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AngloGold must keep South Africa listing

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AngloGold must keep South Africa listing

AngloGold Ashanti will have to keep trading shares in South Africa to conclude the sale of its last remaining assets in the country to rival Harmony Gold, a government official said on Friday.

The company, which announced the sale of its remaining asset in the home country earlier this year for $300 million, must also keep its headquarters in Johannesburg, the source from the Department of Mineral Resources and Energy told Bloomberg.

AngloGold Ashanti first revealed plans to sell Mponeng, the world’s deepest mine and its last underground operation in South Africa, in May last year.

ANGLOGOLD MUST ALSO KEEP ITS HEADQUARTERS IN JOHANNESBURG, THE DEPARTMENT OF MINERAL RESOURCES AND ENERGY SAID

Harmony Gold expressed interest in the mine and related assets a few months later. The acquisition of AngloGold’s operations in South Africa, it said at the time, would help it sustain growth and replace capacity coming from its Masimong and Unisel mines, which are running out of ore.

The sale would mark AngloGold’s exit from South Africa to focus on more profitable mines in Ghana, Australia and the Americas.

The company, which recently lost Kelvin Dushnisky as chief executive, was born out of the mines bought and built by Anglo American (LON: AAL), the mining mammoth founded by the Oppenheimer family more than a century ago.

End of an era

The company was the dominant gold miner for decades, but progressively became weaker as it closed and sold old mines in South Africa, in favour of offshore investments.

Harmony’s chief executive officer, Peter Steenkamp, has repeatedly said that South Africa is its main investment target.

South Africa’s gold industry, however, continues to face mounting challenges, including geological and safety aspects of extracting ore from the world’s deepest mines.

Harmony is betting on recreating the successful strategy applied after it bought Anglo’s Moab Khotsong mine in 2017. Half of that money has already been paid back, Steenkamp said_Mining.Com

Minerals not benefiting the country, Mtisi

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Minerals not benefiting the country, Mtisi

Mineral resources in Zimbabwe are being lost and not benefiting the country except a few companies and individuals especially in the gold and diamond sectors.

Speaking in an a-no-holds-barred interview with Open Parly ZW, Zimbabwe Environmental Law Association (ZELA) Deputy Director Shamiso Mtisi said that despite the country having a widespread of activities from the gold and the diamond sector, nothing is there to show for it as minerals are lost to alternative markets.

The ZELA Director said that the government is resisting formalisation of the mining sector and its strict regulatory policies have contributed greatly to the loss of minerals to the alternative markets.

Mtisi said instead of the people benefiting from the rich resources the country has, violence, poor roads, poor schools, and health facilities are all that the government and mining companies have rewarded communities with.

“We have a lot of mineral resources being lost and not benefiting the country, except a few companies and individuals especially in the gold and diamond sectors. Until recently, Fidelity Printers has been fiddling with gold prices for a long time and not offering gold miners market price for gold and this drove a lot of the gold into the black market. The Licensing of gold buying agents is questionable.

“At the same time the government is resisting formalising or passing a law to regulate and derive revenues from Artisanal Miners yet there has been an explosion of many people, including youths and women going into artisanal gold mining. Many of them sell their gold to the black market.

“In the diamond sector, Zimbabwe has nothing to show from the Diamond mining activities in Marange for example. The national fiscus is dry, communities are poor, no proper road infrastructure exists in Marange, inadequate schools facilities, and health centers.” Mtisi said.

According to Mtisi, the government has failed to deal with the issues of corruption and violence in the mining sector, therefore, a chief penetrator in making sure that the rewards of the land are never to benefit citizens.

He said that the bad reputation of the government on the international scene has also contributed to buyers from India and the United Arab Emirates taking advantage of the situation and buy our minerals at very low prices for resale at a premium.

Mtisi advised the government to fix the poor image of Marange diamonds by curbing human rights violations, curbing corruption, supporting reforms in the Kimberley process to enable it to investigate cases of human rights abuses in different countries.

“All that we hear on a daily basis are human rights violations and no good news from Marange. It’s sad.  The government has dismally failed. Corruption has flourished.

