Mining ZimbabweLatest Mining News, Policy and Industry Updates

HYDROCARBONS and platinum were among the top discussion points at the Chamber of Mines’ three-day annual indaba that ends in Victoria Falls today.

Officially opened by President Mnangagwa yesterday, the conference is being held under the theme: “Navigating turbulent times — Sustaining growth of the mining industry beyond Covid-19.”

Mining investors and executives discussed a number of issues on the local mining industry with the country’s hydrocarbon potential and platinum leading. There were two symposia, one focusing on oil and gas while the other was on platinum.

Gold is an old mineral, whose potential remains enormous, just like chrome, lithium, coal, diamond as well as platinum.

However, we, as the Minister of Mines and Mining Development Winston Chitando said on Thursday, have a soft spot for oil and gas, an emerging mining sub-sector in the country and one which has stupendous potential.

There is hydrocarbon potential in Lupane and Chiredzi but progress towards exploration of a highly prospective target in Muzarabani has got us dreaming.

We have seen how oil and gas have performed socio-economic miracles in Qatar, United Arab Emirates (UAE), Brunei, Saudi Arabia and Kuwait among other countries. The countries are among the world’s richest and most well-developed. Standards of living of their people are out of this world. Everything is perfect through and through. All this has been possible because of the countries’ oil and gas endowments.

In Africa, Algeria and Egypt are heading up there; Angola is moving up as is Nigeria. Mozambique is on the cusp following impressive offshore discoveries north of that country.

The advances that are being made by Invictus Energy and its local partner, One Gas Resources at their oil and gas acreage in Muzarabani are making us dream that with judicious management of revenue from the hydrocarbons, Zimbabwe could develop as fast as Qatar, UAE, Kuwait and other oil producing nations have done in recent years.

Minister Chitando said his ministry has an inclination towards oil and gas.

He said: “This is an opportunity to critically explore the potential that exists in Zimbabwe’s oil and gas mining industry, to share experiences in developing a world-class oil and gas mining industry leveraging on the gains from our economic reforms, engagement and re-engagement with the international community.

The oil and gas sector is one among other resources that have the potential to contribute towards the speedy attainment of our national vision to become an upper-middle-income economy by 2030. Given the strategic importance of oil and gas in Zimbabwe, my ministry is strategically monitoring and evaluating the progress made in terms of exploration of the occurrence of this strategic mineral in Muzarabani.”

Geo Associates, the partnership between Invictus Energy, registered in Australia, and One Gas Resources, a locally-owned company, must be commended for the work they are doing that could lead to exploratory drilling at Muzarabani in the next few months.

That, we are optimistic, should lead to a commercial discovery, paving the way for the mobilisation of resources for development and extraction of the gas and oil from that target.

But for greater value to be unlocked from the oil and gas, we want the Government and Geo Associates to work out a programme for value addition. Qatar, UAE, Kuwait and Saudi Arabia are so rich because they are exporting refined oil, which pays big, not crude which is cheaper. They are also processing their gas to produce electricity and other products.

So as soon as a commercial discovery is made at Muzarabani, development is done, it must not take a long time for the investors, working with the Government, for more value to be added to the oil and gas.

The people who are paying so much for petrol and diesel will look forward to both fuels being cheaper as they would be made from locally-mined oil. They, too, would be happy that some of the gas to be used for electricity generation so that the national reliance on hydro and coal generation is reduced. That would ensure more energy security and possibly lead to lower electricity prices.

A full-fledged oil and gas industry also means more jobs and greater national development.

The Chronicle

The Chronicle

Zimbabwe’s gold export receipts have plunged 35% to US$78.4m in May from US$120m achieved in the prior comparative period as the yellow metal deliveries to the country’s sole buyer and marketer, Fidelity Printers and Refiners dropped.

While receipts in January this year were lower than of the prior comparative period, export receipts from February to April 2021 were higher than the same period last year.

But the continuous fall in gold deliveries has been attributed to the plunge in May.

Commenting on the plunge, the Reserve Bank of Zimbabwe (RBZ) governor John Mangudya told Business Times that subdued gold deliveries have culminated into a decrease in export receipts.

“The country made total gold shipments of US$78.4m in May 2021 from US$120.1m earned during the same period last year.

This is the first time since February this year that the country’s gold export earnings have plummeted on a month on month comparison basis due to the subdued deliveries,” Mangudya said.

Gold export receipts in January 2021 were at US$53.1m from US$98.1m during the same month last year on subdued deliveries due to Covid-19 effects, heavy rains that the country has experienced in January and the failure to remove costs on small scale gold miners.

