.

Shantel T Chisango

Speaking at a peggers meeting held at ZMF headquarters in Msasa, Rushwaya stated that small-scale mining must be categorised by having 50 hectares and below, therefore investors must not be seen going into disputes with locals over land that is 50 hectares and below.

“We would appreciate it if the government sets a law that recognises a small scale miner by possessing 50 hectares or less because we have had challenges of people coming from outside ( foreign investors) but lots of disputes over land that is 50 hectares or less have been recorded,” said Rushwaya.

She added that there is a need to make small-scale mining a preserve for local indigenous Zimbabweans so that we minimise the level of disputes among locals.

During the meeting, Rushwaya said the small-scale miner is not in the Mines and Mineral Act, when the law was implemented it did not involve small-scale miner, so whatever Rural District Councils (RDC) and the Mines Ministry propose or say, it will be addressing mining in general.

She, therefore, proposed that the constitution must be amended with regard to the small-scale miner and that the law must include a small-scale miner in the Constitution which will make it easier to address the challenges being faced by small-scale miners.
She stated that when small-scale miners come with challenges to the government they are not quickly addressed because they are not in the constitute, hence the need to include them in the Mines and Mineral Act.

The meeting was attended by the president of Zimbabwe Prospectors Association (ZPA) Mr. Frank Chatyoka and his executive board members, and peggers from Mashonaland West, Mashonaland East, and also from Harare.

Zimbabwe’s multi-billion-dollar mining sector has been granted the nod to pay part of their royalties, taxes and rural district council levies in local currency in a major boost for the capital intensive sector.

The sector contributes over 60% of the country’s export receipts which is used to oil the economy through the importation of raw materials for production and drugs.

Large scale miners retain 60% of their export proceeds which are treated as free funds and cannot be liquidated with the balance being paid in local currency at the prevailing auction rate.

Local miners, especially large scale miners, who were grappling with tax issues and levies which were too high, said some local authority boards are accepting payment even in local currency.

Royalties are the major tax payment in the mining sector thereby contributing the most significant contribution to revenue going to the state.

Chamber of Mines of Zimbabwe CEO Isaac Kwesu told Business Times that the government has come up with a foreign exchange retention framework that aligns with the statutory obligations.

“Royalty and taxes are now paid in obtaining foreign exchange framework of 60/40, a move which is commendable for miners. Meanwhile, Rural District Councils [RDCs] and Environmental Management Agency [EMA] is now accepting payment in local currency from that last time where they only wanted forex,” Kwesu said, adding that engagements with authorities are ongoing to improve the situation.

“However,  the current position of the RBZ on the issue as announced in the latest Monetary Policy Statement is that in the meantime exporters who have shortfalls in their forex requirements will  be allowed to participate at the auction market,” Kwesu said.

Large miners want the monetary authorities to raise forex retention levels to above 70%.

Kwesu said production levels across the industry would improve if authorities raise the retention levels.

This year, the government lowered  the forex retention threshold to 60% from 70% implemented in July last year to help the importation of critical raw materials.

Fidelity Printers and Refiners general manager Fradreck Kunaka recently told this publication that taxes and levies are affecting the mining sector.

“Royalties are a hindrance to the mining sector as they cause miners to look for other alternative markets which do not charge these levies,” Kunaka said.

He said the authorities have improved on payments as they are now doing spot payments in some instances and others who bring the yellow metal will be paid within one working week.

President Emmerson Mnangagwa’s administration is targeting US$12bn export receipts for the mining sector by 2023 anchored on, among others, effectively pursuing value addition and beneficiation of local minerals such as lithium, nickel, graphite, gold, platinum and chrome.

Gold is expected to lead the charge with US$4bn.

Business Times

New York Stock Exchange listed resources firm, Caledonia Mining Corporation, is targeting more gold claims in Zimbabwe as the resources firm expands its footprint on the local market.

