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De Beers raises diamond prices to the highest in years

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De Beers raises diamond prices to the highest in years

De Beers implemented its biggest price increase for diamonds in years as the industry starts bouncing back from the pandemic-induced shutdown.

The world’s biggest diamond producer raised prices by about 5% at its first sale of the year, according to people familiar with the situation who asked not to be identified because the information is private. The increases mostly applied to stones bigger than 1 ct, the people said.
The diamond industry has surprised many by the speed of its recovery after being brought to a complete standstill in the first half of last year. Crucial holiday sales in the US and China were strong, while a shortage of stock held by industry middlemen created strong demand.

De Beers doesn’t publicize price changes, but it’s probably one of the steepest increases since the early part of last decade, the people said. A spokesman for De Beers declined to comment.

There were signs of recovery in the fourth quarter of 2020 as rough-diamond buyers started replenishing stocks to prepare for the industry’s most important selling period: Thanksgiving to the Chinese New Year. De Beers’s business started rebounding, and the Anglo American Plc unit was able to edge prices higher in the last sale of the year in December.

That’s in stark contrast to the industry’s fortunes at the early stages of the pandemic when sales collapsed, and diamond retailers and factories closed. De Beers responded by curtailing production, leading to a tighter supply just as shoppers returned to stores in parts of China and the US.

Bloomberg News

Storm over diamonds

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Storm over diamonds

Diamond producer, Anjin Investments, is in the eye of a storm as it is allegedly not selling its diamonds with the involvement of the Minerals Marketing Corporation of Zimbabwe (MMCZ) since it resumed operations in Marange last year, it has emerged.

MMCZ is Zimbabwe’s exclusive agent for selling and marketing of all minerals except gold.

Anjin is a joint venture between the Chinese military and their Zimbabwean counterparts and is back in Marange after it was asked to stop operation, alongside other producers, in the diamond-rich area in 2016 as the government was harvesting little from the gems.

The failure by Anjin to sell the gems through MMCZ has highlighted long-held fears that the diamond mining companies have been looting resources, depriving the country of meaningful revenue in the form of taxes and dividends in the case of firms jointly held by the government.

Well-placed sources told Business Times this week that there has been no transparency in the handling of diamond proceeds by Anjin, which is one of the diamond mining companies operating in Chiadzwa, a ward in Mutare District.

Most of the country’s diamonds revenues have reportedly been unaccounted for and leakages are said to be rampant, with individuals benefiting at the expense of the nation.

Critics say politicians deliberately allow the looting of diamonds because they personally benefit from the vice.

The suspicion was further heightened after a team of the Joint Operations Command (JOC) visited the miner’s operations together with Zimbabwe Consolidated Diamond Company recently.

Concerns were also raised around the security of diamonds being mined by Anjin.

“Ever since it (Anjin) resumed operations, it has never sold any diamond through MMCZ and this has raised suspicion (that there could be some looting happening there) within the government,” one source said.

He added: “There is disharmony in the government on why Anjin has kept such a huge stockpile of diamonds without selling at a time when the government is in need of revenue.

The issue has been further worsened by the recent report by officials from JOC who visited the Anjin operations who were not satisfied by the security of diamonds at Anjin compared to ZCDC.

It is understood that JOC has since directed Anjin to copy what ZCDC has done in terms of improving their security systems.

This is not the first time that Anjin has been flagged for transparency deficit.

In 2016, former Mines minister Walter Chidakwa said Anjin had failed to produce audited accounts detailing its investment into the mine.

But Anjin general manager Shingi Manyeruke told Business Times the diamond mining company has been conducting its business operations above board and under the oversight of various State Agencies including MMCZ and ZIMRA.

Manyeruke, however, blamed the Covid-19 containment measures taken by various jurisdictions which have made travel difficult for international diamond buyers.

He said there were engagements currently taking place with the government through the MMCZ on how best to sell the diamonds given current business environment constraints.

“The diamond industry is a highly regulated industry. As such all key activities within the diamond value chain activities are done in accordance with both local and international regulations,” Manyeruke told Business Times.

