A Highwall collapsed at ZIMPLATS’ Ngwarati mine and sources at the mine say one person lost their life. Those who were in the shaft reportedly escaped unharmed.
Zimplats officials have promised to provide feedback in due course.
This is a developing story…
Artisanal and Small-scale miners who form partnerships have been encouraged to have a constitution and syndicate agreement as this will safeguard them from future challenges an expert has said.
Addressing miners in a presentation “Priority rights and over pegging” on the Mining Zimbabwe WhatsApp platform Mrs. Thammary Brenda Vhiriri a legal expert said small-scale miners don’t anticipate future problems when entering into partnerships. This was after many inquiries on syndicate challenges being experienced by miners across the country.
“The issue is that most people just get a certificate of registration as a syndicate then they just go and work. You don’t anticipate future problems”.
“You need a constitution and syndicate agreement that will regulate the way you conduct business. Who votes, who works, who sponsors, how does one get removed from the group, what happens to syndicate members’ shares if they die. Such things you all need to sign for. So that you will use that in future in case something happens,” Vhiriri said.
Members of the group also raised an issue of Accredited Agents who connive with certain members of the syndicate to unceremoniously remove some members without following due process. Vhiriri clarified that Accredited Agents are more of employees.
“Please note an Accredited Agent is more of an employee for you. He acts on your behalf instead of all of you visiting the office they go on your behalf. He has no authority to remove or summon you for a meeting,” she said.
She also touched on greed in the syndicates that leads to the unfair removal of some members.
“… one can be subjected to victimisation, especially when people work vakawanda (in numbers). If care is not taken some people will dominate the syndicate and when things start improving they will strategically change all the old members. So it’s everyone’s right to be removed through a proper process. There are issues of death of syndicate members yet they would have contributed to the development of the entity even though small. It’s only fair the members to agree on what to do,” said Vhiriri.
Vhiriri also said small-scale miners should be empowered to recognise that there are running a business for them to be taken seriously by potential investors.
“Let’s empower our miners to appreciate their efforts and recognise that they are running a business. Just like shop owners at growth points, they still get a liquor licence and they are referred to as businessperson. We need to get to a level where small-scale mining is not looked down upon, or associated with poverty because it’s not. Miners need to properly formalise their work. Lack of some form of stability or security is the reason why businesses, sponsors and investors may not take small-scale miners seriously because they know that any other day the syndicate members can just change so how will I follow my investment,” Vhiriri said.
Thammary Brenda Vhiriri is a practising Attorney, Conveyancer and Notary Public at Zuze Law Chambers, registered with the Law Society of Zimbabwe with a wealth of experience in Land and Mining Law, Commercial Law, Constitutional Law, Property Law. She was part of the presentation in her personal capacity and can be contacted on email [email protected]
Young Miners Foundation (YMF) are committed to educating young miners in Zvishavane and Mberengwa on safety and health matters to do with Covid19 late this month.
Shantel Chisango
Speaking to Mining Zimbabwe, YMF President Mr. Farai Kupfuwa said he will together with a team of medical experts, hold campaigns in Mberengwa to suffice young miners with knowledge in regards to fighting against COVID19 in mines.
“We will go with a team of Medical Experts to educate young miners about Covid 19 and health protocols then check body temperatures of young miners.”
He further said he will donate sanitisers and branded face masks to young miners.
Covid has taken its toll on the mining sector and education on how to curb it from spreading is vital. Fatal mine accidents are on the rise with few rescue mechanisms in place with the accidents occurring at illegally run disused mines, with a few happening at legally-run small-scale mines.
Seeing the increase in mine accidents, YMF felt the need to conduct safety and healthy campaign for young miners since they are mostly the ones practising artisanal small-scale mining.
The campaign will be held on the 27th of this month.
YMF will be celebrating its 11th anniversary this year.
Zimbabwe exported US$985 million worth of mattes in 2020 beating gold which was at US$982 million to become the country’s biggest foreign currency earner statistical data released recently has shown.
By Rudairo Mapuranga
The country exported goods worth US$4.39 billion in 2020, a marginal 2.7 percent increase from 2019 with US$4.28 billion, in a tough year in which COVID-19 hit commodity demand and cut off trade links.
According to the stats, the mining sector through minerals still, dominate exports accounting for 73 percent of all total exports.
According to The National Trade Development and Promotion Organisation of Zimbabwe (ZimTrade) Gold lost its number 1 spot on official exports to nickel mattes which are really PGM mattes.