In February  this year the country shipped out gold worth US$66.1m compared to gold shipments  worth US$56.1m while in March 2021 gold export receipts  reached US$81.2m  compared to  US$71.9m against the  same month in 2020.

Overall, gold export earnings decreased 8% to record US$375.8m during the first five months of the year against US$409.68m recorded during the same period last year.

Gold deliveries have bounced back for the first time in March 2021 after recording a positive improvement of 2% to reach 1.80 tonnes from 1.77 tonnes recorded during the same period last year due to the slowing down of the rains in the period under review.

Small scale producers’ subdued performances have caused a general decline in gold output in the past year with the primary producers maintaining the same output over the years.

Ironically, small scale miners are getting 100% forex retention threshold while large scale miners are getting 60%.

Recently, Fidelity Printers and Refiners general manager Fradreck Kunaka revealed that the country could be losing over 30 tonnes yearly valued at US$1.7bn due to smuggling and unfavourable mining policies.

Kunaka said the country should totally liberalise the gold sector to combat smuggling and compete at the highest level with foreign gold buyers.

Meanwhile, Gold Miners Association of Zimbabwe chief executive Irvine Chinyenze believed the country could earn more if fundamentals are addressed.

“…Government should come up with friendly policies that encourage the miners to deliver gold to the FPR.

“Unnecessary costs like that of importing cash should be removed and there is a need to bring in more new players to allow competition to improve bullion deliveries,” Chinyenze said.

The country’s gold output plummeted 31% to record 19.052 tonnes during 2020 from 27.66 tonnes recorded during 2019 due to Covid-19 effects, delay in payments and low foreign currency retention levels.

A recent mining report advised that the government should pay gold producers at world prices to woo them into selling the yellow metal through the formal channels.

The report blamed FPR’s flawed centralised gold buying scheme and called for the law to bring complicit powerful politicians to book as they are believed to be sponsors of machete gangs’ violence in the Midlands Province and in Mazowe District.

Economic analysts said the 100 tonne gold output target by 2023 can be achieved if the authorities put in place friendly mining policies and incentivise miners.

Business Times

THE mining industry is on the right path and has made significant progress towards attaining a US$12 billion industry by 2023, with key contributors making huge strides in the production matrix.

Government envisages a US$12 billion mining industry by 2023 with gold, platinum group metals, hydrocarbons like oil and gas, coal, gold, lithium, chrome and ferrochrome driving the growth.

The thrust will be characterised by optimum investment and output levels in all minerals.

In an interview on the sidelines of the ongoing annual mining indaba hosted by the Chamber of Mines here, Mines and Mining Development Minister Winston Chitando said all key sectors had made significant progress in production.

“We are quite advanced towards achievement of the US$12 billion mining industry by 2023 and we are really on track towards the target in terms of major contributors. All that is going to be discussed for review at the conference which is going to be officially opened by His Excellency President Mnangagwa,” said Minister Chitando.

He said there are huge developments in the gold sector with many projects underway such as Caledonia which signed an agreement with Government to produce over 15 tonnes of gold by 2030, while Eureka, and Shamva will be producing over five tonnes.

The 2023 milestones are premised on gold contributing over 100 tonnes, and the small-scale gold producers also have a part to play, said the minister.

The small-scale mining industry is involved in gold, chrome and gemstones production.

On the platinum side, Minister Chitando said Unki Mine, Zimplats and Mimosa are all expanding to increase capacity.

He said there are entrants who will also be making significant developments.

The Zimbabwe Consolidated Diamond Company has so far produced over a million carats of diamonds while other players like Murowa have announced expansion programmes.

There will be new mining developments for diamond mining in Tsholotsho in the next months, Minister Chitando said.

He said ZimAlloys, Zimasco and other upcoming players will be making significant contributions in the ferrochrome sector feeding into the consolidated carbon steel production.

Minister Chitando said the coal industry is poised for huge strides as there is immense capacity by a number of projects which President Mnangagwa toured last year.

He said one of them is Dinson Colliery which recently inaugurated a 150 000 per annum coke production and is working on a second coke battery while civil works have started on the one million tonnes per annum coke battery which will be the biggest in Africa.

The minister said all these projects are ongoing and point to the attainment of a US$12 billion mining industry by 2023.

The mining indaba is being held under the theme: “Navigating turbulent times — Sustaining growth of the mining industry beyond Covid-19.”