“Anjin has at all times conducted its business operations above board and under the oversight of various State agencies mandated by the government to ensure adherence to set regulations.

“Anjin’s monthly production returns are filed with the Ministry of Mines and Mining Development without fail and on time since resumption of operations.

As for Anjin the situation was further worsened by the fact that the Covid—19 pandemic outbreak in the country occurred at a time the company had just resumed operations after having been out of the industry since 2016.

“With due respect the ‘suspicions’ and ‘outcry’ over the alleged impropriety in selling of Anjin diamonds are therefore without basis and rather out of malice by those behind the false narrative.

”It is also understood that Anjin is mining a concession that still has some outstanding legal issues between the government and Vast Resources, formerly African Consolidated Resources (ACR).

There are also allegations that Anjin got the most lucrative diamond claim (Portal B) in Marange from ZCDC.

ACR still holds a claim of ownership on the concession in question.ACR was persuaded to withdraw the case from the courts and was then promised another concession under a community agreement.

Manyeruke said Anjin was duly licensed by the government to operate in Portal B in terms of the new diamond mining policy adding that it was unfair to drag the diamond producers “into other issues that are purely outside the company’s remit”.

Diamond producers in Marange have in the past been accused of dribbling Treasury.

In 2016, former Finance minister Tendai Biti called the producers a “cabal of looters” for allegedly spiriting away billions from the gems while little was flowing to government’s coffers.

Business Times

Glencore seals Zambia copper sale

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Glencore seals Zambia copper sale

Glencore has agreed to sell its stake in Mopani Copper Mines to the Zambian government for $1.5 billion, but will get just $1 upfront.

Glencore shelved its plans to place the operations under care and maintenance last year after Zambia threatened to revoke its mining licence in April.

Once the deal is complete, Mopani will owe its previous owners $1.5 billion. That will be repaid from sales and profits going forward.

Glencore [JSE:GLN] has agreed to sell its stake in Mopani Copper Mines Plc to the Zambian government for $1.5 billion, but will get just $1 upfront.

Glencore has been in talks with the state about Mopani since last year after the two clashed on the future of the mine, which has been unprofitable for years. Despite the challenges, the operations are a vital employer for Zambia.

Glencore said Tuesday it will receive $1 for the 90 percent holding it owns with Vancouver-based First Quantum Minerals. There has been speculation on how Zambia would pay for the asset after it became the first African country to default on its debt since the onset of the coronavirus pandemic. Zambia’s state-owned ZCCM Investments already owned 10 percent  of Mopani.

Once the deal is complete, Mopani will owe its previous owners $1.5 billion. That will be repaid from sales and profits going forward. Glencore, the world’s biggest commodity trader, will retain offtake rights for Mopani’s copper production until the debt has been paid.

Mopani was once central to Glencore’s plans to turn around its African copper business that’s been dogged by problems in recent years. The company spent billions of dollars to sink new shafts, but the asset has struggled to turn a profit. Still, once fully up and running, the mines should produce about 140 000 tons of copper a year, compared with just 51 000 tons in 2019.

Glencore shelved its plans to place the operations under care and maintenance last year after Zambia threatened to revoke its mining license in April. The government’s strategy is driven by a need to safeguard jobs at the site.

Debt crisis 

Zambia went into arrears in November, after failing to convince bondholders to freeze debt-service payments. Taking on the debt to keep Mopani’s operations running in the key Copperbelt Province before general elections in August could further harm the government’s chances of getting a loan from the International Monetary Fund.

Still, the country will look for partners to help shoulder that burden.

Mines Minister Richard Musukwa said the government has received interest from companies based in Canada, Turkey, Qatar, China and South Africa. Mopani will require about $300 million of investment to complete projects that Glencore had started, he said.

News24.com

Gold buyer wanted for gun crime

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Gold buyer wanted for gun crime

POLICE in Bulawayo are investigating allegations that a local gold buyer pointed a pistol threatening to shoot a man for repossessing a Honda Fit which he had sold to a Filabusi gold miner. The incident allegedly took place on Monday at around 2 PM at Much Binding intersection along Bulawayo-Gwanda road in Worringham.