The development comes after Caledonia, which operates Blanket Gold Mine in Gwanda, Matabeleland South Province, secured exclusive rights to explore and acquire the mining claims in the gold rich Connemara North area in the Gweru district as well as Glen Hume claims in the same area.

The Gweru claims cover approximately 350 hectares and are believed to have huge gold deposits.

“(We will also) evaluate further investment opportunities in the gold and precious metals sector in Zimbabwe and in other jurisdictions, with our long-term vision of becoming a mid-tier, multi-asset gold producer,” Steve Curtis, the group chief executive officer of Caledonia, said.

Caledonia has been aggressive looking to expand its mining portfolio. At one time, Caledonia was targeting to acquire some gold assets owned by the Zimbabwe Mining Development Corporation.

Blanket Mine has completed its Central Shaft project, which is expected to increase production, reduce operating costs and increase the flexibility to undertake further exploration and development.

The miner spent about US$67m to complete the project. This was funded through internal cash flow.

Commissioning of the shaft project, which is expected to potentially secure Blanket Mine’s operating future for the next 20 years, is expected before the end of June.

Once Central Shaft is commissioned, the miner expects to increase production to between 61 000 and 67 000 ounces this year. It expects to ramp up production to 80 000 ounces next year.

Caledonia is also planning to construct a 12megawatt solar plant at Blanket Mine.

To fund the project the company issued approximately 600,000 shares to raise $13m before expenses.

The miner expects the new solar plant to provide about 27% of daily electricity to Blanket.

Business Times

Zimbabwe’s gold export receipts have spiked 15% to US$147.3m in February and March this year from US$128m recorded during the comparative period last year on the back of firming international gold prices, latest data has shown.

The importation of United States dollars and raw materials have been much easier this year compared to same period last year when the pandemic was still new and at its peak, given that most countries across the world have relaxed Covid-19 restrictions.

Between February and March last year, world gold prices were above US$55,000 per kilogramme against this year’s prices of above US$60,000 per kg.

In written responses, Reserve Bank of Zimbabwe governor John Mangudya told Business Times that the central bank expects gold exports to continue improving on the back of the end to the rainy season which made mining difficult.

“The country made total gold shipments of US$147.3m between February and March 2021 from US$128m during the same period last year. In February last year the country shipped out gold worth US$56.1m compared to gold worth US$66.1m while in March last year gold export receipts were at US$71.9m against US$81.2m recorded last month,” Mangudya said.

“The increase in gold export shipments is due to improvement in gold deliveries to Fidelity Printers and Refiners as a result of slowing down of rains. The firming of world gold prices could be another reason for the increase.”

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.

Despite, good gold performances in February and March, gold export receipts for the first quarter of 2021 were US$200.4m against  gold shipments of US$226.1m 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.

Zimbabwe is losing between US$1.2bn and US$1.7bn yearly due to smuggling and unfriendly policies such as  high taxes, costs and low retention levels which do not allow miners to produce at a competitive level.

According to the figures obtained from the FPR, from the total of 1.80 tonnes, primary producers hauled 1.13 tonnes which is their highest recorded total while small scale miners recorded 0.67 tonnes in the process.

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 are getting 60%.

From the output of 0.997 tonnes in January 2021, primary producers delivered 0.64 tonnes against small scale who managed 0.355 tonnes.In February 2021, the small scale miners extracted 0.56 tonnes and primary producers delivered 0.61 tonnes.

In the first quarter of 2021, total gold deliveries fell 31% to 3.977 tonnes from the 5.72 tonnes achieved in the same period last year.

From the 3.97 tonnes, small scale delivered 1.58 tonnes while primary producers managed to deliver 2.39 tonnes.

Recently, FPR 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.

He 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 said the quarterly figures would have been two months’ production if fundamentals were addressed.

“Authorities may be happy that there is an improvement but in actual fact if there was full liberalisation of the sector, good forex retention thresholds and competitive prices we could be making over US$100m monthly,” 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 President Emmerson Mnangagwa’s 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 Midlands and Mazowe. The report said the development of the gold sector is crucial if Mnangagwa’s government is to salvage prospects for Zimbabwe’s economic recovery from decades of economic stagnation.

