Mining ZimbabweLatest Mining News, Policy and Industry Updates

VICTORIA Falls Stock Exchange (VFEX) listed company, Padenga Holdings Limited, has invested US$50 million in Eureka Gold Mine with the Guruve-based mining project set for opening this month.

Eureka was forced to shut operations after running into viability problems two decades ago with capital shortages at the centre of the mine’s troubles.

Through its gold subsidiary, Dallaglio, Padenga has committed to resuscitate the mine in partnership with the Government.

Speaking recently in Victoria Falls, Padenga Holdings board chair, Mr Themba Sibanda, said the company has a long-term commitment to Zimbabwe and support for the Government’s Vision 2030.

He said the company was also angling on diversifying into mainstream agriculture as he appealed to Finance and Economic Development Minister Professor Mthuli Ncube to facilitate the undertaking.

“Our first results as a listed company in June 2011 reported turnover of US$19,7 million. Ten years later we migrate to VFEX and our last published results for the year ended December 2020 showed group turnover of US$71,4 million,” he said.

“Through its gold mining subsidiary Dallaglio Investments, Padenga is investing US$50 million into rehabilitating Eureka Gold Mine.

“This mine is due for commissioning this month and once in full production, will be a significant contributor to the gold produced in this country and the attendant export earnings.”

Eureka Mine is one of the many projects being resuscitated as the Government targets a US$12 billion mining economy by 2023, anchored on 100 tonnes of gold, alongside platinum group of metals, hydrocarbons like oil and gas, coal, gold, lithium, chrome and ferrochrome as major contributors. Other key projects include Shamva Gold Mine, which was commissioned last year and Blanket Mine installation of a new US$60 million shaft in Gwanda.

Mines and Mining Development Minister, Winston Chitando recently said the US$12 billion target was achievable if producers get improved access to alternative sources of financing such as loans.

The mining sector continues to play a significant role in the country’s economic development, contributing 60 percent of export receipts in 2020. Padenga expects its listing on VFEX to boost its gold venture and balance fortunes on its traditional crocodile skins businesses.

The company started as a small crocodile farm in Kariba in 1965 and was acquired by Innscor Africa in 1998. Over the last two decades Padenga has grown rapidly despite challenging circumstances, which forced the company to move away from the “once viable, simplistic and happy ‘go lucky’ approach to farming practices of yesterday, to more advanced scientifically supported farming methods,” Mr Sibanda said.

He said their strategy, while extremely challenging to implement operationally, has proven beneficial, with Padenga continuing to push the envelope of precision farming, earning the company the three-time exporter of the year award.

This put Padenga in the league of a small group of premium crocodilian skin suppliers globally known for their ability to produce premium grade crocodilian skins.

Padenga listed on Zimbabwe Stock Exchange (ZSE) in 2010 after being demerged from Innscor Africa.

The Chronicle 

THE country’s gold output last month increased by 75 percent to 2,924 tonnes from 1,668 tonnes in May on the back of incentives availed by the Reserve Bank of Zimbabwe (RBZ).

Latest statistics released by Fidelity Printers and Refiners (FPR), which is the country’s sole gold buyer, indicate that last month’s output was 107 percent above 1,409 tonnes achieved in June 2020.

For the six months period to June, small scale miners and primary producers’ output was 9,954 tonnes compared to 10,611 tonnes during the corresponding period last year.

Zimbabwe Miners Federation chief executive officer, Mr Wellington Takavarasha, whose organisation represents small-scale miners said:

“On average, small scale miners produced 1,7 tonnes of the 2,924 tonnes produced last month.

“The increase may be attributed to the incentives the Reserve Bank through FPR has put in place and also some improvement in the cash flow, thus, their (FPR) price was now commensurate with the international market price.”

On the international market, gold price is presently fluctuating between US$55 and US$58 per gramme.

