Mining ZimbabweLatest Mining News, Policy and Industry Updates

ZIMBABWE is targeting to grow diamond production from 3,5 million to 12 million carats by 2025, Mines Minister Winston Chitando has said.

Before Zimbabwe attains such lofty output it has to achieve an ambitious but achievable target of growing the diamond sector to a US$1 billion industry.

Government has grand vision of expanding the mining industry from being a US$3,4 billion sector presently to a US$12 billion industry by 2023, of which diamond should account for nearly a tenth.

In terms the grand plan, gold, Zimbabwe’s single biggest mineral export, will generate US$4 billion in four years (2023) time while platinum would bring in another US$3 billion as a raft of projects come on stream.

Minister Chitando was speaking during the official reopening of Anjin Diamond Mine in Chiadzwa, Manicaland Province, in the eastern highlands of Zimbabwe a few days.

The visit and tour of the diamond mine included several high ranking Government officials chief among them President Mnangagwa and his second in command; Vice-President Constantino Chiwenga.

In his official remarks, President Mnangagwa exhorted management and workers in diamond mining, through Minister Chitando, to shun corruption and unhealthy corruption, which he said will not be tolerated regardless of the culprit. “Diamonds are not heavy; one does not shed any sweat if carrying some, they just walk freely as if they are not carrying anything.

“I told Minister Chitando and VP Chiwenga, who is in charge of economic ministries, to say please no tolerance to corruption.

“It does not matter who it is; from managers to general workers, we say no tolerance to incidents of corruption,” he said.

VP Chiwenga said diamond mining will play a key role in national economic transformation through jobs, local sales and exports.

Anjin has resumed operations following nearly 5 year-long hiatus that came after consolidation of all diamond firms in the sector, including private entities, into a single state company over lack of transparency.

The Mines Minister said diamond production was part of four key pillars meant to support growth of diamond mining in Zimbabwe, as Zimbabwe bids to achieve middle-income status by 2030.

“And this official reopening of Anjin operations in Chiadzwa are part of that journey, to achieve 10 million carats in 2023, peaking at 12 million carats 2025,” Minister Chitando said.

Minister Chitando said the third important pillar of the diamond policy was the marketing, which envisages setting up of diamond cleaning and sorting facility.

The last and fourth key pillar of the diamond policy, Minister Chitando said, was value addition and entails establishment of a gemmology centre in Mutare.

As of February 2014, the Chiadzwa diamond fields were operated by seven private entities all of which entered 50-50 partnership with the Zimbabwe government under the umbrella of Zimbabwe Mining Development Corporation (ZMDC).

The Chronicle

…as the company eyes premium glass, ceramic markets

African lithium developer, Prospect Resources, has said its lithium to iron ratio is suitable for the premium glass and ceramics market, in a major boost for the company.

There are few mines in the world able to supply the premium-priced, ultra-low iron, and the technical market for spodumene or petalite, the company said.

Prospect said the result places Arcadia’s spodumene as one of the lowest iron products in the world comparable to Talison Lithium’s Greenbushes mine.

This not only places Arcadia’s spodumene as a premium product for the chemical market but presents an opportunity to sell an ultra-low iron spodumene and petalite blended product into the glass and ceramics market, the company said.

“We expect this blended product will achieve a premium price in the market because we can design the blend for each customer depending on their required lithium to iron ratio and therefore supply a finished product,” Prospect Resources managing director Sam Hosack said.

“The opportunity for Prospect to produce a technical grade ultra-low iron blended product of Arcadia spodumene and petalite has the potential to deliver a fit for purpose product for glass ceramics customers and achieve higher sales prices across.”

Hosack said the company expects such a move should provide a positive economic uplift, compared to simply selling the Arcadia spodumene to the chemical market.

He said Arcadia is unique in having the only joint ore reserve committee compliant lithium pegmatite in the world able to produce ultra-low iron spodumene, petalite and tantalum products.

In the outlook, Hosack said the focus will now be on understanding the positive impact on the mine’s economics, the subsequent increase in revenue, upgrade to the ore reserve and a potential increase in mine life.

A metallurgical test work programme involving preflotation of Spodumene ahead of Petalite flotation was carried out in June 2020 by an independent specialist company in Germany.

The petalite and spodumene concentrates generated from this test work were subsequently subjected to a magnetic separation step in order to reduce the residual consistent with Arcadia flow sheet, the company said.

Prospect Resources is a battery minerals company with a focus on lithium in and around Zimbabwe, with the flagship project being the 87% owned Arcadia Lithium project, located on the outskirts of Harare in Zimbabwe_Business Times

Zimbabwe’s gold export earnings were US$476.2m during the first half-year of 2020 from US$464m earned during the same period last year after deliveries improved on the back of increased foreign currency retention to 70%.

The retention was 55%. The increased exports come at a time when the economy is grappling with foreign currency challenges and is banking on gold and tobacco receipts.

This comes as Zimbabwe’s golden leaf’s export receipts have gone up 4% to US$261m after selling 78.3m kg as on July 8, 2020, from US$250m earned during the same period last year.

Cumulatively the country’s gold and tobacco export receipts were 3% up to US$737.2m during the first half of 2020 from US$714m grossed during the first six months of 2019.

These are the country’s highestforeign earners and account close to 50% of the country’s earnings.

Tobacco exports usually peak after the tobacco selling season has ended. Zimbabwe’s gold exports were up in January, May, and June with the rest of the months down during February, March, and April due to lockdown restrictions which limited artisanal miners to operate.

The government has increased fuel allocations to gold miners from last year but the lockdown and the effects of coronavirus have thwarted miners to get useful consumables from China.

Experts say gold mining especially, especially small scale, was greatly affected by lockdown regulations as social distancing needs to be observed.

