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Fidelity refinery unbundling just a change in shareholding structure

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Fidelity refinery unbundling just a change in shareholding structure

On the 15th of December, the Reserve Bank of Zimbabwe informed the public that at its meeting on 9 December 2020, the Bank’s Board of Directors resolved to dispose of Tuli Coal (Private) Limited to the government and to unbundle Fidelity Printers and Refiners (Private) Limited (FPR) into two business entities, that is (i) gold refining and (ii) printing and minting.

The unbundling of FPR according to the statement, is designed to partially privatise the gold refining business by allowing private players to acquire a stake therein and in the process secure and endear the private sector’s interests in the production and marketing of gold in Zimbabwe. By being part of the decision-making process on gold trading, it is expected that the gold producers’ compliance levels in the trading of gold will significantly increase.

Accordingly, the Bank shall retain 40% shareholding in FPR and dispose of 60% shareholding to both the large-scale and small-scale gold producers.

Using a three-year average delivery of gold to FPR, the Bank will offer 50% shareholding in FPR to the large scale gold producers, 3% to major FPR gold buying agents and the balance of 7% to the small scale producers through their representative bodies.

Commenting on the development Engineer Sithole – Head Gemologist, (DAI – USAID Invest/ Afghanistan) said this is a positive development that will see the gold buyer conducting profitable business.

“It is good coz it now makes FPR conduct its business in a profitably. Also, now they are able to benchmark their gold prices competitively in line with prevailing market conditions,” Sithole said.

“It creates a laissez-faire system where there is minimal government intervention. It allows FPR to conduct its business operations in a free market. There will be faster decision making processes in line with dynamic Gold prices. Also, it allows FPR to attract investors and wealthy shareholders if it decides to list on the stock market. ASMs stand to benefit as a result of attractive prices. FPR liberatisation will also allow it to find ways of capacitating gold production such as attracting investments in machinery,” he concluded.

Mines and Mining Development Portfolio Committee Chairperson Hon Edmond Mkaratigwa also praised the move saying it promotes business investment in the country.

“The move is good in the sense that it creates a sense of process ownership among the gold sector stakeholders. Effectively that complements the government’s efforts on promotion of business investment in the country. The approach theoretically further taps into existing opportunities that are not being fully utilised hence empowering locals. The question that may arise is whether the idea will be fully implemented and equitably. Safeguards will also need to be put in place to guarantee the security of government interests against the nature of capital which is always to thrive towards acquiring and controlling more stake through which government can become the victim of its future founders if they are irresponsibly avarice,” Hon Mkaratigwa said.

Legendary miner Eng Chris Murove however disagreed that the move was liberalisation of FPR.

“This cannot be ‘liberalisation’ of FPR. This is just a change in shareholding structure, from 100% ownership by the government through RBZ to taking on board other shareholders while reducing government ownership to 40%. It amounts to capital raising by the RBZ through partial privatisation. But then how can the gold buying monopoly be sustained when FPR will now effectively be privatised? The logical step is for government to open up gold buying to other players and remove the FPR monopoly,” Murove concluded.

FPR Monopoly

Fidelity Printers and Refiners the sole buyer and exporter of gold currently enjoys a monopoly in Zimbabwe. The entity currently faces stiff silent competition from illegal buyers who manage to smuggle over US$100million out of the country monthly according to the government.

It remains to be seen if the government will rethink its stance on the monopoly as the governor of the Reserve Bank last year said the monopoly was here to stay. Governor Mangudya was responding to the parliamentary portfolio committee on Mines and Mining Development recommendation to end of Fidelity Printers and Refiners’ monopoly and the liberalisation of the sector to increase export earnings for the country.

ZMF Meet the Minister event 2020 – Key points

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ZMF Meet the Minister event 2020 – Key points

Today is meet the Minister event in Kwekwe where the Mines Minister gets to meet and hear challenges faced by Artisanal and Small-scale miners across the country.

These are the key points that have been raised by several miners whilst awaiting the arrival of the Minister: –

• Formalisation
• Direct competition from Foreigners (Chinese to be precise) If you go to MMD offices whilst being served if they see foreign nationals, they will quickly rush to serve the foreigners whereas it should be first come first serve bases.
• Lack of support from the government
• Lack of support from Financial institutions
• Change of policies chasing away investors
• Lack of Gvt retention on-base minerals

• MMD should also focus on devolution
• Discord between MMD and MOF
• Corruption from MMD officials
• EMA taking time to visit Mines for EIA
• Fidelity should improve on payments

 

ASA exits Bindura Nickel Corporation, Kuvimba takes over

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ASA exits Bindura Nickel Corporation, Kuvimba takes over

ASA Resources has finally exited local nickel producer, Bindura Nickel Corporation (BNC), with local mining entity Sotic International taking up the majority 74,73 percent stake that was held by ASA and its partners, Mwana Africa and Zimnick.

