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Zimbabwe Economic Minerals

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ZIMBABWE MAIN ECONOMIC MINERALS

GOLD 

Gold mining and exploration in Zimbabwe has been going on from ancient times and it is estimated that a third (about 700 tonnes) of all historical gold production was mined locally from the seventh century until the introduction of mechanized mining methods with the arrival of Europeans about a century ago. There are over 4000 recorded god deposits, nearly all of them located on ancient workings.

The occurrence of gold in Zimbabwe is mainly confined to hydrothermal vein and shear zone deposits found exclusively in rocks of the Basement Complex age formed 2400 million years or more ago. The only noteworthy production from outside the Zimbabwe craton has been Renco Mine, which is in ancient deformed, high-grade metamorphic rocks of the Archean age North Marginal Zone of the Limpopo Mobile Belt and a number of mines in the Proterozoic Piriwiri Group of metamorphosed argillaceous sedimentary rocks with minor volcanics. Some gold is also recovered as a by-product from copper deposits in the Deweras Group Sediments. The production of alluvial gold, present along all the major rivers draining the greenstone belts, has largely been the domain of illegal gold panners.

SILVER

It occurs as native silver in association with other minerals such as gold, copper and lead. With exception of the Osage Mine in Zimbabwe it is declared as a by products from the mining of platinum, gold and copper.  Gold mines in the Odzi greenstone belt have the highest silver and gold ratios.

PLATINUM GROUP ELEMENTS

Platinum Group Metals (PGMs) consist of platinum, palladium, rhodium, ruthenium, iridium and osmium and have a high demand worldwide because of their wide variety of uses in industry. Zimbabwe’s Great Dyke, a linear early Proterozoic layered mafic-ultramafic intrusion trending over 550km at a maximum width of about 11kilometres, has the second largest platinum reserves in the world after the Bushveld Complex in South Africa. An estimate of 2.8 billion tonnes PGM ore at 4g/t are estimated to lounge on the Dyke.  Notably, PGMs are mined as primary metals only in the Bushveld in South Africa and along the Great Dyke in Zimbabwe.

 

The occurrence of PGE mineralization in the Great Dyke was recorded in the early 1920s. Following these documentations and the discovery of PGMs in the Merensky Reef of the Bushveld Complex of South Africa, there was a boom in PGM prospecting between 1925 and 1926 that resulted in the discovery of Wedza Mine. Since the 1950s, several companies have undertaken exploration. Currently platinum exploration on the Great Dyke has been carried out by CAMEC (Todal Mining) in the Bougai section in Shurugwi, and Global Platinum Resources in Chegutu.

Mining is currently being carried out at Mimosa, Ngezi and Unki Platinum Mines. Mining operations ceased at Hartley Platinum Mine in 2000, because of bad ground conditions. Demand for PGMs has seen an increase in exploration and evaluation of Zimbabwe’s platinum deposits.

Off the Great Dyke, the potential for PGM mineralization exists in the following areas

¨ Mashava Igneous Suite

¨Bubi Greenstone Belt

DIAMONDS

Zimbabwe is located within an exceptionally rich diamondiferous metallogenic province. Large areas of the country are covered by the Archaean Craton and the Archaean Limpopo Belt which are likely to have the best developed mantle root and diamond potential along with discoveries of the mineralized kimberlites on the Craton (Murowa, Sese, Colossus) and on the Limpopo Belt (River Ranch) which make Zimbabwe an excellent exploration target with potential for economic kimberlites. The diamond exploration success in the neighbouring Botswana and South Africa, the greatest producers of gem quality diamonds has made a positive impact on the diamond prospectively of the country.  More than 120 kimberlites have been discovered but economic grades occur in two deposits the River Ranch and the Murowa Diamond Mines. Currently evaluation is being carried out on several kimberlites in the southern area of the country while some were found to be non-commercial. Of late, the discovery of diamondiferous Proterozoic conglomerates in the Umkondo basin has led to the opening of several diamond mines within the Chiadzwa area, e.g. Mbada, Marange Resources, and Anjin etc.

CHROME

Zimbabwe has the 2nd largest high grade chromium ores in the world after South Africa with reserves of approximately 10 billion tonnes.

Chrome is mainly mined along the Great dyke of Zimbabwe and occurs as seam/strati form deposits. In greenstone belts off the dyke it occurs as podiform structures in serpentinites, e.g. in Zimasco mine on Shurugwi Mashava. In Mashava chrome is found in greenstone remnants in the Limpopo mobile belt south of Mberengwa. Chrome also occurs as elluvial deposits in the greenstone areas,

Giant crystals of up to 1.5m have been found on the dyke.  Chrome is mainly used stainless steel production, as a metal coat, in the chemical industry and in metallurgical processes.

