Mining ZimbabweLatest Mining News, Policy and Industry Updates

Blanket Mine’s parent company, Caledonia Mining Corporation Plc, has shelved its GlenHume property project due to “disappointing exploration results.”

On December 11 and 17, 2020, Caledonia announced it had acquired an option over the Glen
Hume property and Connemara North respectively.

While exploration at Connemara North will continue, the mining concern will no longer continue with Glen Hume as it does not meet the company’s strategic requirements in terms of size, grade and width, but will consider further investment opportunities in Zimbabwe.

Caledonia chief executive officer Steve Curtis said this had a knock on effect on the company’s net profit.

“Net profit was adversely affected by the impairment of the Glen Hume exploration asset following the board’s decision not to proceed further with this project because the property does not meet Caledonia’s strategic requirements in terms of size, grade and width,” he said commenting on performance for the second quarter to June 30, 3021.

During the quarter gross revenues rose 31 percent to US$30 million from US$22.9 million achieved in the second quarter of 2020. Gross profit was US$13,9 million, a 51 per cent increase on the $9,2 million in Q2 2020. Earnings before interest, tax, depreciation and amortisation (EBITDA) — excluding asset impairments, net foreign exchange gains and losses and export incentives — doubled to US$14,0 million. On-mine cost of $715 per ounce was achieved from US$811 per ounce in the prior year comparable quarter. According to the group, all-in sustaining cost (“AISC”)1 excluding export incentives of US$933 per ounce was recorded, a decline from the US$1,075 per ounce achieved in the comparable period.

Adjusted earnings per share (EPS) came in at US62,6 cents from US36,8 cents. Net cash from operating activities surged 216 percent to US$12,7 million while net cash and cash equivalents rose 43 percent to US$16,7 million.

In terms of production, 16,710 ounces of gold was produced in the quarter, which was 24 per cent higher than the 13,499 ounces produced in the same period in 2020 and a new production record for a second quarter.

For the six months to June 30, 2021, Blanket Mine produced 29,907 ounces which was 8 percent higher than the 27,732 ounces produced in the first half of 2020.

Over 165,000 tonnes of ore were mined and milled in the quarter, which is a new production record for any quarter and reflects the contribution of the Central Shaft, which was commissioned at the end of March 2021 and the build-up towards the target of 80,000
ounces per annum from 2022 onwards.

In July, production was 5,995 ounces, which is a further increase in average monthly production and demonstrates that Blanket is on-track to achieve its production guidance of 61,000 — 67,000 ounces for 2021.

“This has been a strong Quarter and these results have left us well placed to achieve our guidance of between 61,000 — 67,000 ounces for the year.

‘‘Our immediate strategic focus continues to be to increase production to 80,000 ounces in 2022, while undertaking further exploration and development with the objective of extending the life of mine beyond 2034 thereby safeguarding and enhancing Blanket’s longterm future. Caledonia will also evaluate further investment opportunities in Zimbabwe and elsewhere.

“Excellent production was achieved without compromising on safety. During the quarter Blanket passed the milestone of achieving two million fatality-free shifts,” said Curtis.

Meanwhile, its solar project, which is expected to provide approximately 27 per cent of Blanket’s average daily electricity usage is now in the procurement phase and project completion is expected in April 2022.

Business Weekly

Zimbabwe will conduct a full feasibility study first before executing a US$1.3 billion second oil pipeline partnership project with United Kingdom firm, Coven Energy Limited, linking Mozambique’s Beira Port and Harare, according to a senior Government official.
Secretary for Energy and Power Development Dr Gloria Magombo, said in an interview on Thursday that following the agreement with Coven, a full study would be conducted to determine viability of a plan to make Zimbabwe a regional fuel hub.

However, this comes at a time the world was moving to phase out fossil fuel powered automobiles in favour of EVs, with other vehicles manufacturing giants and governments already having set deadlines as early as 2025 to phase out production of combustion engines.

But, given that in the first of H1 2021, a total of 55 oil and gas discoveries were made globally with conventional oil and gas resources dominating the discoveries landscape, and there is probably huge scope for Zimbabwe to venture into such a massive project.

Among regions, South America and Asia were the top regions globally, each with 10 oil and gas discoveries in H1 2021. Among countries, Norway led globally in terms of count of discoveries in H1 2021 with nine according to statics.