“As a result, Zimbabwe diamonds are being sold on the cheap markets and are undervalued because buyers from India and Dubai (UAE) are taking advantage of the bad reputation to get cheaper diamonds and resell at a premium. Kimberley Process statistics of diamond production and exports from Zimbabwe show all this I am talking about. So Zimbabwe should fix the poor image of Marange diamonds by curbing human rights violations, curbing corruption, supporting reforms in the Kimberley process to enable it to investigate cases of human rights abuses in different countries,” he said.

Many mining companies are not interested in community development programmes that are sustainable or that bring income. They mostly focus on Corporate Social Responsibility actions and handouts that don’t change lives. However, there are some companies that have made efforts to improve community livelihoods and programmes including ZIMPLATS, MIMOSA, and Murowa among others.

Chinese, Artisanal miners major contributors to depleting the environment

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Chinese, Artisanal miners major contributors to depleting the environment

Zimbabwe Environmental Law Association (ZELA) Deputy Director Shamiso Mtisi speaking in an a-no-holds-barred interview with Open Parly ZW said artisanal miners and Chinese mining operations are at the forefront in damaging the country’s natural environment.

Mtisi said that the Chinese and artisanal gold miners do not rehabilitate the environment after mining although has been a known major contributor to the depletion of natural resources and the environment.

According to Mtisi, the recklessness by the Chinese not to rehabilitate land after mining has caused water pollution, air pollution, land degradation, loss of life and in some cases displacement of communities.

“Mining has been a major contributor to the depletion of natural resources & the environment. Mining activities are encroaching into protected areas and in cases where mining takes place some companies, especially the Chinese & artisanal gold miners do not rehabilitate the environment after mining. This has caused land degradation, water pollution, air pollution, displacement of communities and loss of land” said Mtisi.

The ZELA Deputy Director said it was important for the government to license artisanal miners so that they can be regulated. He said that artisanal miners were important to national development because they contribute over 60 percent of gold deliveries to the country’s sole gold buyer and exporter.

“We need licenced artisanal miners who can mine responsibly and can be regulated. They are important for the economy. If you look at gold production figures for 2019 more than 60% of gold deliveries were from the artisanal and small-scale miners, although the Government does not want to formalize artisanal miners.”

“Government wants their gold, but not interested in regulating their operations-this is an absurdity. So we need artisanal miners to be given permits and required to adopt environmental rehabilitation programmes as is happening with Small Scale miners who now have to adopt Environmental Management Plans with the assistance of the Environmental a Management Agency,” he said.

Mtisi also said that the government should amend the Mines and Minerals Act by including a new class of mining licence or permit for artisanal mining reserved for citizens. Mtisi said that the Environmental Management Agency (EMA) had already developed regulations management plans to be used by artisanal miners. The ZELA Deputy Director elaborated saying that licensed miners can give artisanal miners tributary agreements as a way of regularising them.

“Zimbabwe should amend the Mines and Minerals Act by including a new class of mining licence or permit for artisanal mining reserved for Zimbabweans. This is not new Sierra Leone, Liberia, Philippines and many other countries have such licences. EMA has already developed regulations on environmental management plans which can be used by artisanal miners.

“Alternatively, artisanal mining can be effectively managed through the use of Tributary Agreements where holders of mining licences or companies holding mining claims can enter into agreements with artisanal miners to mine on their land and the artisanal miners pay or share proceeds with the claim owner, and includes some environmental rehabilitation programmes. This model appears to be applied at the Shurugwi Development Association.” the ZELA Deputy Director said.

Zimbabwe Environmental Law Association has a training programme for artisanal miners on mining legislation, safety, health and environmental rights. This covers different parts of the country. The programme includes the provision of mining equipment, mapping of artisanal mining sites in Runde, training on responsible sourcing and business & human rights and registering women groups as legal entities to start artisanal and small scale mining operations.

Chinese mining operations not providing basic PPEs, ZDAWU

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Chinese mining operations not providing basic PPEs, ZDAWU

Zimbabwe Diamond and Allied Worker’s Union (ZDAWU) said Chinese owned mining operations are exposing their workers to Covid-19 because they do not respect or observe the law despite the fact that corona cases are rapidly rising in Zimbabwe.

Through a statement issued by the Union’s General Secretary, ZDAWU Justice Chinhema said Chinese owned mining operations are failing to provide adequate basic PPEs to their workers.