Mining experts warned that the monetary authorities should address fundamentals to reach the 100 tonnes target by 2023.

Business Times

CALEDONIA Mining Corporation says its local gold mining operation, Blanket Mine, “slightly” missed the first quarter production target but remains on track to achieve the 2021 projection of between 61 000 and 67 000oz.

In a trading update for the quarter ended 31 March 2021, Caledonia said traditionally its first quarter gold output tends to be lower but increases in subsequent quarters.

“A total of 13 197oz of gold were produced during the quarter. Caledonia remains on track to hit its production guidance of between 61 000 to 67 000oz for the full year,” it said.

Caledonia chief executive officer, Mr Steve Curtis, said production in the first quarter of 2021 was slightly below target and below the comparable quarter in 2020 although at a level that allows the business to maintain its 2021 production guidance.

“Gold production has often been lower in the first quarter of each year and increases in the following quarters,” he said.
Mr Curtis said the rain season saw unprecedented flooding at the mine, which resulted in several lost shifts during the period.

“These temporary issues have now been rectified and with the Central Shaft now operational, we remain on track to hit our target,” he said.

Meanwhile, Caledonia has announced the increase of its quarterly dividend by nine percent to US$0,12 on each of the company’s shares, which would be paid this month-end.

In January this year, the New York Stock Exchange-listed company paid a previous quarterly dividend of US$0,11.

Caledonia recently announced that it had obtained exclusive rights to explore new gold mining claims in the Connemara North area near Gweru in the Midlands province.

Connemara North is in close proximity to the Glen Hume property, which is also under Caledonia focus consideration. The option was giving Caledonia the right to explore the area for a period of up to 18 months.

The firm hopes to derive favourable outcomes from this effort, which will impact positively on its overall business.

Last year, Caledonia’s total annual haul hit close to 58 000oz. The record haul comes at a time when the Government is pushing for a mining production ramp-up to reach its annual target of US$12 billion total minerals earning by 2023 up from US$2,7 billion in 2017.

The Chronicle

Gold deliveries declined to 3,97 tonnes during the first three months of 2021 from  5,72 tonnes during the comparable period last year after heavy rains swamped shafts and kept artisanal miners from work for prolonged periods.

Following years of protracted droughts, Zimbabwe has just had a good rainfall which has resulted in a bumper crop harvest.

Artisanal miners, estimated at about 1,5 million in Zimbabwe, have been producing over half of the country’s annual gold output after a two-decade economic crisis triggered the closure of most big operators.

Big miners have been slowly reclaiming their position over the past two years, but slight disturbances to the operations of artisanal miners still result in falling national output.

Formal miners have faced several operational challenges including late payment for gold delivered to Fidelity Printers and Refiners (FPR).

Foreign currency retention thresholds imposed by the central bank have also affected mining operations.

Figures from FPR showed that large-scale miners, also referred to as primary producers, delivered 2,99 tonnes with small-scale miners coming in with 1,58 tonnes during the period.

FPR’s report came as Caledonia Mining Corporation announced on Monday that output at its flagship Blanket Mine was slightly subdued at 13 197 ounces during the period due to heavy rainfall and lost shifts.

Caledomia said it was on track to achieve a production guidance of between 61 000 and 67 000 ounces for the full year, before scaling up output to 80 000 ounces by 2022.

“Production in the first quarter of 2021 was slightly below our target and below the comparable quarter in 2020 albeit at a level which allows us to maintain our 2021 production guidance of 61 000 to 67 000 ounces for the full year,” Caledonia chief executive officer Steve Curtis said.

Economist Tafadzwa Chisango agreed with Caledonia, saying heavy rains had hampered operations.

“Given that most of the gold is produced by small-scale miners it was inevitable that there was going to be a decline  in this year’s first quarter output, largely necessitated by heavy rains the country received in the quarter in question,” Chisango said.