The accused, of North End suburb in Bulawayo, is still at large.

Bulawayo police spokesperson Inspector Abednico Ncube confirmed the incident.“Police are investigating a case of pointing a firearm by a gold buyer who is well known as Leonard of North End suburb to the complainant who is a male adult aged 34 of Barham Green, Bulawayo, for repossessing his car which he had sold to another man in Filabusi,” said Insp Ncube.

Circumstances, according to police are that the complainant sold his Honda Fit to Moris Manyani Mushipe (36), a gold miner based at Bekezela Township in Filabusi, who failed to fully pay for the car. The complainant then visited Mr Mushipe and repossessed his car. He drove it back to Bulawayo and was being escorted by his friend who was also driving his unregistered Toyota Runx.

“As they approached the Much Binding intersection along Gwanda road at Worringham, the complainant was intercepted by the accused person who was driving a white Toyota GD6 twin cab coming from Bulawayo. The accused person then encroached on their lane to stop the complainant and his friend. The complainant and his friend got off their vehicles and confronted the accused who quickly drew his pistol pointing and threatening to shoot the complainant over why he had re-claimed the Honda Fit,” said Insp Ncube.

The complainant raised his hands to show he was not fighting the accused person. The accused person then jumped into his vehicle and drove back to Bulawayo.

A police report was made at Bulawayo Central Police station.

Insp Ncube said people should respect and comply with the law rather than taking the law into their own hands. He also said those with licensed firearms should use them in line with the conditions of their applications since doing otherwise is an offence.

The Chronicle

Zim faces dry forex year

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Zim faces dry forex year

Zimbabwe should brace for a dry year as the coronavirus pandemic enters its deadliest phase yet, hitting the mining sector, one of the country’s leading forex earners, players in the mining sector warned this week.

They project gold’s export receipts to fall further this year. Last year, earnings fell 16% to US$891.5m from US$1.064.5bn recorded in 2019 due to a decrease in gold deliveries in the country.

This year, miners have predicted a worse year due to lockdowns imposed across the world due to increasing Covid-19 infections.

Chamber of Mines of Zimbabwe CEO Isaac Kwesu said the pandemic was wreaking havoc.

“The Covid-19 pandemic is seriously affecting production in the sense that some miners have remained at home.

So, it’s a gloomy outlook,” Kwesu said.

Gold Miners Association of Zimbabwe CEO Irvine Chinyenze said the gold sector has a gloomy outlook, given the variables on the ground.

“We have the pandemic on one end which is ravaging the length and breadth of Zimbabwe seriously affecting the production as many miners especially small scale are now fearful of the pandemic and no one is in the mines now despite being given essential services status,” Chinyenze told Business Times yesterday.

“There are inconsistencies in terms of applying lockdown regulations as there are some miners whose workers are denied to pass through roadblocks.”

He said the gold sub sector faces delays in payments and there are some “miners who are yet to receive their October payments”.

“With the Covid-19 threat and delays in payment, we expect a gloomy outlook of not reaching 19 tonnes we reached last year, unless there is divine intervention and timeous payment,” he said.

Chinyenze said rains have also affected production as it works against the miners as most holes will be filled with water.

Gold remains the country’s most liquid commodity which can be converted into physical United States dollars and can easily be accounted into the fiscus.

Analysts say the expected drop in the performance of gold this year is a cause for concern for Zimbabwe as the government has identified mining as one of the key drivers of economic recovery, alongside agriculture.

However, they said there was need to plug leakages to ensure the country sells its bullion through proper channels.

The decline comes after another leading forex earner, tobacco, also made a subdued performance during the past year, leaving Zimbabwe on the edge of total economic impulsion due to the rising demand for forex in the economy.

Zimbabwe, analysts say, is in a fix as international lenders, who take a cue from the International Monetary Fund, are not willing to extend credit lines to the country due to its high default rate.

It is understood that the “all weather multi-lending institution” Afreximbank is slowly tightening screws.

With gold and tobacco production plummeting economic analysts predict 2021 to be an even tougher year than last year.