“Chinese owned mining operations do not observe or respect the law. They don’t provide adequate basic PPEs to their workers, no proper ablution facilities and safe water, poor accommodation and staying arrangements, and workers are provided with poor quality face masks made of foil paper” the Union said.

According to the Union, the mines have not done any compulsory COVID-19 testing conflicting the provisions of the law which stipulates that all employees shall undergo testing for COVID-19.

“Most mines have not done any compulsory Covid-19 tests and are relying on temperature checks contrary to the provisions of the law which stipulates that employees shall undergo compulsory Covid-19 testing,” Chinhema said.

ZDAWU also said that small scale and artisanal mining operations are poising a very serious threat to the mining community in as far as the transmission of COVID-19 is concerned as there is no control of the movement of people, no records keeping of visitors, no PPE among other important provisions.

“Small scale mining operations and artisanal mining are a serious risk to communities and the country at large. There is no control on the movement of people from one area to another, one mine to another, no record keeping of any visitors, clients or customers, no provision of PPE, safe water, ablution facilities, no social distancing at all and they stay in crowded makeshift accommodation.” Said ZDAWU.

Due to the limited presence of the law enforcement agents in the areas operated by small scale miners, people tend to carry out unregulated business and activities for example vendors who sell groceries and other wares leading to overcrowding in these areas. These activities are common and rampant in Matebeleland South Province making this province an epicentre of the virus in the Mining Industry. The most affected areas in the mining sector are Filabusi, Silobela, Shurugwi, Mutoko, and Kadoma.

According to ZDAWU, most large scale mining companies have tried their best to put conditions and measures that protect workers from contracting Covid-19 at the workplace but did not put measures and conditions that protect workers from cross transmitting the virus from families and neighbours whom they stay within the compounds.

As the country continues to experience infections and deaths from Covid-19 the mining sector is slowly recording cases of positive infections of COVID -19.

INFECTION STATICS IN MINES TO DATE

CompanyEmployees InfectedProvince
How Mine30Mat South
Hwange1Mat North
Unki51Midlands
ZCDC5Manicaland

As can be seen in the table above, How Mine in Matabeleland South Province has more cases of infection at the time of the production of this report.

However, the seemingly low cases recorded across the mining industry is not a reflection that the pandemic has not affected this sector but rather a result of lack of massive testing of workers by employers as employees were only subjected to temperature test which seems to be common but ineffective.

Covid-19: Mine workers recommend temporary shutdown of Mines

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Covid-19: Mine workers recommend temporary shutdown of Mines

In an attempt to curb the spread of Covid-19 in the Mining sector mine workers under Zimbabwe Diamond and Allied Workers Union (ZDAWU) have recommended temporally shut down of all mines for a period of 1-2 weeks to allow compulsory testing of mine workers and families of workers and massive disinfection of workplaces, compounds, and all areas surrounding mines.

Through a statement issued by ZDAWU General Secretary Justice Chinhema, on Wednesday, the union consulted mine workers and miners to see the temporary closure of the mining sector as a way of curbing the spread of the Coronavirus which has already attacked the mining industry.

“The union after consultation with the general membership in the mining industry recommends the following: Temporally shut down of all mines for a period of 1-2 weeks to allow compulsory testing of mine workers and families of such workers who stay in mine compounds or who have been staying in these compounds.  Massive disinfection of workplaces, compounds, and all areas surrounding the mine,” said Chinhema.

The mineworkers also recommended that a task force responsible for the restriction of the virus in the mining sector be created as a way of building a strong team with different water holding ideas, according to the statement, all major mining stakeholders should be part of this joint task force.

“Compulsory joint task force that includes officials from Chamber of Mines, Zimbabwe Miners Federation, Trade Union (ZDAMWU), Ministry of Mines, Ministry of Labour, National Social Security Scheme (NSSA), Mining Industry Pension Fund (MIPF), Police, National Employment Council (NEC) and all other mining industry stakeholders.” The statement reads in part.

ZDAWU also recommended Covid-19 awareness campaigns to the mining community, the union recommended that all media platforms should be used to spread the dangers of the virus in the mining community.

