Mining ZimbabweLatest Mining News, Policy and Industry Updates

LOCAL nickel producer, Bindura Nickel Corporation (BNC), has announced a further extension regarding publication of financial results for the year ended March 31, 2020 by two weeks.

The company was expected to have published the financial statement on July 31 having failed to do so on June 30. BNC is now expected to do so by the 14th of August.

In a notice to shareholders, the nickel miner said failure to publish the results within the set timeframe had been caused by the Covid-19 lockdown and revaluation of the company’s smelter.

“The year-end audit work had been delayed by the lockdowns, which were enacted into law by the Government in March 2020 as a national response to the Covid-19 pandemic.

“As part of the year-end procedures, BNC had to appoint an independent third party to carry out a valuation of the company’s smelter complex,” said the firm.

It said this process could not be completed within the set year-end timelines.

“The company was granted a 30-day extension by the ZSE for the publication of its audited financial results for the year ended 31 March 2020, with the deadline being extended from 30th June to 31st July 2020.

“Subsequent to the foregoing, BNC realised that it would not be able to meet the extended deadline of 31st July 2020. The company then approached the ZSE once more with an application for the extension of time by a further 14 days, to enable it to publish the results by not later than 14th August 2020. The extension was granted,” it said.

Last year, BNC announced the intention to complete its smelter in the 2020 financial year as it shifts focus from shaft deepening project it has commenced.

The nickel miner had halted smelter construction to focus on shaft deepening project to boost production in anticipation of increased global nickel prices.

BNC developed a wait-and-see attitude on the smelter project, mainly hinged on the price of the commodity, a move that made the firm’s management to decelerate the project waiting for higher nickel price levels.

The company’s management has indicated that depressed nickel prices had led to a revision of project priorities as it would not make economic sense to continue injecting huge capital into a smelter whose operations require more capital at hand.

The Chronicle

AN umalayitsha allegedly ganged up with two accomplices and pulled down 640kgs of overhead copper conductors worth more than $200 000 from a Zesa line in Binga resulting in a power blackout in some parts of the district.

They loaded the copper cables into their South African registered Toyota Quantum before the vehicle was intercepted the following day at a fuel queue at Cross Dete leading to the recovery of the loot.

This emerged when Lenos Sithole (41) of Magwegwe North suburb approached the High Court seeking bail pending trial. He is facing charges of cutting and interfering with apparatus for generation, transmission, distribution or supply of electricity in violation of the Electricity Act.

Sithole, through his lawyers Tanaka Law Chambers, filed an application for bail pending trial at the Bulawayo High Court citing the State as respondent.

In his bail statement, Sithole is denying the charges, arguing that there was no evidence linking him to the alleged offence.

Sithole said he was only implicated by one Insurance Nhongo who was arrested at the scene by virtue of being the authorised driver as shown on the vehicle’s temporary import permit (TIP).

“There is no eye witness to state that indeed I travelled to and from Binga in the vehicle in question. I was heavily assaulted by police officers who arrested me while at my home,” he said.

“I met one Insurance Nhongo for the first time in prison and police are misleading the court by stating that I was at Cross Dete and also participated in the alleged crime which took place in Binga as I was never there.”

Sithole said the only thing that links him to the offence is the TIP which is always in his passport as per Zimbabwe Revenue Authority (Zimra) requirements.

“Police officers are only assuming that I was in the vehicle because of the TIP and my passport and nothing else. There was no identification parade, not even a single witness who can safely say I was present at the crime scene save for inadmissible confession from Nhongo,” he argued.

Sithole said there were no compelling reasons warranting his continued detention pending trial.

He said fears by the State that if released on bail, he was likely to abscond due to the gravity of the offence, which attracts a mandatory 10-year prison term upon conviction, were unfounded.

“I was born in this country and have lived in this country for the better part of my life. I do not have the means and ability to escape the jurisdiction beyond the reach of law enforcement agents, and I am of fixed abode,” said Sithole.

He said he is a proper candidate for bail, arguing that the State has no strong case.

Sithole offered to pay $1 000 bail and to report once a week at Bulawayo Central Police Station as well as reside at his given address until the matter is finalised.

Mrs Sifiso Ndlovu-Sibanda who is representing the State, opposed the application, arguing there was overwhelming evidence against Sithole.

She said if released on bail, the applicant was likely to abscond trial.

“In casu, applicant has shown propensity to abscond. He was implicated by his co-accused who has since been convicted. As an indication that applicant is a flight risk upon arrest he fled and was only caught in Bulawayo after several raids,” said Mrs Ndlovu-Sibanda. “Hence it is not bald assertion that applicant will flee as he had already given indications of his intentions. Wherefore, the respondent prays that the application be dismissed.”

According to court papers, on January 10 this year shortly after 7.30pm, Sithole, Nhongo and their accomplices still at large, drove to Binga in a South Africa registered Toyota Quantum. Upon arrival, they allegedly cut overhead copper conductors using a bolt cutter and loaded the cables into their vehicle and drove off.