In an emailed response, Reserve Bank of Zimbabwe governor John Mangudya told Business Times gold will remain a key foreign currency generator in the Zimbabwean economy and more will be done this year to ensure the valuable metal performs again, despite a plunge in export receipts.

 

Business Times

Ring-Fence Mineral resource revenue to boost social support

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Ring-Fence Mineral resource revenue to boost social support

Zimbabwe Coalition on Debt and Development (ZIMCODD) has urged the government to ring-fence mineral resource revenue by actively implementing the Sovereign Wealth Fund as one of the measures of boosting safety nets for the vulnerable during disasters such as the COVID-19 pandemic.

ZIMCODD made the call on the back of a positive mining sector performance in 2020, with a growth of 14% compared to 2019, a 12.7 % export upsurge in the same period accounting for 65% total export earnings.

“Expanding the fiscal space to fund a bolder social protection response to COVID-19 without increasing the tax burden on the poor or entrenching heavy indebtedness is a critical challenge for the government. Fiscal space cannot be expanded without adequate policy space.

Zimbabwe is endowed with mineral resources including diamonds, platinum, gold and many others “Bold moves such as implementing the thinking behind the Sovereign Wealth Fund act in order to ring-fence Mineral Revenue under the 12 Billion Mining Industry vision to fund Universal Basic Income are achievable.

“Other possibilities such as the imposition of a Wealth Tax and the removal of harmful corporate
tax incentives could strengthen the fiscal base for the government to fund a more robust social response,” said ZIMCODD.

The tax justice advocacy group said resources announced under various COVID-19 Funds and relief measures have not been accompanied by clear access and distribution mechanisms.

“Greater transparency and accountability around COVID-19 relief funds enhances public trust and participation in collective measures to battle the pandemic,” ZIMCODD said.

The organization further urged the government to prioritize women and young girls as they shoulder a disproportionate burden of the costs of pandemic whilst undertaking the bulk of care-work, child-rearing and food sourcing.

“These barriers can be addressed through a Universal Basic Income approach as well as through the facilitation of women and young girls in decision-making positions. It is therefore a priority to design gender-sensitive programs with mechanisms to ensure that the barriers limiting women and young girl’s access to resources and support are eliminated,” said ZIMCODD.

About ZIMCODD

The Zimbabwe Coalition on Debt and Development (ZIMCODD) is a socio-economic justice coalition established in February 2000 to facilitate citizens` involvement in making public policy more pro-people and pro-poor. ZIMCODD views indebtedness, the unfair global trade regime and lack of democratic people-centred economic governance as root causes of the socio-economic crises in Zimbabwe and the world at large.

263Chat

Iron ore price rallies on record-breaking China steel output

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Iron ore price rallies on record-breaking China steel output

Iron ore prices continued to climb on Monday as data revealed record-breaking steel production numbers in China, which forges more steel than the rest of the world combined.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $174.07 per tonne, setting a new near-decade high.

Year-to-date, the steelmaking raw material has enjoyed 8.5% gains after an 80% rise last year. The benchmark hit an all-time high of $191.70 in February 2011.

The high-grade Brazilian index (65% Fe fines) also advanced to a near record high of $195.30 a tonne, after rising about 78% over the past year.

Iron ore’s stellar run was largely due to the rising industrial demand from China. Last year, the country produced a record 1.05 billion tonnes of steel, a breakthrough as it is the first time the 1 billion mark has been exceeded.

Customs data last week showed that China imported 1.17 billion tonnes of iron ore, beating its previous record of 1.075 billion tonnes in 2017 despite a decline in December shipments.

However, iron ore may lose steam in 2021 on recovering supply from top exporters Australia, Brazil and South Africa, as early signs that Chinese steel output is likely to stabilize this year, according to industry analyst Clyde Russell.

China’s steel demand is likely to rise moderately this year, and probably not by more than the supply of iron ore can keep up with, Russell said.

Mining.com

ZELA Youth Network Champions Child Rights In Mining Sector

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ZELA Youth Network Champions Child Rights In Mining Sector

In a bold call to curb abuse of children in the mining sector, a network of youths has urged parliament to push for progressive laws that promote increased participation of youths in the sector.