The yellow metal is now the highest forex earner and contributes 38% of the country’s total earnings and more than 60% to themining sector which is the highest forex earning sector in the country.

In an emailed response Reserve Bank of Zimbabwe governor, John Mangudya, told this publication that the country’s gold export earnings were pushed by May and June earnings thanks to 70% forex retention threshold.

“The country’s export earnings have gone up 2,6% to US$476.2m from January 2020 to June 2020 from US$464m earned during the same period last year due to the review of foreign currency retention threshold and increased fuel allocations this year,” Mangudya said.

In January, export earnings were US$98m from US$70.4m last year, while in February export earnings were US$56.1m from US$77.8m.

In March, the yellow metal export receipts were US$71.9m from US$88m in the same period last year.

April exports were down to US$63.4m from US$76.4m. In May, gold export receipts were up to US$120m from US$85.8m realised in the same month last year.

Receipts in June were US$66.4m up from US$65.4m in the same period last year. Gold deliveries were down 13% to 10.597 tonnes in the first six months of 2020 from 12,294 tonnes achieved in the same period last year as the sector takes a hit from foreign currency constraints and Covid-19 restrictions which affected small scale producers.

Mines and Mining Development minister Winston Chitando said Covid-19 has affected the operations and a plan needs to be worked out to ensure miners recover from the big slump.

Last year, gold export receipts slumped 28% to US$946m in 2019 from US$1,33bn in 2018, leaving the country with no alternatives for foreign currency as the second-highest forex earner tobacco also tumbled 7% to US$846.7m from US$907.8m due to prolonged droughts and unfavourable payment policies.

Cumulative gold deliveries fell 16% to 27.6 tonnes in 2019 from 33.2 tonnes in 2018 due to suspected smuggling and hostile mining policies.

Experts said the underperforming of the small scale sector was due to unfavourable mining policies where the retention threshold was 55% against 70% in 2018.

Since 2017, the economy has been grappling with foreign shortages, inefficient mining and processing technologies but the reduction of the forex retention levels by the Reserve Bank of Zimbabwe is believed to have impacted negatively on the deliveries.

This has created arbitrage opportunities for miners to smuggle gold outside the country’s borders.

Over 34 tonnes are believed to have been smuggled out of Zimbabwe. Gold Miners Association of Zimbabwe chief executive Irvine Chinyenze said Covid-19 has negatively impacted gold production.

“By far Covid-19 has negatively affected our operations as small scale miners struggle to procure crucial raw materials and restrictions in movements across the country as authorities tighten lockdown measures,” Chinyenze said.

He said the underlying problems of forex retention continue to affect production as miners look for alternative markets.

Some miners, especially large scale, are believed to be selling their gold to suspected smugglers to get more forex for their operations.

Experts suggested that established mining companies with huge capital have dominated this year’s deliveries due to lack of movement from the small scale miners.

Zimbabwe is targeting 100 tonnes of gold per year by 2023, a figure which is expected to help the sector to earn US$12bn yearly and only if the forex retention threshold, fundamentals, and funding issues are addressed.

Gold is expected to lead the charge with US$4bn_Business Times

Speaker of Parliament Jacob Mudenda has chided the Ministry of Mines for its continued reliance on old topographical maps when an investment of US$20 million could cover comprehensive exploration.

Mudenda says Zimbabwe should domesticate the African Mining Vision, a pan African blueprint which guidance on how economies can leverage mineral resource endowment and translate into sustainable economic development.

The AMV highlights

“AMV highlights that most African countries lack basic geological mapping and are poorly mapped.

“Ministry continues to rely on old topographical maps in the issuance of mining claims. Those maps are really antiquated, some of these maps are barely visible hence the need for the Min of Finance need to sponsor the completion of the mining cadastre system.

“This system would not cost more than 20 million USD, we can make savings and ensure the ministry if operational as far as the cadastre.

“It is imperative that we know the minerals that we have especially along the great dyke this is important in signing of agreement without which the country could be prejudiced,” he said.

Mudenda said Zimbabwe was almost duped into a predatory arrangement for the Zimbabwe Iron and Steel Company (ZISCO) which could have prejudiced the country millions in revenue from its iron ore.

He said during the Government of National Unity (GNU) the country almost entered into this misdirected investment because there was not enough geological information on the minerals.

Mudenda said the country should make use of its institutions of higher learning to launch an accelerated exploitation of minerals, with a balance for protection of the environment and economic benet.

“ZISCO during the GNU we signed some agreements only to realize that we had sold tonnes and tonnes of our minerals to this company, there was a lot of fanfare in the launch of that misdirected investment arrangement because we had not done our due diligence.

“The Ministry of Mines should engage UZ to leverage on its ICT for accelerated exploration of our minerals.

“We must now comply with the best international practices to achieve a comparative and competitive advantage. We must strive for that balance between protection of the environment and economic benet,” said Mudenda.

Ministry of Mines says it has purchased hardware for the establishment of a cadastre system to digitalize the record of its mining claims in conjunction with the Ministry of Higher at a lower costs and cheaper running costs on a year to year basis but civic society is uncertain.

Zimbabwe Environmental Law Association (ZELA) director Mutuso Dhliwayo expressed skepticism of these government plans saying only tangible action on the ground can be assessed rather than mere pronouncements.

He said the country has already been mining its minerals without proper records of mining titles which can be easily done through the cadastre system to ensure that we derive full value from our mineral endowment.

“We are already mining already but we have not done comprehensive exploration but it’s critical in terms of access of information which will help us in terms of negotiation of these mining contracts and deals but we are not doing that.

“We also have the cadastre system which is critical any country that has succeeded in terms of getting benefits from its exploration of its minerals has a cadastre system and we don’t have that.

“We need action to follow through with action rather than mere pronouncements,” said Dhliwayo.

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