Mining ZimbabweLatest Mining News, Policy and Industry Updates

Bravura Zimbabwe, which is exploring for platinum in the Serui concession in Selous, Mashonaland West Province, has agreed to help the government pay a US$15m settlement to South African-based Amari Platinum, the previous holder of the concession who has battled the government in international courts, it has been learnt.

Bravura is owned by the Nigerian billionaire, Benedict Peters.

In 2011, the Ministry of Mines and Mining Development cancelled Amari’s right to operate the Serui concession after the company had spent millions of dollars exploring it and identifying an economically viable resource of 18 million ounces of platinum.

Bravura Zimbabwe (Pvt) Limited then signed a platinum mining project agreement with the Government of Zimbabwe  in 2019 at a function that was presided over by President  Emmerson Mnangagwa

Amari, which had signed a joint venture agreement with the State-owned Zimbabwe Mining Development Corporation, initially sued for $500m.

But after years of litigation, Amari has now settled for $15m, government sources said.

It is understood that President Mnangagwa’s administration approached Bravura, the new holders of the Serui concession, to pay the settlement.

“Bravura will pay the money to the government, which will settle with Amari. But the payment is conditional on Bravura finishing its exploration and quantifying the economic resource,” a government source who is privy to the agreement said.

The agreement could help end the long running dispute between Zimbabwe and Amari, which had further damaged the country’s image abroad as a violator of property rights.

Mines Minister Winston Chitando and Bravura’s country manager Lionel Mhlanga did not immediately respond to questions sent to them.

In November last year, Bravura said it had raised US$1bn to develop its platinum mine and then set an ambitious target to start mine construction within 18 months.

Some industry experts, however, remain skeptical about Bravura’s mining credentials as the company has no expertise in platinum mining.

Moreover, developing the mine will be no easy task. The platinum group metals deposits at Hartley have in the past proved too complex to mine, even for experienced miners.

Despite his financial acumen in Africa, Peters was forced to flee his native Nigeria and now lives in Ghana after reports of his improper financial conduct emerged in Africa’s populous country.

Last month, Nigeria’s Centre for Social Justice, Equity And Transparency (CESJET) asked the country’s Economic and Financial Crimes Commission (EFCC) to arrest and prosecute Peters over allegations bordering on conspiracy, fraud, tax evasion, corruption and money laundering.

Peters, who is chairman of the Aiteo Group of Companies, the largest domestic oil producer in Nigeria, denies the charges and alleges a political plot by his rivals.

Peters’ Aiteo was investigated on charges relating to asset transfers by EFCC and was cleared in 2017.

That same year, a court also cleared Peters on allegations of bribery and money laundering.

He won a court order in 2018 to have the EFCC remove his name from a ‘wanted list’.

His entrance into Zimbabwe’s mining sector comes at a critical time when the country is in desperate need of foreign investment to stem decades of economic decay. Some experts, who spoke to this publication this week, hope his fraud and corruption allegations will not follow him to Zimbabwe.

Zimbabwe’s frantic crave for foreign investment has often exposed the country to dubious investors who manipulate political connections to secure mining concessions for speculative purposes, analysts said.

“After the fraud and corruption allegations in Nigeria, the first test in Zimbabwe would be if he can honour the deal to settle Amari. From there, he would need to quickly move into production if he is to establish himself as a serious investor in Zimbabwe. In the last few years, we have seen just too many speculative investors, some using political connections to plunder our resources,” a local mining consultant who preferred  anonymity said.

Government recently announced that it was in the process of repossessing at least 213 mining concessions that are lying idle because they were being used for speculative purposes.

Zimbabwe has the second largest known reserves of platinum group metals after South Africa but new investments into the sector have been hamstrung largely by corruption and inconsistent policies.

Business Times

Zimbabwe Prospectors Association (ZPA) will engage with the Minister of Mines and Mining Development Hon Winston Chitando on issues of development and growth of the mining industry to achieve the President’s US$12 Billion mining target by 2023.