In a series of letters to authorities including Parliament, the network advocated for a progressive Mines and Minerals Act which they said will reinforce protection of environmental rights, strengthen education and create opportunities for youths to participate in decision making.

Operating under the banner of the Zimbabwe Environmental Law Association (ZELA) Youth Network, the youths have written to the Environmental Management Agency (EMA) and Zimbabwe Consolidated Diamond Company (ZCDC) on impact of mining on the rights of children.

ZELA Youth Network has also requested that Parliament institutes an inquiry of issue of children’s rights infringement in the mining sector as only ‘isolated cases…are finding their ways into mainstream media and social media.’

“We are hereby calling for Parliament of Zimbabwe to exercise its representative, legislative and oversight functions to conduct inquiry on the issues of children’s rights infringement in the mining sector in Zimbabwe as a whole…to ensure that the rights of children are included in the Mines and Minerals Amendment Bill.

“The Mines and Minerals Parliamentary Portfolio Committee must push for the adoption and implementation of child-sensitive environmental policies in the mining sector towards the realization of Section 73 of the Constitution of Zimbabwe,” the Youth Network said.

“The inclusion of well-versed environmentalists in parliament decision making can help determine the type of development, how best it can be conducted and the extent to which it should be done, improved public and medical health interventions to ensure safety of our children.”

The three separate letters, which this publication has in possession, also amplies an international call to action through a petition calling on the respect of the right to a healthy environment.

‘My Planet My Rights’ is an international petition motivated by ‘millions of children around the world’ suffering violations of their rights ‘to health, food, water, and other rights because of problematic government responses or inaction to environmental degradation and climate change’.

“We recommend that environmental management standards set should consider a child rights
based approach acknowledging dierence between children and adults, to cater for their inclusion
in policy formulation and decision making.

ZELA Youth Network said research has unearthed evidence across the mining value chain of the major issues including reports of sexual exploitation of children, child prostitution, drug and alcohol abuse, children being unable to attend school and environmental degradation that directly impacts children.

“…Mining continues to be a dangerous activity, whether large-scale industrial mining or small-scale artisanal mining.

“Not only are there accidents, but exposure to dust and toxins, along with stress from the working environment or managerial pressures, give rise to a range of diseases that affect both miners and inhabitants of mining host communities.

The youths also called on ZCDC to conduct human rights due diligence on the impact of their mining activities on human rights and environment, with a focus on ‘vulnerable groups like children who are most affected by the negative impacts. ’

263Chat

SA mining dealmaker plots M&A push before retirement

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SA mining dealmaker plots M&A push before retirement

South African mining dealmaker Neal Froneman is considering retiring in two to three years time, but would first like to double the size of Sibanye Stillwater Ltd.

Froneman built Johannesburg-based Sibanye into a company with a market value of more than 182 billion rand ($11.9 billion) by purchasing gold, platinum and palladium mines in southern Africa and the U.S. Now the 61-year-old is looking for acquisitions in battery metals, before handing over to a successor.

“I would like to see the company’s size double to a $20 billion market capitalization plus before I move on,” Froneman said in an interview from his farm in South Africa’s Limpopo province. “Two to three years sounds like a good innings and I think we can deliver quite a lot in terms of our strategy.”

Nicknamed Mr. Fix-It for turning around some of South Africa’ aging gold mines, Froneman has identified opportunities in nickel, copper and lithium and may announce a deal this year. The company is also looking to acquire more gold assets, though high valuations are currently a deterrent, the CEO said.

“M&A is what we are good at,” Froneman said. “We have created value and we are going to continue to create value in the right way at the right time.”

Froneman re-jigged Sibanye’s management structure last year, appointing long-time ally Richard Stewart to a new position as chief operations officer. At 45, Stewart is the youngest member of Sibanye’s executive team, and the geologist helped forge the company’s platinum-group metals businesses.

“Richard and I work well, he is entrepreneurial, he has got a solid technical background but it’s a broader team that impacts our business,” Froneman said. “Richard is certainly one of the potential successors but there are others.”