“This, to a greater extent affected mining activities for artisanal and other small-scale gold mining operations as most do not have high end drainage machines to drain water from shafts.

“But addressing issues such as payments and continued extension of  gold support schemes like the one that was unveiled by the central bank recently remain key in bolstering output in the remaining quarters,” Chisango said.

He projected that gold output would increase in the remaining quarters.

Another analyst, Victor Bhoroma said: “Delays in payments are yet to be solved.

“This leads to high levels of smuggling to markets such as South Africa and the United Arab Emirates.

“Gold worth at least US$100 million per month is leaving the country through illegal channels.

“I foresee gold production falling below 15 tonnes in 2021 if the exchange rate and payment delay issues are not addressed”.

Newsday

The Chairman of the Portfolio Committee on Mines and Mining Development, Hon. Edmond Mkaratigwa has encouraged communities and investors to use legal channels to resolve conflicts or disputes whenever they feel their rights are being violated.

By Shantel Chisango

Commenting on the conflict between local miners at Dinde Community in Hwange and a Chinese company, Beifer Investments, Mkaratigwa said foreign investors must work with locals, be responsible and legal in approach while the community does the same in return.

“Communities have values and have to be upheld and in all instances. Investors need to be responsible and legal in approach while the community should also act legally and responsibly.” Mkaratigwa said.

The Honourable member of Parliament encouraged local miners to approach the Mines Committee through petitions whenever they feel that their rights are being violated by mining investors.

Mkaratigwa said that the increase in cases whereby foreigners and locals go head to head is the reason why the committee is hastening for the finalisation of the Mines and Minerals Amendment Bill.

“It is among these challenges that the Committee is itching for the finalisation of the Mines and Minerals Amendment Bill,” said Mkaratigwa.

Adding on, Mkaratigwa said land resources are important for the development of the country as peace is the key to any national development.

Dinde community members are locked in a stand-off with a Chinese investor over the latter’s proposed coal exploration operations within their community, with villagers fighting to stop the operations. Villagers argue that the Chinese investors are in breach of environmental and customary laws of the country as they have not produced any documents granting them permission to work in the area nor engaged the community for a social license.

Villagers expressed their fear that, should the project continue, they will be subjected to forced relocations while others will be exposed to air and water pollution of Nyantuwe River which provides drinking water for humans and livestock. Villagers also fear the loss of livelihoods and grazing land for their livestock, destruction of cultural heritage sites such as graveyards for the Nekatambe Chieftainship as well as contamination of ritual sites in that area.

According to Dinde Residents Association, from February 2019 to December 2019, a team of Chinese nationals toured the village without consulting or engaging locals. In December 2019, the same team brought some lightweight machinery and set up a camp behind one Emelia Mukombwe’s homestead within the village – where they intended to start drilling. Locals approached the Chinese, who failed to produce documents authorising them to explore the area. The Chinese intended to drill 13 holes in a straight line of a 1, 9-kilometre stretch without due care of what was in that path.

In a show of resistance, locals ordered them to leave and return with documents granting them permission to work in Dinde. Thereafter, the Chinese investors returned to Dinde with several officers from the Environmental Management Agency, Hwange Rural District Council, Traditional Leadership, Zimbabwe Republic Police, Zimbabwe National Army and a local miner, to coerce the villagers.

Dinde is home to thousands of Nambyas and Tongas with a preponderance of the Tonga who first settled in Whange district up to Victoria Falls right upstream of the Zambezi River between 300 AD and 400 AD. The Nambyas tracked in from Masvingo in the early 19th century. According to a local traditional leader’s narration, most people who settled in Dinde area were relocated from Sinamatela area in 1920 to pave way for a game reserve (Hwange National Park). The area has had five Chiefs since its establishment in 1920 and four of the chiefs who have passed on are buried near the site where the Chinese want to mine.