Traditionally, gold has been Zimbabwe’s biggest export. This changed in 2020, a year in which gold deliveries fell by 31 percent to reach 19.1 tonnes which is the lowest output in six years.
“For now, nickel mattes which are really PGM mattes are the biggest exports. In 2020, Zimbabwe exported US$985 million worth of mattes, just beating gold at US$982 million into second place. Nickel ores and concentrates earned US$612 million, diamonds did US$141 million, ferroalloys US$140 million and platinum brought in US$134 million.”
Despite all the government rhetoric over the years about value addition, Zimbabwe’s exports are still made up mostly of primary commodities, largely minerals. Of the US$4.4 billion earned from exports, mineral exports accounted for US$3.2 billion, or a massive 73% of all our exports.
According to ZimTrade, Zimbabwe exported more processed food in 2020 than it did in 2019. Exports rose 17.96% to US$115 million from US$98 million in 2019.
These exports were dominated by sugar, which earned US$76 million. Others included fruit juices (US$5.6 million) and pastry products (US$3.7 million).
“The export promotion agency, this growth was due to access into new markets. Zimbabwean producers increased investment in better technologies and adopted global standards and accreditations on food safety and traceability.”
Zimbabwe’s major export destinations in 2020 were South Africa (39 percent ), UAE (20 percent), Mozambique (9 percent ), Uganda (3 percent), Belgium (2 percent ), and Zambia, Botswana, and Kenya each accounting for 1 percent. Exports to Mozambique grew 15 percent from US$354 million in 2019 to US$408 million in 2020.
The Ministry of Mines and Mining Development has temporarily shut down KAZSHAM mine in Norton following allegations of human rights abuse at the mine, among other offences an official has said.
By Rudairo Mapuranga
The shutdown came after workers and artisanal miners at the mine raised allegations of ill-treatment and slavery-like working conditions.
Artisanal miners in a partnership with Mr. Kazzie, an Indian investor and owner of KAZSHAM mine, late last year, called on the government to intervene in the situation at the mine which they described as “horrible”.
The artisanal miners said Kazzie was treating them inhumanly despite the fact that they are working flat out to produce much gold for the mine.
Kazzie is also being accused of allegedly channelling a large chunk of the mine’s gold production to “smuggling” sighting it as the reason why he has been delaying paying them their percentage as he receives part of the money after the gold reaches its destination.
The artisanal miners said the Indian investor bridged the contract they agreed in which he was supposed to meet all the operations cost-sharing profits at 75/25 with the miners with Kazzie being the sole buyer of the gold from the miners. However, the artisanal miners are said to be now meeting all the operations costs. Kazzie allegedly buys the gold at US$30 per gram and the miners get US$7.5 per gram with operational costs exceeding US$5 per gram milled.
“We had agreed with Mr. Kazzie that he will meet all the operations costs but he has not obliged to our agreement. He has, however, threatened to shut down the mine whenever we confront him, he even pointed a gun at some of us.” the miners said.
KAZSHAM mine has not built a single toilet for the artisanal miners who are numbering up to 200 and over 99 percent of them are working without PPE.
The artisanal miners complained that they were operating at very high risk with their partner sometimes hiring soldiers to beat and intimidate them.
When Mining Zimbabwe approached the KAZSHAM owner in order for him to answer for the allegations raised by the miners, he denied us entry only allowing members of the Police and Norton Miners Association.
Russian diamond producer Alrosa PJSC will buy and donate the Sputnik V coronavirus vaccines to Angola and Zimbabwe to help those nations’ inoculation programs, Chief Executive Officer Sergey Ivanov said.
“We intend to provide dozens of thousands of vaccines to each of these countries upon their availability for exports,” Ivanov said Wednesday in an emailed response to questions. He didn’t specify the amount of vaccines that will be given to the two African nations.Alrosa, which has operations in both southern African countries, will supply the vaccines once emergency-use authorization for the Sputnik V vaccine is granted. “Allowing for time needed to produce the vaccine, we expect first shipments to start from the second half of March,” Ivanov said.The Sputnik V vaccine, once scorned by the West, has now been approved for use in at least 20 countries and shown to rival U.S. and European Union-produced shots with an efficacy of 92%. Zimbabwean Information Minister Monica Mutsvangwa on Tuesday told a press briefing that in addition to the donation from Russia, talks for purchasing more doses have begun.