The transaction was concluded on September 22, 2020, and Sotic will hold the BNC shares under the local entity, Kuvimba Mining House (Private) Limited.

“Mwana, Zimnick and Asa Gold hold a combined 74,73 percent of the entire issued share capital of the company. Consequently, the purchaser is now the indirect holder of such shares,” said BNC.

“Based on the market value of the shares of the company on 22 September 2020, the purchase consideration for the shares transferred from Zimnick, Mwana and Asa Gold to Kuvimba Mining House (Private) Limited was $3,48 billion.”

The deal has been long in coming after the initial agreement was made in July last year. This disposal marks the end of a series of attempts by ASA Resources to sell off the nickel producer, which it acquired in 2015.

ASA Resources’ assets in Zimbabwe initially included Bindura Nickel Corporation, Freda Rebecca Gold Mine as well as an agribusiness venture. The ASA group also has copper and diamond operations in Congo and South Africa, respectively, as well as another nickel mine in Botswana and a base metal exploration in the Democratic Republic of Congo (DRC). Throughout 2018, an unnamed third party was said to be a United Kingdom-based nickel producer with complementary interests in Southern Africa.

BNC’s problems worsened around 2017 after allegations of financial impropriety arose around the parent firm’s directors. ASA’s then chairman and CEO Yat Hoi Ning, was sacked from ASA in April 2017 following allegations of fraud, of figures ranging between $4 million and $15 million related to subsidiary gold producer Freda-Rebecca.

Ning was appointed executive chairman of ASA Resources mid-2015 after the rancorous removal of founder and then CEO of Mwana Africa, Kalaa Mpinga.

Also sacked at the time was BNC chairman Yim Kwan and Freda Rebecca financial controller Roy Shum. The ASA Resource group had been struggling to pay creditors when debts fall due, indicative of problems lying deeper than the on-going shareholder spats.

BNC has since halted its smelter construction project and is now completely focusing on the shaft deepening project as the miner aims to boost production in view of an anticipated increase in the global price of nickel.

The wait-and-see attitude on the smelter project is largely hinged on the price of the commodity. For the year to March 2020, BNC’s gross profit increased by seven percent from US$13,7 million in the comparative period last year to US$14,7 million.

The nickel miner said this, to a large extent, is a reflection of the corresponding decrease in the cost of sales. During the period under review, the firm’s balance sheet showed that total equity increased by 10 percent year-on-year.

Non-current liabilities of US$30 million decreased by four percent, mainly due to a decrease in the long-term portion of interest-bearing loans. Current liabilities decreased by 31 percent from US$20,5 million to US$14,2 million, mainly due to a decrease in the short-term portion of interest-bearing loans and related party payables as a result of a write-off.

Current assets decreased by 18 percent, mainly driven by a decrease in trade and other receivables.

Zim Daily

Nothing will stop the US$12bn target

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Nothing will stop the US$12bn target

Covid-19 containment strategies that were activated in different parts of the world have had very little if any effect on Zimbabwe’s march towards the US$12 billion mining industry target, Mines and Mining Development Deputy Minister Hon Polite Kambamura has said.

Minister Kambamura’s remarks come as several sectors of the economy, chief among them tourism, have borne the brunt of world travel restrictions put in place to curb the spread of the Covid-19 pandemic.

Consequently, Zimbabwe is this year poised to lose close to US$1 billion in potential revenue from the tourism sector.

However, Deputy Minister Kambamura said Zimbabwe is well on course towards achieving its 2023 milestone of a US$12 billion mining industry and will not be pointing to this year as an excuse for anything.

“Most of our projects were not affected,” said Deputy Minister Kambamura.

“Yes there were some delays in the shipping of capital equipment for some projects, but these are not a threat to what we are targeting.

“If anything there has been huge progress in our projects this year during the pandemic. Look at examples such as Great Dyke Investment (platinum project) in Darwendale, Shamva Gold Mine reopening and expansion this year, (and) the coal projects which His Excellency (President Mnangagwa) toured in July.

“So the point I am making is that we are on track and we will register even more progress in the coming year because the foundation is now there,” he said.

The mining sector is one of the first sectors which got a Government exemption to continue operations when the Government announced lockdowns in March, albeit under strict Covid-19 mitigatory measures.