As such, Dr Magombo said Zimbabwe already had adequate capacity for domestic fuel supply, and so the second pipeline linking Beira Port and Harare was targeted at regional markets in the north and some parts in the south.

The full bankable feasibility study, Dr Magombo said, would look at number of areas, including future demand for fuel and developments in technology, more specifically expected impact of a global transition to electric vehicles.

Earlier on Wednesday, Informational, Publicity and Broadcasting Services Minister Monica Mutsvangwa, told a post-Cabinet briefing that the State-owned National Oil Company of Zimbabwe had partnered the UK private firm, Coven, for the oil pipeline project.

Mutsvangwa also stressed the project would make Zimbabwe a regional hub for refined petroleum supplies to landlocked SADC countries, while Dr Magombo indicated that northern parts of South Africa would also be in focus.

“The project will result in the National Oil Company of Zimbabwe (Pvt) Limited and Coven Energy entering a 50-50 public private partnership,” she said, adding the project will create new jobs, reduce traffic congestion and generate forex for Zimbabwe.

On its website Coven Energy defines itself as a company that comprises a group of experienced engineers who focus on creative solutions for oil and gas infrastructure projects.

The company says it has previously undertaken projects in South Africa, various parts of West Africa, Indonesia, Abu Dhabi, Kuwait, Saud Arabia, Mexico and Italy among others.

Mutsvangwa said the oil pipeline from the Mozambican port city to the capital Harare will be built over four years, at an estimated cost of US$1.3 billion. The partnership will be for a period of 30 years.

Many industry observers believe the world may have already passed the tipping point where sales of electric vehicles (EVs) could very rapidly overwhelm petrol and diesel cars.

Jaguar plans to sell only electric cars from 2025, Volvo from 2030 and last week the British sports car company Lotus said it would follow suit, selling only electric models from 2028.

General Motors says it will make only electric vehicles by 2035, Ford says all vehicles sold in Europe will be electric by 2030 and VW says 70 percent of its sales will be electric by 2030.

More chilling is the fact that many governments around the world are setting targets to ban the sale of petrol and diesel vehicles in order to give even more impetus to the process of transitioning to EVs.

Dr Magombo said “there will be a full feasibility, which will look at the market, especially the regional market, because at national level we have adequate capacity”.

Business Weekly

The Zimbabwe Republic Police (ZRP) has confirmed an accident that occurred at High Standard Mine in Gwanda where a worker slipped from a pulley and fell into a shaft and later died.

Anerudo Mapuranga

The Police through their Official Twitter handle said the victim sustained serious head injuries and was carried to Gwanda Provincial Hospital he succumbed.

“Police in Gwanda recorded a mine accident which occurred at High Standard Mine, Gwanda. A mine worker slipped from a pulley and fell into a shaft.

“The victim sustained serious head injuries and was ferried to Gwanda Provincial Hospital where he later died.  Investigations are underway,” the Police said.

Zimbabwe plans to build a second US$1.3 billion oil pipeline to supply fuel into the country and the region, a deal that would end years of lobbying and rivalry between powerful oil interests.

The project would be under a 50-50 joint venture between state-owned National Oil Infrastructure Company (NOIC) and Coven Energy, Information Minister Monica Mutsvangwa said after Cabinet met on Wednesday.

Coven is registered in South Africa and the UK. Its directors, under an interest known as Mine Oil and Gas Services (MOGS) backed by the Royal Bafokeng investment group of South Africa, have campaigned for a stake in Zimbabwe’s oil sector since as early as 2012, in the face of reported opposition from inside government and the industry.

“The joint venture between NOIC and Coven is for purposes of developing and operating a second pipeline from Beira to Harare. The objective is to establish Zimbabwe as the hub for the transportation of refined petroleum products to the SADC region, namely Zimbabwe, Botswana and South Africa,” Mutsvangwa said.

First, NOIC and Coven will have to sign an MoU to conduct a feasibility study, which would inform government on whether to go through with the plan. If agreed, the new pipeline would be built over four years and the two sides would operate the line for 30 years.

A new pipeline would be the first such infrastructure since 1966, when the Feruka pipeline was built. It would also conclude a long controversy within government over whether the country needs a second pipeline.

Zimbabwe imports 90% of its fuel needs via Feruka, but oil industry firms have complained about the cost of using the pipeline. The test of the new pipeline will therefore be on whether it can deliver an economic service to importers.