Rudairo Mapuranga

Speaking at Zimbabwe Miners Federation (ZMF) AND approved prospectors Breakfast meeting held in Msasa on Wednesday, ZPA Secretary-General Mr. Timothy Chizuzu said it was of importance for prospectors to meet and engage the minister with regards to the challenges faced by prospectors which are usually a creation of the Mines Ministry officials.

The ZPA Secretary-General said engaging the Minister in a civilized matter was important to address issues affecting miners and prospectors as this would result in the sharing of ideas to solve the problem.

“On issues of development, we need to engage than being radical because solving a problem needs sharing of ideas,” Chizuzu said.

Speaking at the same event ZPA chairperson Mr. Frank Chatyoka said meeting the Minister was important for prospectors as this will help them register their concerns with the Minister regarding the Mines and Mineral bill.

“We just want to register our concerns on the bill and to share notes on the concerns of prospectors regarding the bill,” Said Chatyoka.

The meeting will be done prior to the proposed all stakeholder’s consultation regarding the bill, the Parliamentary portfolio committee on mines chairperson Edmond Mukaratigwa has repeatedly said that after the bill has been finalized it would be subjected to stakeholder scrutiny, through public consultations.

The call by prospectors to engage the Minister was applauded by ZMF President Ms. Henrietta Rushwaya saying that it was important for stakeholders to come up with solutions to the Minister that the US$12 BILLION target can be achieved.

“The next meeting, we will be with the Minister, let us provide solutions than to always cry and criticize,” Rushwaya said.

The initial Mines and Minerals Amendment Bill was passed by Parliament, but President Mnangagwa declined to assent it and referred it back to Parliament.

The signing of the bill into law is seen by experts as critical to the attainment of the US$12 billion annual revenue by 2023.

Minister Chitando recently said that the mining sector is on track to meet the target and the ministry is presently carrying out an assessment of the performance of the industry since the launch of the roadmap in 2019, which is set to be released at the end of this quarter.

The Zimbabwe Miners Federation (ZMF) President Ms. Henrietta Rushwaya has said foreign investors must leave small-scale mining for the locals and there must be a law that categorises a small-scale miner by possessing 50 or fewer hectares of land.

Shantel T Chisango

Speaking at a peggers meeting held at ZMF headquarters in Msasa, Rushwaya stated that small-scale mining must be categorised by having 50 hectares and below, therefore investors must not be seen going into disputes with locals over land that is 50 hectares and below.

“We would appreciate it if the government sets a law that recognises a small scale miner by possessing 50 hectares or less because we have had challenges of people coming from outside ( foreign investors) but lots of disputes over land that is 50 hectares or less have been recorded,” said Rushwaya.

She added that there is a need to make small-scale mining a preserve for local indigenous Zimbabweans so that we minimise the level of disputes among locals.

During the meeting, Rushwaya said the small-scale miner is not in the Mines and Mineral Act, when the law was implemented it did not involve small-scale miner, so whatever Rural District Councils (RDC) and the Mines Ministry propose or say, it will be addressing mining in general.

She, therefore, proposed that the constitution must be amended with regard to the small-scale miner and that the law must include a small-scale miner in the Constitution which will make it easier to address the challenges being faced by small-scale miners.
She stated that when small-scale miners come with challenges to the government they are not quickly addressed because they are not in the constitute, hence the need to include them in the Mines and Mineral Act.

The meeting was attended by the president of Zimbabwe Prospectors Association (ZPA) Mr. Frank Chatyoka and his executive board members, and peggers from Mashonaland West, Mashonaland East, and also from Harare.

Zimbabwe’s multi-billion-dollar mining sector has been granted the nod to pay part of their royalties, taxes and rural district council levies in local currency in a major boost for the capital intensive sector.

The sector contributes over 60% of the country’s export receipts which is used to oil the economy through the importation of raw materials for production and drugs.

Large scale miners retain 60% of their export proceeds which are treated as free funds and cannot be liquidated with the balance being paid in local currency at the prevailing auction rate.

Local miners, especially large scale miners, who were grappling with tax issues and levies which were too high, said some local authority boards are accepting payment even in local currency.