Of the 9,954 tonnes produced during the six months ended June 30, 2021, a total of 4,801 tonnes came from the small-scale miners while 5,153 tonnes were delivered by large-scale miners.

During the same period last year, small-scale miners delivered 6,049 tonnes while primary producers contributed 4,561 tonnes. Smuggling, however, remains a major setback with the most gold believed to be smuggled into neighbouring South Africa and Dubai.

In the first quarter Treasury report for the period ended March 31, 2021, major drawbacks for the mining sector included unstable power supply, heavy rains, which culminated in the flooding of shafts, working capital challenges and subdued demand for some minerals.

In the last three years, Zimbabwe’s annual gold production has declined from 33,2 tonnes achieved in 2018 to 19,052 tonnes in 2020.

In 2019, stakeholders in the mining sector set a target of 40 tonnes but delivered 27,66 tonnes. ZMF maintains that the 40-tonne target is still achievable if all stakeholders make concerted efforts to support production and plug leakages.

The yellow metal is one of the sub-sectors that the Government is pinning hopes on towards the US$12 billion mining strategy by 2023 launched by President Mnangagwa in 2019.

Under the US$12 billion milestone, gold is expected to contribute US$4 billion from about US$2,7 billion contribution to the fiscus. 

The Chronicle

Illegal gold miners in Umguza District are putting the lives of villagers and livestock in danger by using prohibited lethal chemicals such as mercury in search of the precious mineral.

Boitumelo Makhurane

According to scientific studies, mercury is detrimental to human health as exposure can lead to skin disease, infertility and birth defects.
When inhaled, the chemical can also cause lung cancer.

Mercury is used for gold amalgamation in artisanal mining.

The chemicals pose a threat to the health of animals, humans and aquatic life. Gold panning activities are also causing siltation, an accumulation of fine soil that is blamed for diminishing water supplies in the dams that serve the city. Popularly known as “omakorokoza”, the gold panners have ramped up their illegal activity in the city’s catchment areas.

Matabeleland North Environmental Management Agency (EMA) provincial manager Mrs Chipo Mpofu-Zuze said loss of cattle was rampant in Bubi and Umguza districts where most of the illegal activities are taking place.

“The abandoned sites are characterised by severe land degradation, with huge open pits which are a death trap to human beings and animals. Farmers continue to lose cattle to illegal miners who dig pits resulting in cattle falling into those pits,’’ she said.

Mrs Mpofu-Zuze urged villagers to stop abusing the environment, warning those conducting illegal activities that the law will soon catch up with them.

Villagers in Umguza District have raised concern saying they are losing a large number of their livestock as water sources are already polluted with dangerous chemicals such as mercury.

Mr Thembani Thebe, one of the villagers, said he lost two of his cattle as they were drinking in a pit that illegal miners were operating from.

He said the pit is not fenced around and this will cause more people to lose their cattle.

“I have lost two of my cattle that were drinking from the mining pits. I found them lying there after two days of searching. The pit is not secured. making it more dangerous to our children and livestock,” said Mr Thebe.

He said they reported the issue to EMA.

Last month, Bulawayo City Council (BCC) deployed rangers on a full-time basis at its water catchment areas to safeguard the city’s supply dams from being contaminated by toxic chemicals such as cyanide and mercury, following an upsurge in illegal gold panning activities.

Between January and May, council rangers apprehended 229 panners and handed them over to the police.

The Chronicle

PLATINUM producer, Unki Mines, has invested US$48 million towards increasing its concentrator capacity which is expected to boost output by 30 percent.

General manager, Mr Walter Nemasasi said the new concentrator was set for commissioning sometime in September.

He was briefing the Minister of State for Presidential Affairs responsible for monitoring implementation of Government programmes, Dr Joram Gumbo, during a recent visit to the Shurugwi-based mine.

Mr Nemasasi said the new plant was now 75 percent complete and is expected to help cut operational costs.