The following day at around 7.30am, Zesa employees discovered that there was a power outage around Binga area. Upon investigations they discovered that part of the overhead copper conductors had been cut off along a turn off leading to the Binga District Development Fund (DDF) depot.

A report was made to the police and investigations were conducted.

Police intercepted the vehicle at a service station at Cross Dete and Sithole and his other accomplices managed to run away. Nhongo was however, arrested at the scene and 33 rolls of the stolen cables worth $209 717,10 were found in the vehicle.

Nhongo implicated Sithole leading to his arrest at his house in Bulawayo.

The Chronicle

SIX miners, among them a woman, have been arrested for allegedly attacking three police officers and damaging a vehicle they were using in protest to the arrest of their workmate.

Tawanda Msimanga (27), Diana Shoko (37), Muzi Moyo (33), Mehleli Dube (28), Thamsanqa Ndlovu (31) and Lloyd Sithole (28) all from Gwanda were not asked to plead when they appeared before Gwanda magistrate Miss Lerato Nyathi facing a public violence charge. They were remanded in custody to 7 August for trial.

Prosecuting, Miss Faith Mutukwa said the gang blocked the vehicle which the police were using and one of them forcibly took handcuff keys from a police officer and released their workmate who had been arrested in connection with an assault case.

“On 14 June at around 2 pm the accused persons were at Geelong Mine where they work when one of them Tawanda Msimanga proposed love to Ms. Ntokozo Moyo and she turned him down. Msimanga went on to assault Ms Moyo several times and also threatened to kill her. Ms

Moyo then reported the matter to the police who came to attend the scene.

“Constables Mehluli Ncube, Emmanuel Moyo and Ebeny Bhonda proceeded to attend the scene in a vehicle which belongs to a civilian who offered to assist them with transport.

“The cops then apprehended Msimanga and when they were about to leave the rest of the accused persons started shouting at the police officers and ordered them to release Msimanga,” she said.

Miss Mutukwa said the accused persons then blocked the vehicle in order to prevent it from leaving. She said in the process one of the accused persons smashed the rear window of the vehicle and punched Constable Mehluli Moyo who was seated with the accused.

Miss Mutukwa said one of the accused persons forcibly took handcuff keys from Constable Moyo’s shirt and released Msimanga. He went on to smash the windscreen of the car using the pair of handcuffs which had been used on Msimanga.

“Seeing that they couldn’t contain the accused persons the police fled from the scene and hid in the bush and called for backup. A reinforcement team comprising Support Unit members from the West Nicholson Police Station attended the scene and the accused persons were arrested at Colleen Bawn tollgate while travelling in a vehicle they had hired,” she said.

Miss Mutukwa said the value of damaged property is US$387.

Meanwhile, two men have been arrested while their three accomplices are still at large after they ganged up on a man and beat him to death after accusing him of stealing gold ore.

Mpho Moyo (36) and Qhubekani Ndlovu (40) both from Colleen Bawn and their accomplices assaulted Morgan Sibanda before they drowned him in a saline pond while they had tied his hands and legs with a wire.

Moyo and Ndlovu were not asked to plead when they appeared before Gwanda magistrate, Miss Lerato Nyathi facing a murder charge. They were remanded in custody to 7 August.

Prosecuting, Mr Noel Mandebvu said the gang attacked Sibanda on 23 July.

“On 23 July at around 9pm at Sally 22 Mine in Collen Bawn Moyo and Ndlovu together with three other people who are still at large confronted Morgan Sibanda.

“They assaulted him with a hammer mill, fan belts, horse pipe and also punched and kicked him several times.

“They then tied his hands together to the back with a wire and also tied his feet together with a wire. They then drowned him in a saline pond.

“Upon realising that he had passed out the gang dumped Sibanda’s body in a makeshift plastic tent at the mine and fled. Sibanda’s body was later found by some mine workers who reported the matter to the police resulting in the arrest of the accused persons,” he said.

The Chronicle

Some Zimbabwean mining companies have halted expansion projects due to lack of capital with most financiers now demanding offshore collection accounts as guarantor for funding citing high country risk profile, the Chamber of Mines has said.

In the gold sector, investors are insisting on gold output as security for capital, the industry lobby group said in the report, prepared for Government earlier this month.

The sector, expected to underpin Zimbabwe’s economic turnaround, generates about 70 percent of its foreign currency from exports mainly from gold, platinum group metals and ferrochrome.

Zimbabwe owes various international creditors about US$8,3 billion and recently had its appeal for an emergency bailout to the Paris Club rejected for lack of policy reforms.

This week, the Government agreed to pay former white commercial farmers about US$3,5 billion for land improvements, in a move some analysts say may help mend relations between Zimbabwe and the international community.

“Mining companies are struggling to raise capital due to increased country risk,” the Chamber of Mines said.

“This has seen most expansion mining projects put on hold as financiers are demanding offshore collection accounts as guarantor for capital.”