The coronavirus pandemic hasn’t altered Alrosa’s perspective on Zimbabwe’s diamond-mining prospects and the company intends to “accelerate its activities” there, Ivanov said. Alrosa Zimbabwe, which holds 25 prospecting concessions, expects to receive another “15 by late February to early March,” he said.
Bloomberg News
Alrosa, the world’s largest diamond producer by output, says COVID-19 has not altered its exploration in Zimbabwe and the company plans additional concessions this quarter.
The Russian company entered into a joint venture with the Zimbabwe Consolidated Diamond Company (ZCDC) in 2019, forming a local unit in which Alrosa holds 70%. Under that joint venture, Alrosa has initially targeted diamond prospects in Chimanimani, on claims that were previously held by DTZ-Ozgeo, another Russian joint venture, as well as other greenfield deposits.
Last year, Alrosa cut its production by 22% to 30 million carats as it suspended mining at less profitable sites in response to weak demand, a result of COVID-19. But, despite this, Alrosa says it is continuing with its exploration plan in Zimbabwe.
The company intends to “accelerate its activities” in Zimbabwe, CEO Sergey Ivanov said Wednesday. Alrosa already holds 25 prospecting concessions in Zimbabwe, and expects to add another “15 by late February to early March,” he told Bloomberg.
Alrosa’s announcement that it was investing in Zimbabwe, back in January 2019, was a major boost for investment-starved Zimbabwe. But a combination of COVID-19 and bureaucracy has delayed Alrosa’s Zimbabwe exploration.
At one of the targeted concessions, Malipati, a special grant that spans Matabeleland South and Masvingo, moves towards building a diamond washing plant were delayed last year.
On Monday, President Emmerson Mnangagwa met a delegation of executives from the local unit of Alrosa, who, according to industry sources, reportedly raised complaints around red tape in applications for exploration concessions and other authorisations.
At the signing of the joint venture in 2019, ZCDC had said it hoped the Alrosa investment would help it grow output to 10 million carats by 2023. This ambitious target would place the country among the world’s top five producers, an unlikely comeback for a country whose diamond output fell almost 75% over the past six years.
That target looks even less likely now after ZCDC was last year forced to cut output, suspend gem sales and hold off on new investment.
Alrosa reported sales revenue of US$2.8 billion in 2020.
Apart from Zimbabwe, Alrosa’s only other presence in Africa is in Angola, where it already runs a mine, the Luaxe operation in the north of that country.
According to Ivanov, Alrosa plans to donate the Sputnik V coronavirus vaccines to help the two countries roll out vaccines.
“We intend to provide dozens of thousands of vaccines to each of these countries upon their availability for exports”, he said, without detailing the amount of vaccines that will be given.
“Allowing for time needed to produce the vaccine, we expect first shipments to start from the second half of March,” Ivanov added.
Information Minister Monica Mutsvangwa on Tuesday told reporters that Zimbabwe was in talks with Russia, India and China for the purchase of vaccines.
Mining remains a vital part of a low-carbon future, a fact that was confirmed by the topics prioritised at the recent Investing in African Mining Indaba’s virtual conference this week.
“The message was clear: mining is part of the solution as the planet addresses climate change through a range of renewable technologies,” said Andrew van Zyl, partner and principal consultant at SRK Consulting.
The World Bank estimates, for instance, that production of minerals like graphite, lithium and cobalt could grow by 500% in the next three decades to meet demand for clean energy technologies. A single 3MW wind turbine requires 4,7 tonnes of copper, while solar photo-voltaic cells include glass, aluminium, silicon and even silver. The storage of this renewable energy in batteries is requiring increasing volumes of minerals like lithium, cobalt, nickel and manganese.
Speakers at the Indaba had highlighted the sector’s readiness not only to deliver, but to continue reducing its environmental and climate change footprint, said Van Zyl. The sector is a significant energy consumer, accounting for about 11% of global energy use.
“As mines progress their environmental, social and governance (ESG) strategies, the industry needs to continue moving toward climate-smart mining to cut its carbon and material footprints,” he said.
He noted that the frequent lack of access to reliable grid power for mining sites around Africa has led many companies to develop and apply innovative hybrid energy solutions that include renewable generation in place of traditional fossil-fuel generation. Current hybrid plants already operate at lower cost and with a substantially smaller carbon footprint in off-grid settings. An example is B2Gold’s Fekola gold mine in Mali, where there is a four-year payback and a reduction of 13 million litres per annum in fuel – cutting annual carbon emissions by 39,000 t.