An Oil and Gas Symposium with the theme “Revealing Zimbabwe’s Old and Gas potential” was held in the morning followed by a platinum beneficiation symposium in the afternoon.

Minister Chitando said Zimbabwe is poised to be a net exporter of electricity from oil and gas and also have its own platinum refineries.

He said these were the discussions around the two symposiums and “the long and short of a report from an expert is that it is feasible and it makes sense, we will walk together with platinum producers.”

The Chronicle

A Chinese firm, Tsingshan Group, is looking to speed up the setting up of a multi-million dollar Energy Park in Hwange, Matabeleland North Province, which will see the construction one of the biggest coke battery facilities in Africa, Business Times has established.

The energy park in Hwange, which will entail a 1.3m tonne coke battery and a 500 megawatts power station, is expected to play a huge role in supporting Tsingshan’s proposed multi-million carbon steel plant in Mvuma.

The Chinese firm has since completed the construction of a 150 000 tonne coke battery plant while construction of an additional 150 000 tonne coke battery plant has since resumed.

It is understood that before the end of this year, Tsingshan will commence construction of a third 1m tonne per annum coke battery, which will be the biggest in Africa.

“In terms of the project, the three coke battery plants will be housed into an area which will be called the Tsingshan Energy Park, which will house a capacity of 1.3m tonnes of coke production,” Mines and Mining Development minister, Winston Chitando said.

He added: “What will also happen is that in that energy park, it will house a 500 Megawatts (MW) power station and interestingly all that 500 MW power station will be entirely for the use of Tsingshan. The power station will be housed in that Energy Park.

Since the signing of the Memorandum of Understanding (MOU), with the government, Tsingshan has moved with speed to implement its vision in the spirit of the MOU.”

Top executives from the Tsingshan Group are expected to visit Zimbabwe in July for high-level engagements with President Mnangagwa’s government.

A dispute between Zimbabwe’s biggest integrated ferrochrome producer, ZIMASCO and South African firm Portnex International is set to be resolved through an arbitration process, Business Times can report.

The dispute emanated from lease agreement debts running into millions of United States dollars.

Portnex and ZIMASCO, which operates furnaces in Kwekwe, chrome ore claims in Shurugwi, Guinea Fowl, Lalapanzi and Mutorashanga, entered into a five-year US$12m lease deal, which saw the South African firmoperating ZIMASCO’s Western plant in Kwekwe.

In addition to leasing furnaces, ZIMASCO also provided Portnex with support services on a cost recovery basis.

The support services include laboratory, weighing, sizing and crushing, transport, security, and secondary metal recovery.

Also, ZIMASCO, allowed its mining contractors to supply chrome ores from ZIMASCO’s claims to Portnex’s Western plant furnaces.

However, the lease deal expired last year, resulting in ZIMASCO reclaiming its Western Plant operations.

In fact, Portnex stopped operating the plant in 2019, citing operational challenges, before its lease expired in December 2020.

Consequently, there have been disagreements on the amount that Portnex owes ZIMASCO.

Well-placed sources at ZIMASCO told Business Times that a private arbitrator is set to be appointed to resolve the matter.

“There is a continued disagreement on how much Portnex owes Zimasco considering that some of the debts were accrued when the exchange rate was at 1:1. The matter had to be submitted before the courts for arbitration,” one source at ZIMASCO told Business Times.

It is understood that Portnex had intentions to purchase ZIMASCO’s three furnaces at Western plant.

But, due to the acrimonious relationship that existed between the two parties, Zimasco has decided to take back control over its Western operations after the expiry of the lease agreement.

There have also been disputes over the company’s alleged failure to pay rentals to ZIMASCO.

At one time ZIMASCO accused Portnex of having failed to fulfil its obligations under a lease agreement.

Portnex, on the other hand, had felt cheated saying ZIMASCO did not disclose that the company was heading for judicial management, under Reggie Saruchera of Grant Thornton after its indebtedness to banks and creditors shot up to about US$65m in 2015 from US$38m in 2009.

Consequently, ZIMASCO stopped operations in 2015 leading to the switching off of its furnaces at the Kwekwe refinery.

Three of its furnaces were, however, leased to Portnex in a US$12m lease agreement.

In 2018, ZIMASCO however exited from receivership in 2018 after posting a US$160m in turnover and a profit of US$45m.

At one time, the plant had to be shut down after Portnex failed to settle electricity power obligations.

Portnex took the case to the courts.

ZIMASCO is a unit of China’s Sinosteel Corporation.