The new plant will be a second major value addition and beneficiation project by the mine after the commissioning of a US$60 million smelting plant at the mine by President Mnangagwa in 2019.

“Once it becomes operational, the project is expected to increase production of platinum group concentrate at the plant by 30 percent and ultimately increase exports by the same margin,” said Mr Nemasasi.

“We are expecting to commission the new plant by September and the total value will be around $48 million.”

He said the plant will enhance mineral beneficiation that ensures the country derives maximum benefits fom its mineral resources.

“The plant will enable the mine to increase production from 180 000 tonnes a month to 210 000 tonnes,” said Mr Nemasasi.

He said the new development will also cut transport costs by 60 percent as most of the ore will be processed at the mine before being transported to South Africa for separation of base metals and precious stones.

Minister Gumbo, who toured the plant, said he was impressed by the progress saying the investment was critical towards meeting the country’s vision of creating an upper middle-income economy by 2030. He said the new project has created more jobs as the company was employing locals to speed up its completion.

“What is happening here is quite amazing. I am mostly impressed that Zimbabweans are doing the actual work at this site,” said Dr Gumbo.

He said the mine was also assisting locals and urged other mines to emulate what Unki Mines was doing.

“What is also impressive is that our chiefs and locals are being consulted in all the developments.

“We want to see communities living in harmony with mining giants like Unki. I am happy that you are doing well through your CSR ( Corporate Social Responsibility) programmes.”

Minister Gumbo said infrastructure upgrade was critical for sustainable mining development that benefits local communities.

“We need to see a new and modern city sprouting in the rural area as a token of appreciation once you leave this place in future since you are mining a finite resource,” he said.

Minister Gumbo said President Mnangagwa has said minerals should be exploited to develop communities and the country.

“In this regard value addition and beneficiation industries should be within communities so that they benefit from their natural resources,” he said.

Under the Government’s National Development Strategy (NDS 1-2021-2025), priority is being given to developing and strengthening the already existing value chains and beneficiation of the country’s minerals.

“The strategy will also prioritise decentralisation of industrialisation in line with the devolution thrust,” said Minister Gumbo.

The Chronicle

Nkayi villagers in Matabeleland North Province living on the shores of Shangani Dam are crying foul after hordes of gold panners invaded their area in search of gold.

Gold planners from other parts of the country are said to have descended on the area after significant gold deposits were allegedly discovered soon after the Government imposed a national lockdown to slow down the spread of Covid-19 in March last year.

Large numbers of people have been trekking to the area, much to the chagrin of the local community, which fears that their water sources are already polluted with dangerous chemicals such as mercury.

For Mrs Sibonile Ndlovu (57), a widow from Nkuba Village under Chief Tshugulu, their presence is disrupting their way of life.

“They came last year during the Covid-19 lockdown and they just don’t care about what people are going to survive on when they leave. We rely on this Shangani River for our irrigation projects to feed our children while it is also our source of water to drink, but ever since they descended, we have been forced to drink contaminated water and even our irrigation produce has reduced.”

Mrs Ndlovu’s neighbour, Mr Nkosiyabo Donga said different groups of gold panners had marked their territories in the area, leading to conflicts.

“They don’t allow people to fetch water or send their livestock to drink where they mine from. The challenge we face is that we hear that drinking water that has mercury or other substances they use to mine gold is dangerous and we think that is evident because we used to fish at some certain points of the river during grazing and since last year, all those fisheries can be hardly found.”

Other affected villagers are from Mkhalandoda, Mawuwini, Mathetshaneni and Sibuyu. The area’s kraal head, Mr Misomi Gwebu said villagers now opt for dam water and boreholes, although during the summer period they tend to dry up. He said they were avoiding getting water from the Shangani River where gold panners were based. — The Citizen Bulletin.

Sunday News

WOMEN’S rights organisations have urged government to investigate reports of abuse of women in mining to promote justice and encourage female participation in the sector.