This was done as a strategy to make sure that the economy is allowed to continue functioning and supporting the needs of individuals and companies during and beyond the pandemic.

Deputy Minister Kambamura’s assertion is further buttressed by statistics on the country’s export earnings from the Reserve Bank of Zimbabwe (RBZ).

Speaking at this year’s launch of the Chamber of Mines of Zimbabwe 2020 mining sector survey in October, RBZ Governor Dr John Mangudya said mining exports together with diaspora remittances compensated for losses in other sectors.

Mining in particular, Governor Mangudya said, has provided the spine for the country’s exports with its contribution in the period ending September 30 totalling US$2,4 Billion compared to US$2,1 Billion last year.

The strong performance of the mining sector is also credited for the success of the RBZ’s foreign currency auction system which has been credited at bringing the currency stability that the country now enjoys.

“You are doing a fantastic job in mining, you give us hope,” Dr Mangudya told mining executives. Mining grew by 14 percent compared to last year . . .  that’s a significant increase, despite Covid which affected the prices of Chrome.

Coal mining here to stay – Chitando

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Coal mining here to stay – Chitando

Zimbabwe has no plans at all to stop coal mining but instead plans to make the mineral one of the main drivers of the economy, Mines and Mining Development Minister Winston Chitando has said.

Chitando was speaking at Tuesday’s post-cabinet media briefing in Harare.

According to the End Coal organisation, coal is the single biggest contributor to environmental pollution and contributes 46 percent of carbon dioxide emissions worldwide.

It also accounts for 72 percent of global Green House Gases from the electricity sector, one of the major causes of positive climate forcing or global warming.

However, the minister said the country’s carbon emissions were insignificant for the government to consider alternative sources of energy.

“There are plans to have a huge increase in thermal power, and coke oven being established,” said Chitando.

“The plan is to extract our coal; it is for coal to take a key role in the development of our economy.

“If you look at the total carbon emissions of Zimbabwe and you look at what other countries are emitting, we are only emitting a small fraction.

“Even after implementing all our coal projects, we will be emitting a very small insignificant level of carbon emissions.”

Coal mining has been affected by a number of factors in the past decade that include calls for cleaner forms of energy such as solar power, wind farming and where capacity permits nuclear.

Efforts to set up solar farms in the country have been affected by corruption.

Currently, production at Hwange Colliery Company Limited (HCCL) is at 100 000 tonnes per month with projections of up to 200 000 tonnes per month next year, according to Chitando.

New Zimbabwe

Abandoned mines turning into Cemeteries – Parliament

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Abandoned mines turning into Cemeteries – Parliament

Mines Parliamentary Portfolio Committee yesterday summoned the current Mines and Mining Development Minister Winston Chitando to answer questions on the abandonment of rescue efforts at Ran mine in Bindura.

Parliament called on the government to resume rescue efforts at the Ran Mine in Bindura that collapsed two weeks ago. Authorities called off the efforts on December 5th after pulling six miners from the mineshaft, but the Zimbabwe Miners Federation says as many as 40 people could still be trapped.

Parliament’s Mines Committee lead by Hon Edmond Mkaratigwa on Wednesday said it wanted the government to resume searching for miners trapped underground since Nov. 25 when a shaft at the Ran gold mine in Bindura, Mashonaland central.

Lawmakers summoned Winston Chitando, the Minister of Mines and Mining Development, to answer questions about the situation.

There have been no signs of life from the mine, and over the weekend, the government called off the search and rescue mission, deeming it too risky.

Settlement Chikwinya was among lawmakers not happy with the decision.

“Why are we, as nation, quick to condemn (abandon) a shaft of 60 meters?  Are we that much shallow in our engineering approach, that every time there is a mineshaft collapse of 60 meters, we condemn it to be a grave?”

Minister Chitando was non-committal on whether the government would resume the search mission. He said there are many factors affecting the search of the trapped miners.

“Which include but are not limited to our preparedness, equipment, do we have adequate equipment?” he asked.

The government says ten miners were trapped in the cave-in.  The Miners Federation and relatives of missing miners say the number is closer to 40.

The Centre for Natural Resource Governance an NGO that advocates for the good governance of natural resources, particularly minerals – says Chitando must be pushed further.

Henry Nyapokoto, the group’s program manager, said this not the first time that the government has abandoned trapped small-scale miners.

“This has been a huge problem in the gold mining sector especially this year, 2020. Our biggest concern as an organization and as civic society is to have the government as the mining regulator to address the root cause of mining disasters that are claiming lives of artisanal miners,” Nyapokoto said.