Feruka: A slippery battle

While the Feruka pipeline is owned by government, through Petrozim, it was for a period operated by Trafigura. This was after 2014, when the commodities broker funded refurbishment of the pipeline. Penspen, the international engineering company that originally designed the pipeline, is currently refurbishing it after being awarded a new contract in March this year.

Various press reports over recent times have claimed that Trafigura, once tied to businessman Kuda Tagwirei, was opposed to a second pipeline, as it would break its monopoly over oil supply into Zimbabwe.

In 2012, MOGS had tried to buy half of the Feruka pipeline. At the time, Lonmin held 50% of the line. A proposal promoted by then Energy Minister Elton Mangoma and Eddie Cross, then a senior opposition official, would have seen MOGS also build a second pipeline. However, the deal never went though, and Petrozim bought Lonmin’s stake in 2018.

However, MOGS maintained its lobbying over the years, with the support of Cross and, more recently, former Presidential advisor Chris Mutsvangwa.

According to UK company registry listings, Coven’s major shareholder is the Highlands Group, one of whose directors is Heine van Niekerk, a former Delta Mining Executive. Errol George Gregor, who has served as MOGS CEO, is listed as a Coven director.

Gregor has lobbied strongly for the deal for years. In 2014, on behalf of MOGS, he wrote to government saying the plan for a new pipeline would “set up Harare as the regional product supply hub” and that the new pipeline with “an estimated capacity of 400 million litres per month (was) expected to cost US$795 million”.

While Zimbabwe is now planning a second pipeline, it still has spare capacity on the existing one. Feruka has a reported capacity of 2 billion litres per year, and Zimbabwe imported 1,140 billion litres of both diesel and petrol in 2020, according to data from energy regulator ZERA.

NewZwire

ZIMBABWE-focused and diversified mining group, Premier African Minerals, has announced the completion of a new conceptual mine plan for its RHA tungsten project in Matabeleland North province.

The new conceptual mine plan is based on a revised RHA underground mineral resource estimate relating to the parts of the ore body included within the plan.

In a latest update on RHA and the Zulu lithium project in Matabeleland South, the group said the objective of the new conceptual mine plan was to assess the potential impact of returning RHA to production and assess whether the project can generate a return on Premier’s investment.

“Premier has completed a new underground conceptual mine plan for RHA in conjunction with technical assistance from independent South African mine planning consultants, Bara Consulting (Pty) Limited, geological consultants Shango Solutions and metallurgy and
process engineer Multotec Process Equipment (Pty) Limited,” it said.

According to the company, Multotec, the manufacturers of concentration systems including spirals and cyclones, supplied the spiral systems already installed at RHA.

They also conducted test work on a bulk wolframite ore sample from RHA to re-assess and optimise the spiral recoveries and water management at the plant.

Bara Consulting has reviewed Multotec’s test results and proposed, in consultation with Premier, certain changes to the flow sheet.

The conceptual mine plan assesses an underground production rate of 6 000 tonnes per month with a projected mine life of 10 years and indicates a peak funding requirement of US$2,5 million and a payback within 16 months.

“As Premier has resolved not to commit further funding to RHA, the new funding would need to be provided by a third party (being either the National Indigenisation, and Economic Empowerment Fund or another party),” it said.

On Zulu Lithium project, the group said the drilling programme has commenced and despite delays caused by increasing Covid-19 infections in Zimbabwe and Government action in controlling the spread of the virus, it remains on track with its plans to prepare Zulu’s Definitive Feasibility Study in line with previously reported timelines.

Premier chief executive officer Mr George Roach commented: “Surging Covid-19 in the Sadc region is not helping at Zulu where travel and other restrictions are impacting the drilling programme.

“Despite this, the rigs continue to operate and our lab equipment is now only awaiting import clearance to Zimbabwe.

“The drilling is underway at Zulu and is just one component of the Definitive Feasibility Study.”

Mr Roach said they were pleased to be able to provide a preliminary update on the process test work and analysis of bringing RHA back to production based on that part of the underground mineral resources, which the group believes can be cost effectively included in the mine plan at the present proposed 6 000 tonnes per month.

“The next steps for RHA include negotiations with our 51 percent shareholder, NIEEF, to explore alternatives to bring this mine back to production,” he said. 