In a joint statement after a virtual gender and extractives symposium last week, four women organisations said: “We now, therefore, call on the government and relevant stakeholders to provide continuous oversight and monitoring of the activities of mining companies.”

The women’s groups — Women and Law in Southern Africa, Zimbabwe Women’s Microfinance Bank, Zimbabwe Women Resource Centre Network and the Zimbabwe Women in Mining Association — called for protection of women as they conduct mining business.

“The government through the Zimbabwe Gender Commission should monitor the violation of environmental, economic, social and cultural rights of women affected by mining activities in their communities.

“The commission should investigate reports and institute the necessary processes that ensure communities get access to remedy.”

The organisations also applauded the government for joining forces with stakeholders to address machete violence among artisanal miners.

“Although over the years, there have been changes in men’s attitudes towards taking more responsibilities for unpaid care work, promotion of decent work for women in sectors such as the extractives industry is still a challenge which calls for urgent attention.

“Decent work is the only sustainable way out of eradicating poverty while building the necessary social cohesion.

“Therefore, there is a need for continued partnerships and engagement of stakeholders, policymakers, and relevant government ministries to promote decent work for women in the extractive industry.”

NewsDay

PASSERS-BY along the Gweru-Zvishavane Highway cannot help but shake their heads in dejection as they watch the once picturesque landscape slowly turning into unsightly craters and gullies — the work of small-scale miners scooping out tonnes of soil chasing fortunes hidden underneath the earth’s belly.

When NewsDay Weekender visited Shurugwi last week, scores of people could be seen loading soil and making off with trucks carrying heaped sedentary rocks from makeshift mines dotted around the area.

While locals are concerned as they helplessly watch their environs turned into wasteland, the activities are a boon to those in the thick of things, especially Chinese miners.

Tafara Nelson (38) says while chrome mining has been his only source of livelihood for the past decade, it is not rewarding.

“Since we don’t own mining equipment, we depend on Chinese contractors. After providing us with equipment, we are required to sell our produce to them,” he says.

Nelson, who is contracted by Chinese miner Jinan, says the language barrier also makes it difficult for them to negotiate fair payment terms.

“The result is that we get unfavourable conditions,” he adds.

Another small-scale miner, Martin Chitohwa, contracted by Zimasco, says as long as the status quo remains, locals will toil for nothing.

“Contract miners only get the final product price when graded and weighed at their Kwekwe plant. Who will ever know if the grading and weighing was done fairly?” Chitohwa asks rhetorically.

“They usually come to collect ore at night. In the morning, we are told, for example, that your chrome ore was 22 tonnes. Of that, 15 tonnes were lumpy and seven tonnes were fines and the grade was 42%, so we are paying you for the 15 tonnes at agreed price which is usually low.

“They penalise you on the fines. However, some smelters take both fines and hardy lumpy ores and price is indifferent as long as your fines are free from rubble.”

He says predatory pricing pushes local miners out of business.

Chinese company Sinosteel Corporation is the biggest shareholder in Zimasco, one of the country’s largest chrome-mining companies.

A Jinan official, Zhou Zhengliang, says while he does not deny that there are some bad apples in the chrome value chain, their operations are above board.

Zimasco chief executive John Musekiwa had not responded to questions sent to him by the time of going to print.

However, Confederation of Chrome Miners Association president Isaac Muguti Chivendera says smelters have exploited small-scale miners for too long.

“Small-scale miners are walking home empty-handed after delivering their product to private smelters, especially the Chinese,” he says.

“Buyers come to our claims and promise good prices, for example US$55 per tonne, carry the product to their smelting plants, then when you get there, they factor in transport costs and fines like breakages, then end up taking ore for a song. It then becomes difficult to continue mining because we pay as much as US$20 per tonne for labour.”

Former Zimbabwe Mining Federation vice-president (chrome and base metals) Simon Sigauke says this is a worrisome development as Zimbabwe is losing out to unscrupulous buyers.