Last year, Zimbabwe launched a roadmap expected to grow the mining industry to US$12
billion by 2023, but critics say the target is unrealistic.

In the petition, mining firms also want foreign currency retention threshold from exports raised to at least 80 percent and to be allowed to keep their excess nostro balances beyond the stipulated 30-day period.

The Chamber of Mines noted the current foreign exchange framework for the industry was characterised by inadequate foreign exchange retentions, uncompetitive price for the surrendered portion and the short 30-day compulsory liquidation of unutilised nostro balances.

Mining firms are allowed to keep up to 55 percent of their foreign currency earnings and the remainder is liquidated in local currency at the official rate.

However, with the introduction of the auction system, companies can voluntarily liquidate their forex.

“Foreign exchange retentions for the mining sector are inadequate to meet regular operational requirements including importation of critical raw material supplies,” said the Chamber of Mines.

“The situation has been exacerbated by requirement to pay for electricity bills, royalty and other taxes in foreign currency which have significantly reduced the effective retention from around 50 percent to around 30 percent.”

The mining board said there was a misalignment between compulsory liquidation of unutilised foreign currency and production cycles of mining companies.

It said the working capital cycle for mining companies average between 60 to 90 days, ordinarily implying that mining companies may require excess balances in their nostro accounts beyond 30-days.

Some mining companies that experienced production disruptions caused by Covid-19 might have seen increase in excess balances in their nostro accounts.

“These balances remain strategic as decoupling cash reserves to augment working capital requirements to meet expansion in capacity utilisation in line with improvement in the Covid-19 situation.

“It is against the above that mining companies are appealing for an upward review in time limit in line with production cycle.

“While we appreciate that the reintroduced auction system may see some mining companies to voluntarily offloading their excess balances, we appeal to the Government to guarantee minimum working capital cycle for sustenance and expansion projects,” said the industry lobby group.

It said gold producers continue facing payment delays for deliveries to Fidelity Printers and Refiners, the sole buyer of the commodity, of up to eight weeks.

This has resulted in working capital shortages and production disruptions, weighing down potential gold output to as much as 25 percent.

Miners are also worried about the “fragile” and “unstable” power supply situation. With production levels expected to increase, demand for power may result in power cuts_Business Weekly

Zimbabwe has granted coal bed methane (CBM) special grants to six investors in Matabeleland North province as it seeks to tap into cleaner fuel for electricity generation, a move which has been cheered by climate advocates who view the development critical in efforts to curb climate change.

Among the companies that have been granted CMB concessions are Tumagole of South Africa, Sakunda Holdings and Shangani Energy Exploration (SEE), which is owned by Chinese steel giant, Sinosteel.

“About six companies have so far been granted licence to explore coal bed and the Lupane, Gwayi and Hwange region could become a major investment attraction in the country,” an official in the Ministry of Mines and Mining Development said, but refused to be identified because he is not allowed to talk to the press.

Zimbabwe is said to have huge deposits of untapped coal bed methane gas in the Hwange, Lupane and Gwayi areas, but their commercial viability has not yet been supported by geological information.

Over the years, drilling and desorption tests have been conducted and resources that run into trillions of cubic feet have been discovered, according to Government’s geological department.

Tumagole indicated that it would invest as much as R55 billion in extracting methane gas in Zimbabwe and was awaiting binding contracts to proceed.

SEE has earmarked US$780 million to build a 600 megawatt power station and petrochemical related industries. Sakunda said it would first seek geological information which would then inform on business they would conduct.

Zimbabwe launched a roadmap that seek to propel the mining sector to a US$12 billion industry by 2023 described by some critics as ambitious and too unrealistic.

Untapped resource

Zimbabwe is currently in the initial production testing of coal bed methane with view of generating power.

In addition to power generation, an integrated petrochemical industry can be established with potential to attract offshore capital and create employment.

Mining analyst have noted there was a lot of work that needs to be done both technically and commercially. Besides, the country still needs to craft a gas policy to regulate the new sector.

“There is gas potential in parts of the Lupane — Hwange basin,” Fred Moyo, a renowned mining engineer and former deputy minister of Mines said.

“We need exploration which is highly technical. The gas policy is also important because investors can’t move without it. Market and infrastructure also need careful assessments. So yes it’s a good sector with good potential but needs to be undertaken carefully from a technical, regulatory and commercial perspective.”

Some local climate advocates cheered the development as a victory for the environment because when used for electricity generation, CBM is much cleaner compared to thermal.

However, there is no real scientific consensus on the environmental impact of coal-bed methane gas. Some say methane has a higher potential of causing climate change while others argue that when burnt to produce electricity, methane is a lot cleaner compared to coal.

Zimbabwe, which currently generates about half of its electricity from coal with a number of thermal projects lined up for implementation, is holding in check the use of coal for power production in line with its pledge to reduce carbon footprint.

Zimbabwe is a signatory to the Paris climate change accord agreed in 2015, which seeks to hold the increase of the global average temperature to below 2 degrees Celsius_Business Weekly