“These initiatives have allowed many mining companies to move their attention beyond Scope 1 greenhouse gas emissions – those that they emit directly from owned or controlled sources – to start addressing their Scope 2 emissions, which are indirectly emitted through the generation of purchased energy,” he said.
There was significant scope for such progress in South Africa, the continent’s energy powerhouse, where mines continue to rely on coal-fired power from the central utility. A number of large mining companies are preparing to implement renewable generation projects as soon as the necessary regulatory provisions are in place, said Van Zyl, and this is likely to considerably reduce their Scope 2 emissions.
“The technological innovations which will help drive decarbonisation, however, also hold strategic risks for mining companies,” he said. “The pace of technology advancement in batteries, for example, is much faster than the general timeframe for developing new mines and production capacity.”
Various technologies still jockey for dominance, and its is far from clear which commodities will be the ‘winners’ in the commercialisation contest. It is even unlikely that any specific minerals will be in permanent high demand, as price spikes will quickly ignite searches for cheaper alternatives.
“In this environment, mining companies will have to manage a volatile price landscape, which tends to complicate the process of costing a project’s viability and raising finance,” he said. “Good technical work in mine planning and implementation becomes more important than ever, as is securing your position on the right part of the cost curve.”
Andrew van Zyl, partner, and principal consultant at SRK Consulting. SRK is an independent, global network of consulting practices in over 45 countries on six continents. Its experienced engineers and scientists work with clients in multi-disciplinary teams to deliver integrated, sustainable technical solutions across a range of sectors – mining, water, environment, infrastructure and energy. For more information, visit www.srk.co.za
While Zimbabwe remains a “hard sell’ as an investment destination on the global investment matrix, there are certain themes that continue to attract a lot of attention amongst investors.
One such theme has to do with areas such as rare earths and the potential of minerals such as lithium.
The main dynamic is that governments all over the world are strongly pushing a shift towards new energy vehicles given that they are an ingredient for the achievement of low-carbon societies.
It is estimated that the proportion of EV, PHV and hybrids in global auto sales might be over 50 or 60% in 2030.
A drastic change in the automobile industry and material sectors is expected to occur.
Since batteries and new-vehicle-motors will take the place of the internal combustion engine, certain mineral resources are going to be in high demand.
A Lithium-ion-Battery requires Lithium, Cobalt, Nickel and Graphite as significant materials.
The demand for these resources is on a surprising uptrend and lithium requirement is likely to reach 36 times current demand by 2030.
In this material demands reshuffle, Africa is likely to perform well given its potential in cobalt and natural graphite.
Morgan & Co Research has also been recommending an equity strategy that revolves around export-oriented stocks as well as regional diversification.
The common question that has come up is whether the mining sector offers an attractive investment proposition for institutional investors on the ZSE?
The mining sector in Zimbabwe contributes an average of 7%-8% to Zimbabwe’s GDP and presents a long-term solution to the forex shortage issues in the country.
Zimbabwe has a rich mineral endowment with one of the world’s largest platinum reserves and has chrome, coal, nickel, diamond deposits as well as significant coal-bed methane discoveries.
Over 40 different minerals have been extracted and mining has remained an important cog in the Zimbabwean economy; creating jobs, earning foreign currency and diversifying the economic base.
We highlight that with relative political and economic stability around 1999, mineral exports accounted for about 45% to 51% of Zimbabwe’s foreign currency earnings.
To unlock value in the mining sector, several economic reforms will have to be put in place to stimulate mining production and reduce the opportunity cost of production.
This can take the form of tax reliefs for certain minerals and the extension of duty-free status for the importation of capital goods.
Such economic reforms will likely yield inflows of FDI and affordable lines of credit leading to increased foreign currency supply.
The growth in the mining sector also has spill-over effects in the broader economy.
For example, mining activities stimulated the development of towns such as Hwange and Kadoma and was a catalyst in the development of basic infrastructure such as road, rail and telecoms.
Our engagements with several private and listed companies in Zimbabwe reveals that one of the key constraints affecting mining operations has been limited capital.
In addition, most mining firms also require foreign currency to import machinery, spare parts and chemicals.
The Zimbabwe Stock Exchange offers access to RioZim and Bindura Nickel Corporation.
In our view, there are more opportunities to participate in the sector through (i) private equity transactions and (ii) investment through international exchanges (London, Australia and Canada).
Batanai Matsika is the Head of Research at Morgan & Co, and Founder of piggybankadvisor.com. He can be reached on +263 78 358 4745 or [email protected] / [email protected]
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