“Awareness campaigns through the printing of materials, radio shows in all mining communities particularly artisanal mining operated communities.” reads the statement.

The union also recommended the government to go hard on the mining community in making sure that government COVID-19 measures and guidelines are adhered to. It also advised the government to consider giving a COVID-19 allowance to the miners.

1. “Deterrent punitive laws against employers or persons who breach the set down guidelines to prevent Covid-19.

2. Serious enforcement of lockdown regulations by law enforcement agencies (police) in all mining communities

3. As a last resort, the complete shutdown of all mines that violate COVID-19 regulations.

4. Consider a COVID-19 allowance to all mineworkers since the sector was declared an essential service.

5. Strict control measures of movement of people to and from the mining compounds. Strict vetting of visitors or family members who visit workers and where infection occurs contact tracing should be immediately carried out.

6. Ensure that Gold Milling centres adhere to the stipulated restrictions to prevent the spread of Covid-19.” Said Chinhema.

According to Chinhema, the union needs to make a radical approach in dealing with the threats of the pandemic in order to save lives and safeguard the general safety and the health of workers in the mining industry.

Limited flights cause gold late payments

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Limited flights cause gold late payments

Fidelity Printers and Refiners (FPR) General Manager Mr. Fradreck Kunaka has blamed limited flights into the country as the major contributor to late payments and cash shortages from the country’s sole gold buyer and exporter.

According to Kunaka the Covid-19 pandemic has limited incoming and outgoing flights which have made the coming of paper money to Zimbabwe very limited, this has also led the shipping of gold to be slowed thus causing a disruption in cash supply.

“There are cash shortages at Fidelity due to the cash movement disruption brought about by the COVID 19 pandemic this means that flights that ship money to Zimbabwe are now limited,” Kunaka said.

In similar circumstances, South African gold refiner RAND REFINERY has limited shipping gold to London because of a lack of commercial flights, adding to the disruption that’s upending the physical bullion market.

Gold miners have been complaining that late payments are forcing them to halt production whilst waiting for payments which has reduced gold production.

Statistics from FPR show that gold deliveries for the month of July tumbled by a staggering 49,3 percent compared to the same month in 2019 after miners delivered only 1 406 tonnes this July compared to 2 776 tonnes in the same month last year.

 

Alrosa to mine upper levels of International mine

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Alrosa to mine upper levels of International mine

Russian diamond miner Alrosa has received regulatory approval to open up and develop reserves at the upper horizons of the International underground mine.

Alrosa received the approval from Russia’s regulatory body Glavgosexpertiza.

The International underground diamond mine is located 16km south-west of the town of Mirny in Russia.

It produced 2.2 million carats of diamonds last year, contributing 6% of the company’s total output.

According to the company, production from the mine is expected to start in the fourth quarter of this year.

Alrosa noted that the first stage of production suggested mining at the depth of 200m to 560m.

In the second stage, the extraction will be carried from 155m to 200m depth, at the deep horizons of the deposit.

Alrosa First Deputy CEO and COO Igor Sobolev said: “This year we start a planned development of the upper horizons of the Inter underground mine. This project has been included in all production and investment plans and it allows developing all commercial reserves of the deposit in a completely safe way. The company has already built the third, 347.4 m long shaft to extract these reserves.

“The ore from the upper horizons to be received as early as in 4Q 2020 with the capacity gradually increasing in coming years. We expect to mine these reserves for about 10 years”.

In the year 1999, underground mining began at the International kimberlite pipe.

In June this year,  Alrosa announced that operations restarted International mine after it has been suspended for a while as several employees tested positive for Covid-19.

In May, Alrosa had to suspend production at the Aikhal underground mine and the Zarya open pit mine due to the drop in demand and sales caused by the Covid-19 pandemic_Mining Technology

Oil firm licence, permit extended

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Oil firm licence, permit extended

Invictus Energy, the Australian junior mining firm exploring for oil and gas in Muzarabani, says its investment licence has been renewed and the special grant for the prospective area extended by a further three years.

This comes as Invictus Energy is preparing to bring contractors (farm-in partners) on site, possibly early next year to start the process of actual exploration by drilling holes after completing extensive secondary data analysis.