The Chronicle

VALUE addition and beneficiation of agriculture and mineral commodities would be the most important part of Government policy framework next year as the country seeks to grow exports from the secondary sector.

This would help the country mobilise investments and create employment. According to Treasury, various strategies will be implemented to attain growth of valued added exports, with the Government targeting nearly US$1,4 billion by 2025, from about US$730 million in 2020.

“Priority for the 2022 National Budget will be value addition and beneficiation of agriculture and minerals,” said Professor Mthuli Ncube, Finance and Economic Development Minister.

“This will be achieved through developing and strengthening already existing value chains, beneficiation of minerals and linkage of SMEs with large corporates.”

Last week, the Government banned raw chrome exports to encourage building of smelters locally. Announcing the latest strategy to boost the mining sector during a post Cabinet media briefing, Information, Publicity and Broadcasting Services Minister, Monica
Mutsvangwa, said the moratorium on raw chrome ore exports would promote the local value-addition chain.

Other quick win value chains being prioritised include agro-based value chain, pharmaceutical value chain, bus and truck assembly value chain, iron and steel and general engineering value chain, as well as plastic waste value chain, said Prof Ncube.

The revival of pharmaceutical value is important towards boosting local production and exports of medicines into the region and beyond.

Furthermore, the Covid-19 pandemic had brought to light the weaknesses in the vaccines and medicines supply chain, hence the need for African countries to be self-sufficient in vaccines and medicines due to risks that may arise from border closures.

The Government would also prioritise the leather value chain through increased production capacities from about 30 percent to 75 percent to enable the sector to access local and export markets in line with the Zimbabwe Leather Strategy (2021-2030).

The 2022 National Budget will also prioritise the strengthening of local agro-processing value chains, existing processing capacity and increase throughput from agriculture. The agro-value chains have been identified are soya bean, fertiliser, cotton, sugar, dairy and
leather.

“Furthermore, policy measures will be implemented to encourage and incentivise local producers of agro-inputs and local manufacturers,” said Prof Ncube.

The Government will also expedite implementation of reforms aimed at streamlining and simplifying exporting and importing procedures, eliminating customs delays and improving customs administration.

The Chronicle

Government is set to roll out  mining cadastre system to  computerise the country’s register of mining  rights and titles in the fourth quarter of this year following the completion of a pilot project in Manicaland Province.

The computer-based cadastre system is expected to  enhance transparency  and accountability in the administration of mining titles.

The cadastre system will have all records of interest in the land such as licence holders’ rights,  restrictions and government activities.

The computerised mining register is also expected to be the central database  for storage of information  on applications and licences.

Currently,  mining licence separations  are marked on the ground by metal stakes, concrete beacons or some other fixed points  surveyed using conventional methods such as theodolite or archaic methods  involving tape and chains.

Finance and Economic Development minister Mthuli Ncube said Zimbabwe will migrate to a digital mining cadastre system from the current manual system in the fourth quarter of this year, which is expected to unlock   the potential of the country’s  mineral resources.

It will also help curb corruption  in the allocation of mining claims.

“The implementation of the computerised mining cadastre system is well in progress, with the government having procured both hardware and software for the system.

“A pilot project has since been completed in Manicaland with a view to roll it out to the rest of the country during the fourth quarter of 2021,” Ncube said.

Ncube said determination of the country’s mineral reserves was important in attracting investment and management of the mineral extraction process in order to balance the needs of the present and future generations, given the finite nature of minerals.

He said mineral exploration will be prioritised during 2022 in order to discover new mineral resources and to facilitate the quantification of available resources available in the country, as well as derive maximum benefits from mining activities.

Gold deliveries to Fidelity Printers and Refiners were subdued in 2020 owing to smuggling. But, the situation has improved this year due to incentives introduced by the government.

“Government has since responded by implementing various interventions including introducing incentives,” Ncube said.

He said the interventions have begun to bear fruits as deliveries to Fidelity Printers have increased.

Business Times

The National Oil Infrastructure Company of Zimbabwe (NOIC) has entered into a joint-venture agreement with Coven Energy Limited to establish a second fuel pipeline from Beira to Harare, government said yesterday, a move which makes Zimbabwe as the hub for the transportation of refined petroleum products in the Sadc region.

The project will result in the NOIC and UK-based Coven Energy entering into a 50:50 public-private partnership.