Stewart might need time to gain executive management experience, according to Mandi Dungwa, an analyst at Kagiso Asset Management Ltd. in Cape Town.

“They are creating quite a large global business, that’s where potentially Richard would fall short,” Dungwa said. “But having a COO position probably gives him that experience and if he is able to do well that would be a good indication to the board. Its like a dress rehearsal for the potential job.”

(By Felix Njini)Bloomberg News

Worker abuse by Chinese nationals anger Miners

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Worker abuse by Chinese nationals anger Miners
  • A Chinese national assaulted and injured a worker with a shovel
  • Miners call for the ejection of Chinese from Small-scale mining
  • The government implored to take action

Matopo Gold Miners Association Chairperson Rev Sifelani Moyo has called on the government to investigate and intervene on issues of abuse and exploitation by Chinese “mining investors” in the country as the allegations pointing the Chinese to exploitation and ill-treatment of workers are increasing every day.

Rudairo Dickson Mapuranga

The call has come after a Chinese national was recorded assaulting an employee at a Chinese-owned mine in Bulawayo. The Chinese national reportedly used a shovel to hit the worker who sustained a deep cut on the arm after the camera was switched off. The incident occurred at Fools Investment in Hopefountain Milling Centre in Bulawayo after the employees asked for their backpays dated March 2020.

Rev Moyo said it was high time the government and law enforcement agencies intervene on the issues of human rights abuses perpetrated in the mining industry.

“We are appealing to relevant authorities as well as law enforcement agencies to intervene on such issues.” Rev Moyo said.

Mineworkers are increasingly being frustrated by the government’s reluctance to look into their pleas.

“Our Government has been too silent and complacent in handling these Chinese. Remember that one who shot an employee last year?  We don’t even know how the story ended.” One mineworker said.

Zimbabwe Diamonds and Allied Worker’s Union (ZDAMWU) General Secretary Mr. Justice Chinhema had no kind words with most Chinese investors who he regarded as thugs with no moral campus with their fellow beings.

The ZDAMWU General Secretary said those who are found on the wrong side of the law should be deported and lose their investments in the country because they are directly suffocating the gains of the people’s liberation movements which saw the country gaining independence from white minority rule.

“If the freedom fighters went to war to fight for freedom, fight against abuse like what we are seeing today perpetrated by Chinese nationals on workers, then it means another war to liberate mine workers against abuses is inevitable.

“We are just being told by these thugs that we are now in charge.

“ZDAMWU is now mobilizing workers all its structures to defend themselves from such abuses,” he said.

Chairperson of the Parliamentary Portfolio on Mines and Mining Development Hon Edmund Mkaratigwa said it was heartbreaking to hear stories of nationals being treated in a colonial manner. However, he advised Zimbabweans not to treat cases with a racial eye as this would affect others who have good moral standards.

“The Government of Zimbabwe already has legislation in place with regards to industrial labour relations in our industries. The challenge is you can not judge the book by its colour but only through its contents/actions, like in this case we need to be cautious and be non-racist, but embrace humans with the dignity each deserves. Each case has to be treated as proven law and dealt with in accordance with the laws of this land. If that’s true, its heart wrecking to see a fellow Zimbabwean treated in a colonial manner, we deserve better and the law must take its course. Thank you for letting us know this other case among many.” he said.

Miners platforms had miners seething with anger with many calling for retaliation and ejection of Chinese nationals from the small-scale mining industry for the unacceptable behaviour.

Last year a Gweru based Chinese mine manager shot a worker after a misunderstanding over outstanding salaries. This triggered anger in the country with many calling for Chinese removal from the ASM industry.

The President of the Zimbabwe Miners Federation (ZMF) Ms. Henrietta Rushwaya then met with the Chinese Ambassador to raise concerns of rampant worker abuse which she called unacceptable behaviour. To date, the ZMF has remained mum over the latest incident raising the question of who is exactly currently at the helm of the organisation as usually with ASM’s issues Rushwaya would have responded and taken action already.

See video HERE

 

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