Expectations are that non-binding agreement for the farm-in contract could be in place by end of this year and the binding agreement may be signed sometime next year.

The Australia Stock Exchange (ASX) listed firm said it had received approval from the Zimbabwe Investment and Development Authority (ZIDA) for extension of its investment licence to operate in the country.

ZIDA is the country’s premier investment promotion body set up by Government to promote and facilitate both foreign direct investment (FDI) and local investment in Zimbabwe.

“The investment licence provides formal recognition of the company as a foreign investor in the country and enables it access to a range of fiscal benefits and incentives,” Invictus said.

Geo Associates, the company’s 80 percent owned subsidiary and holder of Special Grant 4571, said it had received notification that its application to extend the tenure of the special grant licence for Muzarabani by a further three years has been granted.

Invictus, however, said this was subject to Geo Associates appearing before Zimbabwe’s Mining Affairs Board to present an overview of the forward work programme.

“The presentation to the Mining Affairs Board by Geo Associates was scheduled for last week, but has been deferred due to Covid-19 and the enforced lockdown in the country.

“As a result of the meeting being deferred, the Mining Affairs Board has requested a soft copy of the presentation and confirmed that the formal presentation will occur at a future date,” said Invictus.

Invictus said Geo Associates had confirmed that the soft copy presentation had been lodged with the Mining Affairs Board and that the company had fulfilled all of its work commitments for its first three-year exploration period.

“A comprehensive work programme has been proposed for the second three-year exploration period, including a commitment to drill a minimum of one exploration well. The company will provide further updates as appropriate,” Invictus said.

The ASX listed oil and gas company said this week it had issued 11.8 million Class A and Class B shares to directors Scott MacMillan and Stuart Lake, subject to shareholder approval and attainment of key performance milestones.

Invictus said that it was at an important stage of development with significant opportunities and challenges in both the near and long-term and the proposed issue seeks to align the efforts of the directors in seeking to achieve growth of the share price and the creation of shareholder value.

Essentially, the performance milestones are defined by agreements for exploration and drilling for oil and gas on the Muzarabani prospect and the firm’s stock reaching a certain level of share price performance.

The successful discovery of oil and gas in the Cahorra Bassa Basin of Muzarabani will be a game-changer for Zimbabwe in terms of job creation, energy self-sufficiency, growth of downstream industries, exports and development.

Invictus is at a stage where it is also in discussions with the Government for production sharing agreement and the crafting of legislation that fills voids in the current petroleums Act.

Oil and gas can be major contributors to national gross domestic product accounting for almost entire national budgets in countries like Angola, Saudi Arabia, Libya, Venezuela, Iran, Iraq and the UAE_Business Weekly

Target incentives for INVICTUS oil project

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Target incentives for INVICTUS oil project

INVICTUS Energy, the Australia listed junior miner developing Zimbabwe’s potential maiden oil and gas mine, has offered two key directors shares to incentivise their performance, as it seeks to navigate an important stage of the Muzarabani project development and growth of the company.

It is expected the successful discovery of oil and gas in the Cahorra Bassa Basin of Muzarabani will be a game-changer for Zimbabwe in terms of job creation, energy self-sufficiency, downstream industries, exports and development of the project area.

Working with Government, Invictus is at a stage where it is also in discussions with the Government for production sharing agreement and the crafting of legislation that fills voids in the current Petroleums Act.

Oil and gas can be major contributors to national gross domestic product accounting for almost the entire national budgets in countries like Angola, Saudi Arabia, Libya, Venezuela, Iran, Iraq and the UAE.

The Australia Stock Exchange (ASX) listed oil and gas company has since issued 11,8 million class A and B shares to directors Scott MacMillan and Stuart Lake, subject to shareholder approval and attainment of key performance milestones.

Invictus said was at an important stage of development with significant opportunities and challenges in both the near and long-term and the proposed issue seeks to align the efforts of the directors in seeking to achieve growth of the share price and the creation of shareholder value.

Essentially, the performance milestones are defined by agreements for exploration and drilling for oil and gas on the Muzarabani prospect and the firm’s stock reaching a certain level of share price performance.

“In addition, the board company also believes that incentivising Mr. Scott Macmillan and Dr. Stuart Lake with Performance Rights is a prudent means of conserving the Company’s available cash reserves.

