Mining ZimbabweLatest Mining News, Policy and Industry Updates

THE ongoing efforts by the Second Republic towards structural transformation from an exporter of predominantly primary products to value-added products will unlock the export potential of the country.

First, the National Development Strategy 1, launched by President Mnangagwa last year, is targeting to develop and domestic local value chains.

This way, the country will be able to add more value on its export offerings, while at the same time improving local industries, creating more jobs, and substituting its imports.

Developing local value chains will also maximise revenue and provide cushion from global shocks experienced in primary commodities. Development of local value chains on the back of abundant natural resources should be easily achieved if all stakeholders play their part.

Whilst domesticating local value chains is important, it is also crucial for the local industry to participate in regional value chains, underpinned by a strong industrialisation drive.

Compared to other countries in the region, Zimbabwe has enabling infrastructure that will make it easy for local industries to play an important part in regional value chains.

But why does this matter?

Entering or participating in regional value chains and global value chains has become a key strategy for developing countries to increase their trade and attract investment from developed countries. This emanates from the fact that it may be complex to produce a whole unit, for example electric cars, but it can be easier to focus on a component that will be attached to make a whole unit.

Regional value chains refer to regional production sharing, a phenomenon where production is broken into various stages and tasks are carried out in different countries in the region. Companies over the world are creating linkages and operations, from the design of the product, manufacturing of components to assembling, marketing, and creating international production chains.

Value chains with potential

The Action Plan for SADC’s Industrialisation Strategy and Roadmap (2015-2063) approved in 2017, identifies Zimbabwe as having potential for value chain enhancement in agro-processing, minerals and beneficiation, as well as pharmaceutical products. The Action Plan also notes potential for manufacturing, machinery and equipment, as well as the services sector.

In agro-processing, local companies can participate in horticulture, as well as production and processing of sugar, meat, fish, and soya value chains. Here, there are vast options spanning from supply of agricultural inputs and implements, provision of related services and processed foods.

The strong linkages between the local agricultural production sector and the processed foods sector makes Zimbabwe an ideal hub for agricultural production and processing.

In minerals and beneficiation, local companies can participate in value chains related to energy minerals (coal), iron and steel, base metals, diamonds, fertilisers, platinum, and cement. When looking at Zimbabwe’s current export product structure, minerals and alloys account for the largest share. Whilst most of these minerals and alloys products are exported as raw materials, there is potential for the sector to contribute more to national exports and economic development through value-addition and beneficiation.

In terms of the pharmaceutical products’ value chain, the Action Plan for the SADC Industrialisation Strategy and Roadmap identifies Zimbabwe as having potential in anti-retroviral (ARV) and TB (tuberculosis) drugs.

In the manufacturing sector, Zimbabwe is identified as having potential in leather and leather products, as well as clothing and textile. There are further opportunities in automobile products and services sectors such as tourism, financial services, as well as Information and Communication Technologies (ICTs).

For local companies planning to take part in these sectors, emphasis should be on understanding the entire specific value-chain and what is required to take full advantage of export opportunities it presents.

Opportunities through value-addition With opportunities available under the African Continental Free Trade Area (AfCFTA), SADC and COMESA, Zimbabwe will also benefit more due to its land-linked status.

Zimbabwe’s trade is mainly concentrated in SADC hence value chain strategies will then act as a catalyst to assist the country in expanding its industrial base, diversifying its export product range, and pursuing unexplored African markets. Zimbabwean companies that can find a way to build or enter already existing value chains may be able to benefit under the Made in Africa concept which has gained more traction through the AfCFTA Rules of Origin.

Private businesses should take advantage of regional value chains because they are better placed to efficiently choose entry and exit points in value chains. For example, the country has potential to be a leading player in the leather and leather products value chain through production of finished leather.

With support, local tanneries can process leather coming from countries such as Botswana and Namibia into high-end finished leather, which can be exported to feed into the leather manufacturing sector across the region. Although Zimbabwean companies may not be producing electric cars as other players in the region, the country has vast deposits of lithium which is used to manufacture batteries used in electrics cars.