In a post Cabinet media briefing yesterday, Information, Publicity and Broadcasting Services minister Monica Mutsvangwa said the pipeline will be serving Zimbabwe, Botswana, and South Africa with the project  expected to create employment opportunities as well as generate foreign currency for Zimbabwe.

“The partnership will be for a period of 30 years. The pipeline will also help reduce vehicular congestion and the smuggling of petroleum products and the pipeline will be built over four years, at an estimated cost of US$1.3bn,” Mutsvangwa said.

Cabinet resolved that the parties sign a Memorandum of Understanding for purposes of conducting a bankable feasibility study which they will fund.

The project also wants to connect the pipeline to South Africa, Botswana, Zambia, Malawi, and the DRC as part of a long-term plan.

Experts in the oil industry said the deal would radically transform Zimbabwe into a regional petroleum hub, but effectively tilt the dynamics of the local industry largely dominated by Sakunda Holdings owned by business mogul Kuda Tagwirei.

The United Kingdom based firm plans to roll out the project in phases, with the first stage set to receive an US$850m capital injection with the rest expected to come in later stages.

Cabinet also approved the proposed partnership between Bulawayo City Council and Tendy Three (Pvt.) Ltd on the Bulawayo Vehicle Parking Management System Project and proposal for investment by a Belarusian independent power producer in a 100 MW solar energy plant.

Cabinet also approved the proposed partnership involving ZMDC, SIM SEA Pvt Ltd and Honghua International for the resuscitation of Angwa Shaft and the processing of the dump at Chidzikwe.

Business Times

Listed miner, Bindura Nickel Corporation (BNC) has been hit by stubbornly high cost of production, labour and materials, in the quarter to June 30, 2021, which rose 25% to US$10 525 per tonne from US$8 450 recorded reported in the prior comparative period.

Exacerbating the  cost pressures was the planned shutdown and Covid-19-induced lockdowns.

In a trading update, BNC company secretary Conrad Mukanganga said the adverse impact of the cost of local inputs  and the increasing disparity between the auction foreign exchange rate, at which the company surrenders 40% of its revenue for Zimbabwe dollars, and the prevailing parallel market rate battered the miner.

“Production for the quarter was only slightly higher than for the quarter to June 2020.

He said production for both Q1 FY2022 and Q1 FY2021 was approximately 15% lower than average, hence the fixed cost burden per tonne of nickel produced was higher than normal, thus contributing to the higher unit costs.

The production for Q1 FY2022 was affected by the loss of most of the month of April 2021 due to the commissioning of the Re-deep Tie-in Project.

Mukanganga said the company’s production  went up 2% to 93 113  tonnes from 91 322  tonnes while milled ore  rose 4% to 95 518 tonnes from 91 717 tonnes.

Production resumed at the end of April 2021, following the commissioning of these projects.

Despite there being no production for most of April 2021, tonnes milled in the quarter under review were marginally higher than for the comparative period in FY2020.

This was due to the loss of production during the latter period, occasioned by the operational restrictions imposed by the government in response to the advent of the Covid-19 pandemic, coupled with the unavailability of missives in the production mix, which were in turn attributable to lagging development.

Head grade, at 1.45%, was marginally lower than in the prior year. The recovery of 86% was higher, in the quarter under review, than the 85% achieved in the comparative period in the previous year, mainly due to the improved plant performance after the above-mentioned refurbishment exercise.

Mukanganga said  nickel in concentrates went up 2% to 1187 tonnes from 1162 tonnes.

Nickel in concentrates produced was marginally higher than the prior year’s production in the comparative period, mainly due to the increase in tonnes milled.

Nickel sales tonnage for the quarter ended  June 30,  2021 was significantly higher than the tonnage sold in the quarter ended June 30, 2020.

In the latter period, the insignificant sales tonnage was attributable to the temporary suspension of sales, which was necessitated by the need to conclude a more favourable new off-take agreement with Zopco SA, a Switzerland based trading house, in place of the agreement with Glencore.

The average price of nickel on the London Metal Exchange was US$17 343 per tonne during the quarter under review, compared to US$12 197 per tonne, in the same period last year, reflecting the positive impact of the increasing demand for clean energy.

Going forward, the production of nickel in concentrate is expected to be higher than achieved during the quarters ended September 30, 2020 and June 30, 2021 respectively.

Business Times