“The board company believes it is important to offer these performance rights to continue to attract and maintain highly experienced and qualified Board members in a competitive market,” Invictus said.

The issue of the performance rights forms a part of the revised remuneration package agreed with each of Macmillan and Lake.

If shareholder approval for the issue of the performance rights is not obtained, and in the event the milestones are satisfied, the directors will be paid the equivalent value of the shares that would have vested at the point the milestones are met.

For instance,  MacMillan will receive cash payment of US$75 000 cash in lieu of shares for each of the class A and class B shares if the performance milestones are achieved.

“In addition, it has also been agreed that Mr. Macmillan will receive 10 percent of the total costs reimbursed to Invictus for sunk and historical costs, by a reputable partner, in connection with a binding farm-in agreement or non-binding farm-in agreement up to a maximum of US$250 000,” Invictus said.

The performance rewards will fall due upon company announcing the execution of the non-binding farm-in agreement on or before December 31, 2020, and the binding farm-in agreement, having been executed, becomes unconditional on or before June 30, 2021.

Binding farm-in agreement means a legally binding farm-in agreement between the company and a reputable partner in respect of the Cabora Bassa Project, which more fully reflects the terms of the non-Binding farm-in agreement.

The non-binding farm-in agreement” means a non-binding farm-in agreement between the company and a reputable partner, which provides for the indicative commercial terms for a farm-in agreement in respect of the Cabora Bassa Project (Muzarabani) and which provides for a commitment to drill at least one well on its Special Grant Permit 4571.

For Class B Share, the shares will or incentive pay will become vesting upon the company achieving the grant of the extension application on or before December 31, 2020.

With regards share price performance of Class A shares, the rewards will become vesting on the date the company achieves a volume-weighted average price (VWAP) of at least $0,045  (Australian dollar) over any twenty consecutive trading day period before December 31, 2020.

For Class B shares, the rights will take effect upon the company achieving a VWAP of at least $0,045 over any twenty consecutive trading day period before December 31, 2020.

The Cabora Bassa Project encompasses the Mzarabani Prospect, a multi-trillion cubic feet and liquids-rich conventional gas-condensate target, which is potentially the largest, undrilled seismically defined structure onshore Africa_Business Weekly

Cabinet approves fuel partner search

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Cabinet approves fuel partner search

Zimbabwe is seeking an established global petroleum giant to partner the merged entity of three state-owned fuel retailers, Business Weekly can reveal.

Last year, the Cabinet approved the merger of Petrotrade and Genesis, subsidiaries of the National Oil Company into fuel retailing business, as well as CMED Fuels.

Thereafter, the consolidated entity is to be privatised through strategic partnerships.

In a recent update on restructuring of state-owned entities, the Treasury said the identification of a partner has already been approved by Cabinet.

“Already, a proposal towards the identification of a potential strategic player in the petroleum oil industry, has been approved by Cabinet,” said the Treasury.

CBZ and Manokore were initially appointed as transaction advisors. However, the technical committee recommended cancelation of the tender because of the high fees.

Under the proposals, Petrotrade and Genesis Energy, together with CMED’s fuel retail component, will be merged to enhance the resultant entity’s value, attractiveness and competitiveness ahead of negotiations with prospective strategic partners.

Government intends to sell its shareholdings in several entities as it seeks to improve efficiency and lessen spending pressures on the budget. Zimbabwe either partly or wholly owns 92 companies, most of which have been making losses for years largely due to mismanagement. Poor corporate governance has also been partly blamed for keeping potential investors away.

However, Finance and Economic Development Minister professor Mthuli Ncube, recently said the majority of public enterprises are now upholding good corporate governance standards in line with Public Entities Corporate Governance Act.

Citing an unnamed survey, Prof Ncube said 80 percent of public enterprises were now providing annual reports to the shareholder.

Previously, some state-owned companies would take several years without holding annual general meetings or reporting financials. Some of the entities the government is seeking to reduce its stake include telecommunications companies, NetOne, TelOne and Telecel. The Government is seeking equity partners for the national airline, Air Zimbabwe and the Zimbabwe Iron and Steel Company.

 

Business Weekly

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