Instead of exporting raw lithium, local industries can build competences in the sector and produce high-efficient batteries used in the vehicles, thus playing an important role in the production process of the cars. Lithium batteries are also used in manufacturing solar batteries, given vast deposits of lithium in the country, we may become a regional hub for producing batteries giving us the competitive edge to supply them.

Opportunities for the services sector

It is important to note that the discussions around participation in value chains should not be a preserve of players in the manufacturing sector alone as there are also huge opportunities for the services sector.

There is room for local players to build competencies around available human capital. For example, there is room for some local businesses to increase their reach in the regional market by offering marketing and communication services such as operating a Regional Call Centre for companies across the continent.

With faster internet in all parts of the country, a company in towns such as Zvishavane, Mutare, Gweru, Bindura or Chinhoyi will be able to offer services without needing to move its staff across the region.

Riding on Zimbabwe’s good academic reputation, there are also opportunities in the education sector for increasing Zimbabwe’s trade in services, with easy wins such as exports in study programmes and online learning targeting foreign students.

This can benchmark and model around existing frameworks used by leading online institutions such as University of South Africa which services over 130 countries globally.

Already, Zimbabwe has a decent pool of qualified professionals that can satisfy these demands.

For example, Zimbabwe has an opportunity to export teaching services to regional markets, particularly in subjects such as English, Mathematics and Science.

Markets such as Angola, Mozambique and Namibia have a high demand for English teachers.

Going forward

To improve the participation of Zimbabwean companies in regional value chains, there is a need for local companies to identify their entry points based on resource endowments, capabilities, capacities, and skills.

Here, the private sector should participate in areas where they can easily attain best value, based on areas they enjoy comparative and competitive advantages.

There is also a need for further support to the private sector through infrastructure upgrade and retooling, which will improve current manufacturing capacities and enhance competitiveness.

Reinforcing the institutional support infrastructure and strengthening research and innovation will also go a long way in improving the participation of the country in regional value chains.

The Sunday Mail

A MINING company operating in Mberengwa has continued to defy the Government ban on alluvial gold mining despite warnings and orders from the Environmental Management Agency (Ema).

The Government released Statutory Instrument 104 of 2021 Environmental Management (Control of Alluvial Mining) (Amendment) Regulations, 2021 (No 2) as a subsequent legislation to the Ema Act which regulates alluvial mining operations in the country.

However, the mine, which operates along Dohwe River near Mberengwa Rural Service Centre which is licensed to undertake rubble, opencast and reef mining, has now encroached into Dohwe River catchment and is now practising alluvial mining with the use of heavy equipment such as excavators, front-end loaders and tipper trucks resulting in massive environmental degradation.

Efforts by Ema to control the mining have been fruitless despite issuing the company with tickets, sources said.

Midlands provincial environment manager, Mr Benson Bhasera said several efforts to stop the environmental crimes over the past two months have not been fruitful.

“An order was served on 1 July by our district official to stop operations and rehabilitate the area but the manager refused to sign the documents, saying that she needed to consult the interpreter before signing. The order was then accepted two days later but operations continued.

“Another inspection conducted on 8 July assessed the extent of riverbed and river bank excavation and an order to cease operations was served as well as a ticket worth $800 000 was charged. Despite these efforts, the miner continues to operate. We have since engaged critical stakeholders such as the Ministry of Mines, Mberengwa RDC and the police as we seek to take the route of opening a docket.”

Mr Bhasera said the miner was wilfully disregarding the law as stipulated in the sections 6, 7 and 8 of the Statutory Instrument. Section 6 states: “Under no circumstances shall alluvial mining be carried out through use of mechanical equipment or motor-powered equipment unless express authority has been granted for such as envisaged in section 3(1).