There have been at least four fatal mining accidents in Zimbabwe over the past two years.

Most miners in Zimbabwe work for themselves, selling whatever valuable minerals they find to the government. Gold represents Zimbabwe’s biggest foreign exchange earner.

Many miners took up the profession because they have no other way to make a living in Zimbabwe’s moribund economy.

VOA

Gold panning elderly couple marooned by heavy rains

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Gold panning elderly couple marooned by heavy rains

AN elderly couple was Sunday marooned by heavy rains along the Gweru River while panning for gold.

This follows heavy rains that have been pounding the country forcing floods in some areas.

Councillor Willard Moyo in whose area of jurisdiction Gweru River passes through, said they received reports of distress the elderly couple had been left stranded after being marooned by the heavy rains.

“There is an old man and his wife who have been marooned by heavy rains along Gweru River. They have been left stranded at an island after they had gone for gold panning,” Moyo said.

He said hunger has forced hard-pressed locals to take up highly dangerous occupations in order to survive.

“These are some vulnerable members of our society who are forced into gold panning for survival.

“It’s sad that they are now forced to face the vagaries of nature whilst panning for gold. It’s really saddening that people of that age, our senior citizens are left in that state of desperation,” he said without disclosing the exact ages of the stranded couple.

Recently, thunderstorms ripped apart Donsa Primary School in Silobela.

Moyo confirmed the development.

“Heavy rains accompanied with storms which have been pounding our province have left Donsa Primary school with roofs blown off. As the ward councillor for the area in particular and a former student of this school in general, I’m shocked about this incident.

“The natural disaster can’t be blamed on anyone; it’s from God. I am thankful that at least no lives have been lost in this incident.

“I am looking forward to the government and Zibagwe RDC to quickly chip in and assist the school with some roofing material,” he said.

Meanwhile, Kwekwe District Civil Protection Unit has since issued some warning to locals following the dangers posed by rains.

“School buildings and ordinary houses will be at risk. The CPU encourages school authorities to maintain the buildings and inspect the same regularly. In some areas of the Midlands province, school roofs have been blown away,” the CPU said in a statement.

The CPU also warned of impending mining disasters.

“Kwekwe is a mining town and experience has taught us that most mines collapse during this time of the year when it’s raining. Miners are, therefore, urged not to go underground when it’s raining.

“Before going underground, kindly check the strength of the pillars and the underground drainage system.”

Added the CPU, “The season is anticipated to be a normal to above-normal season. Inevitably, rivers and dams will be flooded.

“School authorities are urged to advise pupils not to attempt to cross flooded rivers. Pupils should also avoid swimming in such rivers and dams. Many young innocent souls have in the past been lost due to drowning and crocodile attacks.”

New Zimbabwe

7 Safety Tips to Reduce Mining Accidents

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7 Safety Tips to Reduce Mining Accidents

Working in mining is risky business. Wankie (Hwange) coal mine disaster took place on 6 June 1972 when a series of underground explosions occurred at the Wankie No.2 colliery in Wankie (now known as Hwange) claiming 426 lives. It remains the deadliest mine accident to date in the country’s history.

By Michala Maly

This year mining-related accidents have claimed over 50 lives mainly in the artisanal small-scale mining industry and nothing is yet to happen to try to enforce safety rules. If you’re considering a career in mining, or you are a miner it is crucial that you take the following safety measures to keep your time in the mines as trouble-free as possible.

1. Never Ignore the Danger

The first step toward keeping yourself safe is to be cognizant of the fact that working in mining is hazardous. Accept that the mining industry is inherently filled with danger and stay alert every moment on the job. Watch out for your colleagues as well and never let your guard down. Accidents with major impact can occur in a moment of carelessness.

2. Dangerous Tasks Require Planning and Communication

When planning tasks, don’t think only of completing them as efficiently as possible. Allocate extra time and money for safety requirements. Never compromise the safety of your employees when trying to meet deadlines or to boost the quality of work. All risks should be assessed, including the possibility of accidents. Try to eliminate risks as much as possible. Where a risk still exists, provide your team with clear instructions and educate them on how to mitigate it. If necessary, deal with the danger should it arise.

3. Get Professional Training

All team members should undergo regular safety training. This should not just apply to new team members. Even long-standing employees should be made to attend refresher courses. Safety training sessions that contain theory and practical components can be very helpful. Workers who take on strenuous roles may be sent for health and fitness checks to determine whether they are able to take on the physical demands of their work.