Additional information extracted from the CNRG website

Zimbabwe Diamond and Allied Mineral Workers Union (Zdamwu) Secretary-General Justice Chinhema has called for the government to enact laws that protect and benefit local miners at large.

By Shantel Chisango

Speaking on the trending issue of local miners being cheated or illtreated by investors, Mr. Chinhema said there is a need to reflect on the importance of local miners and the government must protect its local mining citizens by ensuring that there are laws that place immunity on local miners while benefiting all.

“There is a need to reflect on the critical role of mineworkers in the country, and we expect the government to now put policies that protect and benefit mine workers.

“We want policies that protect communities that are being mined. We want a safe working environment and investors who respect and observe the laws of this country,” said Chinhema.

Chinhema stated that the existence of gross unfair labour practises especially on wages and salaries while corruption and leakages rise at their peak is destroying the mining sector.

Furthermore, he said 2021 is a year that mineworkers declare their independence from poverty and poor presentation, hence the promise to stand for local miners and their rights.

“Workers through their vibrant union are challenging the criminal elements in the name of administrators to get what they worked for,” stated Chinhema.

Mr. Chinhema assured all mineworkers that Zdamwu is going to stand with miners in a bid to promote their rights and protect them from predatory investors and sabotaging policies.

Zdamwu is an organization that helps in addressing challenges being faced by retired and current workers in the Zimbabwe mining sector.

For several years, it has been known that Zimbabwe hosts some uranium deposits in Kanyemba area (Mbire District) near the border with Zambia and Mozambique along Zambezi River Valley. 

But no major works have been done to confirm the quantities of uranium and whether they are large enough to support a viable mine.

However, the uranium project meant to provide alternative electricity to the country has always been on the Government’s agenda. In the 1990s, the late President Robert Mugabe is reported to have mentioned Zimbabwe’s intention to acquire a nuclear reactor from Argentina while in 2005, he said the discovery of uranium will go a long way in further enhancing the government’s rural electrification programme. 

This week, Cabinet approved the framework for cooperation with the Russian Federation State Atomic Energy Corporation, which among other issues seeks to develop technical expertise required tap into nuclear energy.  

Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa, told a post-Cabinet briefing the memorandum seeks to facilitate higher-level cooperation between the two countries in the use of nuclear energy. 

“The anticipated cooperation in the use of nuclear energy for peaceful purposes will provide alternative sources of energy which Zimbabwe needs,” Mutsvangwa said.

Zimbabwe, like many other African countries is exploring various alternatives cleaner energy sources like wind, solar and methane gas as it seeks to boost power supplies and reduce carbon emissions from fossil fuel-based power production. 

Currently, South Africa is the only country in Africa with a commercial nuclear power plant. But according to the International Atomic Energy Agency (IAEA), a third of the almost 30 countries around the world considering adopting nuclear power are in Africa. Ghana, Kenya, Egypt, Morocco, Niger, Nigeria and Sudan have engaged with the IAEA to assess their readiness to embark on a nuclear programme, and Algeria, Tunisia, Uganda and Zambia are mulling the possibility, according to the agency. 

In southern Africa, the push to consider nuclear power is being driven in part by drying of hydroelectric dams as a result of climate change, Reuters reported in April last year. Those dams – particularly Lake Kariba — provide a majority of the electricity to many southern Africa nations, from Zimbabwe to Zambia. Experts say it is time Zimbabwe should conduct a feasibility study to ascertain if the nuclear deposits warrant establishment of a viable mine. 

“We have known of uranium deposits but what is not known is if Zimbabwe has enough stocks to support a viable mine,” said one mining executive who worked for two state-owned mining firms. “I think it is an area which this partnership should work on; coming up with a feasibility study with investors can bank on.” 

Energy and Power Development Minister Zhemu Soda said the “MoU marks the beginning of the journey” of taping into nuclear energy. 

“We want to learn from how Russia achieved,” said Soda. “This will help Zimbabwe to fully engage in nuclear energy.”

Business Weekly