Section 7 notes that the use of mercury and cyanide or any other chemical for purposes of processing of ore or any other mining related activity is prohibited within the defined minimum distances set out in subsection (3) and subject to verification through the EIA process, while section 8 says; Any person who contravenes this section shall be guilty of an offence and liable to a fine not exceeding level 14 or to imprisonment for a period not exceeding twelve (12) months or to both such fine and such imprisonment.

Efforts to contact the mine manager were fruitless as he was said to be in Harare.

Meanwhile, communities leaving downstream of Dohwe river are reportedly being subjected to contaminated water through the use of mercury in the processing of gold.

The Sunday News

THE Zimbabwe Power Company (ZPC) has surpassed its production target for the second quarter by 11,2 percent, generating 2,162 Gigawatts per hour against the targeted 1,944GWh.

In an update for the quarter under review, the power utility indicated that Zimbabwe’s biggest power plant, Kariba Hydro-Electric Station, accounted for 70 percent of electricity generated in the second quarter.

“In the period under review, ZPC sent out 2,162GWh against a target of 1,944GWh thereby surpassing the target for the second quarter by 11,2 percent.

“Kariba Power Station contributed 70 percent of the total energy production in the second quarter. Hwange Power Station contributed 28 percent while the small thermals contributed two percent to the total energy production,” said the power utility.

The 2021 second quarter output was 56,18 percent above that of the same period in 2020. Year to date, ZPC sent out 3,991GWh, thus, surpassing the year to date by 25,22 percent.

“Although the small thermals missed their quarterly target by 34,15 percent, there was a notable improvement in generation at Hwange Power Station during the quarter as units 3 and 6 returned to service from long outages.

“Relief came from Kariba Power Station, which was ramped up to compensate for the low generation at the small thermals hence contributing to the increase in output against the set target,” said ZPC.

It said the US$1,5 billion Hwange Power Station Units 7 and 8 expansion projects closed the quarter at 67,97 percent complete.

The expansion project, which entails the addition of Units 7 and 8 with each unit expected to generate 300MW, was affected by the Interim Payment Certificates (IPC) outstanding payments as well as the Covid-19 pandemic.

“However, notable progress was noted in the period under review despite the challenges being faced.

“The advance payment guarantee and confirmation of full funding was received for the upgrading of Deka. Corporate authorisation to proceed with the project was also granted and the contractor has since started topographical surveys on site,” said ZPC.

“Occupational health and safety are of utmost priority in the workplace and ZPC strives to achieve the set target of zero harm to people, plants and environment.”

In view of this, the company continues to battle with the effects of the Covid-19 pandemic and in a bid to curb the spread of the disease in the workplace, ZPC was providing employees with Personal Protective Equipment as well as regular disinfection of pool vehicles and offices. 

The Chronicle

The Zimbabwe Miners Federation (ZMF) has implored  women with disabilities to fully participate in mainstream mining activities.

ZMF secretary for people with disabilities, Prazini Jakata said  they should take advantage of the new policy.

“No one has been left out. ZMF has made it simple for people with disabilities to be involved in mining. They have put representatives for people with disabilities from provincial to national executives.

“And they have also assisted in the change of their constitution to accommodate people with disabilities,” Jakata said.

He added: “What is only there with young women with disabilities in mining is that they fear to travel a long journey they never travelled. It is just out of what they hear from the corridors of those who have failed to achieve anything.

“Personally I would encourage young women to take up mining because ZMF will always protect them. They will always try to make life easier for them.

“ZMF  is the first organization to recognise disability in its own structures as demonstrated by our inclusion by the constitutional amendment as witnessed at the Zimbabwe International conference centre on March 16,2021.”

He said some provinces under the ZMF  have  syndicates for persons with disabilities.

“When the president launched the National Disability policy on June 9, 2021, ZMF already catered for persons with disabilities.

“As we speak right now I am sure in Masvingo we have 51 syndicates for persons with disabilities. So if young women with disabilities remove that fear from themselves they will find themselves living large because they will be having resources as they extract minerals from the ores,” Jakata said.

He said people normally have negative perceptions when it comes to small-scale mining.