“Chinese miners hire out machinery to small-scale miners at exorbitant rates and recover their money upon buying their proceeds. Our all-weather friends are making a killing from equipment that they would have imported duty-free,” he says.

“To make matter worse, most Chinese companies don’t issue out invoices as proof of payment. One wonders how these miners account for their tax obligations. Apple Bridge needs resuscitation urgently.”

Apple Bridge was a State entity, which bought chrome from small-scale miners after they complained that were being fleeced by private smelters buying the mineral below the market price. However, it is facing viability challenges.

“There is great need for government to resuscitate Apple Bridge for viable price monitoring and protection of local miners from being exploited by unscrupulous merchants,” Sigauke adds.

However, analysts say predatory pricing in one of Zimbabwe’s main exports will have negative after-effects on the socio-economic well-being of the country.

“Illicit financial flows (IFFs) occasioned by underhand dealings in the mining sector have deleterious effects on both the economy and society putting into perspective that minerals are Zimbabwe’s cash cow,” says University of Zimbabwe lecturer on natural resources governance, Babra Maiwasha.

“It is pertinent to note that the achievement of the US$12 billion mining sector and the broader Vision 2030 rests on the mining sector to boost domestic revenue. This precipitates the need for effective reforms and safeguards to foster transparency and accountability in the mining sector,” she adds.

“While these IFFs are difficult to quantify, they have a negative effect on the socio-economic status of the country in that funds that could have been used to develop these areas are instead illegally taken to tax havens through myriad of tax evasion tactics,” Centre for Natural Resource Governance director Farai Maguwu says.

The mid-term monetary review presented by Finance minister Mthuli Ncube last month was gloomy, revealing that chrome output for 2020, at 1 272 million tonnes, remained below the annual target of 1 800 million tonnes and was 18% less than the 2019 output of 1 550 million tonnes.

Basing on potential that lies in the sector, the government in 2019 launched an ambitious US$12 billion mining sector economy by 2023, a 312% increase from the current US$2,91 billion.

NewsDay

CABINET has approved the Greater Chinhoyi Copper Development Programme which is set to contribute to the US$12 billion mining economy by 2023.

The Government has recognised the mining industry as one of Zimbabwe’s major economic sectors to drive the country towards an upper middle-income economy status by 2030.

It is in this context that President Mnangagwa in 2019 launched the US$12 billion mining strategy.

Speaking during a post-Cabinet media briefing meeting on Tuesday, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said: “Cabinet approved the Greater Chinhoyi Copper Development Programme which entails six copper projects becoming operational by 2023.

“A further three projects are greenfield projects which will have resource definition being undertaken with the objective of making them operational.”

She said the Ministry of Mines and Mining Development will be submitting proposals on the six projects in due course.

“The re-treatment of the Mhangura and Alaska copper dumps and the reopening of Angwa Mine in Chinhoyi and Shamrock Mine in Hurungwe were approved by Cabinet.

“Proposals on two other projects to make them a total of six will be presented in due course,” said Minister Mutsvangwa.

She said the Shamrock Mine project is a joint venture between the Zimbabwe Mining Development Corporation (ZMDC) and Govine Enterprises and is expected to reopen by the end of 2022 employing an estimated 4 500 people and generating US$32 million per annum.

The other joint venture is between ZMDC and Hongua International and involves the re-opening of Angwa Mine and the Chidzikwe dump which will be operational by mid-next year employing an estimated 400 people, generating an estimated US$33 million per annum.

Under the US$12 billion milestone, gold is expected to contribute US$4 billion, platinum US$3 billion while chrome, iron, steel diamonds and coal will contribute US$1 billion.

Lithium is expected to contribute US$500 million while other minerals will contribute US$1,5 billion.

By 2030, it is envisaged that the mining industry would be contributing at least US$20 billion.

In line with its objectives, the strategic roadmap has started creating a conducive environment for local and foreign investors.

The Chronicle