Royalties are the major tax payment in the mining sector thereby contributing the most significant contribution to revenue going to the state.

Chamber of Mines of Zimbabwe CEO Isaac Kwesu told Business Times that the government has come up with a foreign exchange retention framework that aligns with the statutory obligations.

“Royalty and taxes are now paid in obtaining foreign exchange framework of 60/40, a move which is commendable for miners. Meanwhile, Rural District Councils [RDCs] and Environmental Management Agency [EMA] is now accepting payment in local currency from that last time where they only wanted forex,” Kwesu said, adding that engagements with authorities are ongoing to improve the situation.

“However,  the current position of the RBZ on the issue as announced in the latest Monetary Policy Statement is that in the meantime exporters who have shortfalls in their forex requirements will  be allowed to participate at the auction market,” Kwesu said.

Large miners want the monetary authorities to raise forex retention levels to above 70%.

Kwesu said production levels across the industry would improve if authorities raise the retention levels.

This year, the government lowered  the forex retention threshold to 60% from 70% implemented in July last year to help the importation of critical raw materials.

Fidelity Printers and Refiners general manager Fradreck Kunaka recently told this publication that taxes and levies are affecting the mining sector.

“Royalties are a hindrance to the mining sector as they cause miners to look for other alternative markets which do not charge these levies,” Kunaka said.

He said the authorities have improved on payments as they are now doing spot payments in some instances and others who bring the yellow metal will be paid within one working week.

President Emmerson Mnangagwa’s administration is targeting US$12bn export receipts for the mining sector by 2023 anchored on, among others, effectively pursuing value addition and beneficiation of local minerals such as lithium, nickel, graphite, gold, platinum and chrome.

Gold is expected to lead the charge with US$4bn.

Business Times

New York Stock Exchange listed resources firm, Caledonia Mining Corporation, is targeting more gold claims in Zimbabwe as the resources firm expands its footprint on the local market.

The development comes after Caledonia, which operates Blanket Gold Mine in Gwanda, Matabeleland South Province, secured exclusive rights to explore and acquire the mining claims in the gold rich Connemara North area in the Gweru district as well as Glen Hume claims in the same area.

The Gweru claims cover approximately 350 hectares and are believed to have huge gold deposits.

“(We will also) evaluate further investment opportunities in the gold and precious metals sector in Zimbabwe and in other jurisdictions, with our long-term vision of becoming a mid-tier, multi-asset gold producer,” Steve Curtis, the group chief executive officer of Caledonia, said.

Caledonia has been aggressive looking to expand its mining portfolio. At one time, Caledonia was targeting to acquire some gold assets owned by the Zimbabwe Mining Development Corporation.

Blanket Mine has completed its Central Shaft project, which is expected to increase production, reduce operating costs and increase the flexibility to undertake further exploration and development.

The miner spent about US$67m to complete the project. This was funded through internal cash flow.

Commissioning of the shaft project, which is expected to potentially secure Blanket Mine’s operating future for the next 20 years, is expected before the end of June.

Once Central Shaft is commissioned, the miner expects to increase production to between 61 000 and 67 000 ounces this year. It expects to ramp up production to 80 000 ounces next year.

Caledonia is also planning to construct a 12megawatt solar plant at Blanket Mine.

To fund the project the company issued approximately 600,000 shares to raise $13m before expenses.

The miner expects the new solar plant to provide about 27% of daily electricity to Blanket.

Business Times

Zimbabwe’s gold export receipts have spiked 15% to US$147.3m in February and March this year from US$128m recorded during the comparative period last year on the back of firming international gold prices, latest data has shown.

The importation of United States dollars and raw materials have been much easier this year compared to same period last year when the pandemic was still new and at its peak, given that most countries across the world have relaxed Covid-19 restrictions.

Between February and March last year, world gold prices were above US$55,000 per kilogramme against this year’s prices of above US$60,000 per kg.

In written responses, Reserve Bank of Zimbabwe governor John Mangudya told Business Times that the central bank expects gold exports to continue improving on the back of the end to the rainy season which made mining difficult.