“For some reasons people normally say negative things about mining or what they call kukorokoza. We can make it as people with disabilities. What is needed is the prospector’s license at the first stage. Once you have the license you automatically acquire or peg mining claims anywhere in Zimbabwe,” he said.

Jakata said there were sponsors who were willing to sponsor small-scale miners in the country.

“None will be left out whether it’s women or men. There are a lot of packages that ZMF holds including reduction of membership fees, tagging fees, the CBZ bank has got other partners and a host of other potential sponsors who are willing to assist us to pass through hurdles that we fear. You can get a prospector’s license alone or form a syndicate and a mining claim of two or more people. Anyone who is a citizen of Zimbabwe and is above 18 can get the prospectors’ license,” said.

Business Times

In its inaugural environment, social and governance (ESG) report covering its 2020 operational performance at its Blanket mine, in Zimbabwe, London-listed Caledonia Mining Corporation has highlighted some of its key achievements.

These include that 99 percent of its 1 671 employees and contractors originate from Zimbabwe, the majority of whom live in a dedicated mine village, while 25 percent of suppliers were from Zimbabwe.

The company’s employees own 10 percent of the mine through a trust, which currently receives 20 percent of Blanket’s attributable dividends and is represented on Blanket’s board of directors. The trust has facilitated US$5.1-million in dividends to the community from 2012.

Caledonia’s corporate social responsibility (CSR) programme at Blanket focuses on education, health, agriculture, women and youth empowerment, the environment and charity.

The company’s CSR investments in 2020 totalled $1.7-million, while its taxes and royalties payment to government totalled US$12.5-million.

The Zimbabwean government owns 16 percent of the Blanket mine through its National Indigenisation and Economic Empowerment Fund, which currently receives 20 percent of the mine’s attributable dividends and is represented on the board of directors.

The company paid out US$4.5-million in dividends in 2020, after generating a gross profit of US$46.6-million from the sale of 57 899 oz of gold.

“The long-term success of our business relies on mutually supportive, open and constructive relations with our local communities,” CEO Steve Curtis states in the ESG report.

He comments that Caledonia in 2020 enhanced its focus on ESG with the constitution of a new board-level ESG committee.

In terms of its environmental impact, Caledonia is building a 12 MW solar farm, which is expected to be operational sometime next year and will provide 27 percent of the mine’s daily electricity needs.

The Blanket mine’s power consumption totalled 65.9-million kilowatt-hours in 2020.

Of the mine’s 2.2-million cubic metres of water used in 2020, 23.4 percent of it was pumped from mine workings and the balance was drawn from a nearby dam.

In terms of safety, COO Dana Roets reports that the company’s Nyanzvi initiative, which was launched in 2018, has continued to ensure reduced total accidents by 60 percent from 2017 to 2020.

In 2020, Caledonia only had one positive case of Covid-19 at Blanket, but it has subsequently reported 46 positive cases, with one fatality as a result of the virus. The company in March this year committed to procure vaccines for all Blanket employees and their families.

Caledonia had, as at the end of 2020, 12.5 percent female representation on the Blanket board, 25 percent women in senior management and 2 percent female employees.

Curtis says the company continues in an evolving journey towards a more diverse workforce, and safer and cleaner operations.  –

Mining Weekly

CALEDONIA Mining Corporation Plc, which owns Blanket Mine in Gwanda, has released the inaugural Environmental, Social and Governance (ESG) report for the Gwanda-based gold producer.

The report covers the reporting period January to December 2020. In a statement, Caledonia chief executive officer, Mr Steve Curtis was quoted as saying: “I am pleased to present this inaugural ESG report, which constitutes our first formal communication on Caledonia’s approach to ESG topics.

“In the report we focus on five key pillars, which define our strategy.  We believe this inaugural report is an important step in providing an update on our performance in this vital area of the business and will therefore endeavour to continue to develop our ESG communications.”