4. Always Wear Safety Equipment

There is a litany of safety equipment that mining workers use for their protection, from helmets to safety glasses and gloves. It is essential that all workers wear the necessary safety equipment at all times. There have been countless stories of workers being saved by helmets, for example.

5. Supervise Your Team

All team members should follow safety instructions with no exceptions. A supervisor must also be diligent about following up and enforcing the rules. Never allow more people to enter a site than are allowed. Supervisors also need to know the whereabouts of all team members throughout each shift. Likewise, all workers should be kept informed about what their fellow team members are doing throughout the day. Never allow any team members to breach the safety rules without a warning or, in the case of repeated disobedience, appropriate consequences.

6. Document Your Safety Procedures

When accidents happen, all team members should know exactly what to do. Safety procedures must be clearly defined. When documenting the safety procedures, describe the various incidents that might occur, what needs to be done and whom to contact. Safety procedures should be displayed prominently in locations that can be easily accessed by team members.

7. Follow the Latest Safety Standards

Ensure all safety equipment is serviced regularly and satisfies all the latest safety standards. Never try to save on safety equipment. If an item no longer complies with the current safety standards, replace it, even if this means increasing expenses or delaying a project. Never allow staff to use outdated safety equipment, even for a short period of time. The number of safety-related incidents in the mining industry is high. Unfortunately, some of the tragedies that have occurred could have been prevented. Don’t repeat the mistakes that have been made by others. While the risks can never be eliminated completely, following the above tips can help significantly

Additional editing by Mining Zimbabwe

Great Dyke platinum venture sells stake to Fossil

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Great Dyke platinum venture sells stake to Fossil

Great Dyke Investments, a Russian-backed project planning to build Zimbabwe’s biggest platinum mine, has sold a 4.4% stake to Fossil Mines as Covid-19-disrupted fundraising for the venture.

Fossil, owned by Zimbabwe’s Obey Chimuka, will invest $30m  in the Darwendale project, through a combination of cash and services, including for engineering, procurement and construction. That leaves tycoon Vitaliy Machitski’s Vi Holding and Zimbabwe’s Landela Mining Venture each with a 47.8% stake. The sale values Great Dyke Investments at $680m.

Great Dyke Investments CEO Alex Ivanov said the coronavirus pandemic has delayed project fundraising, which was originally due to be completed in 2020. Financing of $665m is now expected to be finalised in the first quarter of 2021, Ivanov said in an e-mailed response to questions. The lead arranger for that funding is Cairo-based Afreximbank.

The Darwendale project has the potential to become one of the world’s biggest platinum mines and its development is central to the Zimbabwean government’s plans to reboot a collapsing economy.

Zimbabwe has the world’s third-largest platinum group metal reserves after SA and Russia.

Late former president Robert Mugabe handed the Darwendale concession to Russian investors in 2006 after the government repossessed land from a local unit of Impala Platinum Holdings.

Great Dyke Investments this year was voted the best upcoming mine of 2020.

Bloomberg 

Waste management at the mines

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Waste management at the mines

Mining activities have considerably increased due to notable population growth and worldwide demand for mineral resources.

This increase coincides with a new awareness in which environmental concerns have become a growing challenge for all of the agents within the sector. Several types of waste are generated in the mine with only a few standing out with the largest volume, namely: waste rock, tailings and mine water.

As these are not valuable to the owners of the mine, they may be inappropriately disposed of into the environment, posing a severe threat to therein, particularly affecting both surface and groundwater quality. Most mine waste-related environmental degradation is associated with the leaching of contaminants from overburden dumps and acid mine drainage.

Zimbabwe is associated with a larger number of small scale miners compared to large scale miners. As a result, one will find out that the methods of disposal used are harmful to the environment. Proper waste management can promote the sustainability of nature and the environment. Mine owners are encouraged to consider investing in new sustainable mining methods that minimize waste outputs. It is also important that they be educated or rather enlightened on some of the consequences of poor mining practices.

A clear and direct way of enlightening the miners is to train them and help them acquire skills of handling their waste. Training has proven to be the best way to enhance skills, to this end, BOSHi Safety Africa offers Waste management training and support for the related initiatives.

About BOSHi Safety Africa (BSA)

BOSHi Safety Africa (BSA) is a subsidiary of KEGAN Corporation. Its focus is the Distribution of Solutions that Identify and Protect People, Products and Places. Our Products help Customers increase Safety, Security, Productivity and Performance.

You can visit Boshi Safety Africa at Unit 1 Mallis Court Glenroy Crescent, Glenroy Shopping Centre ZW Harare, Zimbabwe

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