“The country made total gold shipments of US$147.3m between February and March 2021 from US$128m during the same period last year. In February last year the country shipped out gold worth US$56.1m compared to gold worth US$66.1m while in March last year gold export receipts were at US$71.9m against US$81.2m recorded last month,” Mangudya said.

“The increase in gold export shipments is due to improvement in gold deliveries to Fidelity Printers and Refiners as a result of slowing down of rains. The firming of world gold prices could be another reason for the increase.”

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.

Despite, good gold performances in February and March, gold export receipts for the first quarter of 2021 were US$200.4m against  gold shipments of US$226.1m 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.

Zimbabwe is losing between US$1.2bn and US$1.7bn yearly due to smuggling and unfriendly policies such as  high taxes, costs and low retention levels which do not allow miners to produce at a competitive level.

According to the figures obtained from the FPR, from the total of 1.80 tonnes, primary producers hauled 1.13 tonnes which is their highest recorded total while small scale miners recorded 0.67 tonnes in the process.

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 are getting 60%.

From the output of 0.997 tonnes in January 2021, primary producers delivered 0.64 tonnes against small scale who managed 0.355 tonnes.In February 2021, the small scale miners extracted 0.56 tonnes and primary producers delivered 0.61 tonnes.

In the first quarter of 2021, total gold deliveries fell 31% to 3.977 tonnes from the 5.72 tonnes achieved in the same period last year.

From the 3.97 tonnes, small scale delivered 1.58 tonnes while primary producers managed to deliver 2.39 tonnes.

Recently, FPR 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.

He 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 said the quarterly figures would have been two months’ production if fundamentals were addressed.

“Authorities may be happy that there is an improvement but in actual fact if there was full liberalisation of the sector, good forex retention thresholds and competitive prices we could be making over US$100m monthly,” 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 President Emmerson Mnangagwa’s 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 Midlands and Mazowe. The report said the development of the gold sector is crucial if Mnangagwa’s government is to salvage prospects for Zimbabwe’s economic recovery from decades of economic stagnation.

Mining experts warned that the monetary authorities should address fundamentals to reach the 100 tonnes target by 2023.

Business Times

CALEDONIA Mining Corporation says its local gold mining operation, Blanket Mine, “slightly” missed the first quarter production target but remains on track to achieve the 2021 projection of between 61 000 and 67 000oz.

In a trading update for the quarter ended 31 March 2021, Caledonia said traditionally its first quarter gold output tends to be lower but increases in subsequent quarters.

“A total of 13 197oz of gold were produced during the quarter. Caledonia remains on track to hit its production guidance of between 61 000 to 67 000oz for the full year,” it said.

Caledonia chief executive officer, Mr Steve Curtis, said production in the first quarter of 2021 was slightly below target and below the comparable quarter in 2020 although at a level that allows the business to maintain its 2021 production guidance.

“Gold production has often been lower in the first quarter of each year and increases in the following quarters,” he said.
Mr Curtis said the rain season saw unprecedented flooding at the mine, which resulted in several lost shifts during the period.

“These temporary issues have now been rectified and with the Central Shaft now operational, we remain on track to hit our target,” he said.

Meanwhile, Caledonia has announced the increase of its quarterly dividend by nine percent to US$0,12 on each of the company’s shares, which would be paid this month-end.

In January this year, the New York Stock Exchange-listed company paid a previous quarterly dividend of US$0,11.

Caledonia recently announced that it had obtained exclusive rights to explore new gold mining claims in the Connemara North area near Gweru in the Midlands province.

Connemara North is in close proximity to the Glen Hume property, which is also under Caledonia focus consideration. The option was giving Caledonia the right to explore the area for a period of up to 18 months.

The firm hopes to derive favourable outcomes from this effort, which will impact positively on its overall business.

Last year, Caledonia’s total annual haul hit close to 58 000oz. The record haul comes at a time when the Government is pushing for a mining production ramp-up to reach its annual target of US$12 billion total minerals earning by 2023 up from US$2,7 billion in 2017.

The Chronicle