The Chronicle

Mineral resources in Zimbabwe are vested in the President. The principal Act is the Mines and Minerals Act (Chapter 21:05). There are other Acts and regulations as reported in my previous articles on mining.

Prospecting

For one to prospect for minerals he or she needs a prospecting licence. The holder of a prospecting licence will have the following prospecting and pegging rights subject to sections 21 and 368:

The right of prospecting and searching for any minerals, mineral oils and natural gas on land open to prospecting, but not the right of removing or disposing of any mineral discovered. Allowed exceptions are for the bona fide purpose of having it assayed or of
determining the nature thereof or with the written permission of the mining commissioner.

The right of pegging of one block of precious metal claims, one block of precious stones claims or one block of base mineral claims.
Section 27(2) prohibits drilling or excavation work at the surface or underground unless done on the strength of exclusive rights.

Land open to prospecting

The following land is open to prospecting:

All State land and Communal land, All private land on which is reserved the right to all minerals or the power to make grants of 
the right to prospect for minerals.

All land held by any person under any enactment or agreement whereby such person is entitled to obtain from the State title thereto on the fulfilment by him of the conditions prescribed by such enactment or agreement.

Duration of prospecting licence

According to section 23 of the Act a prospecting licence shall be valid for two years. However registration of a prospector is valid for 5 years.

Acquisition of prospecting licence

A prospecting licence is acquired in terms of section 20 of the Act. A person over 18 years of age who is a permanent resident of Zimbabwe or any duly appointed agent of such person may take out at the office of any mining commissioner one or more prospecting licence.

The applicant has to pay the prescribed fee.

On making application for a prospecting licence the applicant shall furnish to the mining commissioner the following:

Applicant’s full name
Permanent postal address

Such information as the mining commissioner may require.

The mining commissioner may issue or refuse to issue the prospecting licence. Where the mining commissioner refuses to issue the licence he or she should forthwith report the refusal to the Secretary (in the Ministry).
The Secretary shall refer the report to the Minister. If so instructed by the Minister the Secretary will direct the mining commissioner to issue the prospecting licence.

In terms of section 21 an approved prospector may be appointed as a representative of a prospecting licence holder. Such a representative shall act under the prospecting licence to which his appointment relates solely for the benefit of the licence holder.

Sale is prohibited
The sale of a prospecting licence is prohibited by section 25.

Ground not open to prospecting

Section 31 of the Act applies. There is ground on which a holder of a prospecting licence or any special grant is not allowed to carry out prospecting operations. Various scenarios are covered such as:
Private land
Any mining location other than one in respect of which he or she may have acquired the exclusive right of prospecting under such licence or special grant or exclusive prospecting order.
Within surveyed limits of any city, town, township or village, Certain land outside surveyed limits of any city, town, township or village.
Upon any Communal land occupied as a village without the written consent of the rural district council established for the area.

Notice of intention to prospect
In terms of section 38, every person, before exercising rights associated with the prospecting licence or special grant to carry out prospecting operations shall give notice of hisor her intention to do so.

Such notice shall be valid for 120 days. A notice given by a holder of an exclusive prospecting order or a special grant to carry out prospecting operations shall be valid for the period of that order or special grant.

Prospecting notices

According to section 41 any holder of a prospecting licence who wishes to drill or excavate, whether at the surface or underground, shall post a notice to be called “prospecting notice” on the ground open to prospecting.

Discovery of minerals or precious stones
Section 42 applies. If a holder of a prospecting licence discovers within the area covered by his prospecting notice, any ore or deposit of precious metals or precious stones, he or she shall mark the point of such discovery.

Pegging of precious metal, precious stones or base mineral blocks is done in terms of section 43.

Registration

Mining sites are registered in terms of section 48 and blocks in terms of section 45.

Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.

Godknows Hofisi, LLB(UNISA), B.Acc(UZ), CA(Z), MBA(EBS,UK) is a legal practitioner / conveyancer with a local law firm, chartered accountant, insolvency practitioner, registered tax accountant, consultant in deal structuring, business management and tax