COAL

Zimbabwe has vast high grade coal deposits occurring as fossilized carbon. It occurs in lower Karoo sediments. These are the middle Zambezi basin to the north and save Limpopo basin in the south of the country hosts about 12 billion tonnes of good quality coal. About 29 coal localities are known but major producers are Hwange colliery and Makomo resources. The country’s full potential is however yet to be exploited.

NICKEL

In Zimbabwe nickel occurs within the Archean craton in rocks of komatitic composition e.g. at Trojan mine. It also appears layered/unlayered mafic-ultramafic intrusive bodies e.g. Empress, Madziwa Great dyke. It’s also found in nickel laterite e.g. northern part Great Dyke hydrothermal shear zone deposits. There are nickel deposits in several serpentinite areas in greenstone belts with igneous complexes around the country. The country has got huge potential in komatiite and laterite and more than 30 nickel deposits are known. Currently production is at Trojan mine in Bindura.

ASBESTOS

Asbestos occurs as chrysotile. It’s found in ultramafic complexes e.g. ,Mashava Igneous Complex, in massive serpentinites and slip fibre zones in which shears are filled with matted fibres in the Great dyke  e.g. Ethel mine. There are 60 deposits scattered in the Masvingo, Insiza, Gwanda, Mberengwa, and Shurugwi, which have been worked on for chrysotile.

Zimbabwe was once the world’s 3rd largest producer of asbestos before the demand declined. After gold asbestos was once largest income producer in the mining sector. Production ceased with the closure of Gaths Mine and Shabani Mine.

COAL BED METHANE

Coal bed methane is a gas intrinsically associated with coal. Coal is both a source and reservoir for methane gas occurrence in Zimbabwe. It mainly occurs in the middle Zambezi Basin e.g. in lupine concession. It’s also found in the Save Limpopo basin e.g. Save Runde district.

Reserve is still a resources studies to ascertain if the gas could be exploited commercially have not been concluded. Coal bed Methane is used for Electricity generation, Ammonia production for fertilizer and in Iron production.

COPPER

There are over 70 known deposits in Zimbabwe that have produced copper either as a primary or secondary product. The main producing area has been the Magondi Basin in an area stretching for over 150km. Similar copper deposits are found in the south eastern part of the country in the Umkondo Basin. Several copper prospects also occur in hydrothermal deposits in Archaean Greenstone Belts and in granite e.g. Inyathi, Copper duke. Primary copper production virtually ceased following closure of Mhangura, now being produced as a by-product of other minerals e.g. PGM, Gold, Nickel

IRON

Zimbabwe has huge iron deposits associated with banded ironstone formations in greenstone belts. Major deposits are estimated to be over 30 billion tonnes of reserves. Magnetite deposit associated with Carbonatites e.g. Gungwa and Dorowa, Banded Iron Formation in Archaean Greenstone Belts, magnetite schists e.g. Chiredzi deposits (Mongula and Manyoka), layered Igneous complexes source of titanium and vanadium also e.g. ChuatsaBanded Iron Formation, Archaean Greenstone belts e.g. Kwekwe, Buhwa and oxidation of other minerals e.g.  Ripple Creek Deposits with high grade ore are found in Buchwa and Ripple Creek. Significant ironstone deposits include the huge Mwanesi deposit west of Chivhu and Nyuni near Masvingo. Manyoka and Mongula and several similar deposits in the Limpopo Mobile belt are also important deposits.

PEGMATITE MINERALS

Pegmatites which are ubiquitous in several geological environments especially on the edges of greenstones and in metamorphic belts, are a source of a variety of minerals including tantalite, tin and wolframite, beryl, mica, feldspar, and gemstones such as emerald, aquamarine, chrysoberyl, alexandrite and euclase.

DIMENSION STONES

Granites, gneisses, migmatites, gabbro-norites, dolerite, marbles and quartzites, suitable for use as dimension stones are typical rocks belonging to Zimbabwe’s geological environments. The most well-known dimension stone in Zimbabwe is black granite ubiquitous in the north-eastern part of the country which has attracted considerate foreign investors.

Gold Development Initiative Fund (GIDF) full requirements

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The Gold Development Initiative Fund (GDIF) is administered by Fidelity Printers and Refiners (Private) Limited (FPR) which is the sole buyer, refiner and exporter of gold in Zimbabwe. The GDIF was created by the Reserve Bank of Zimbabwe (RBZ) as part of its initiatives to enhance economic productivity through promotion and development of the gold mining industry in Zimbabwe. The loan facility is primarily for the acquisition of gold mining plants and equipment in order to enhance gold production by miners.

We offer flexible and world-class mining investment solutions to our clients. We work with you to understand your unique financing and cash flow needs, to come up with the best financing options for your gold mining operation.

Our team is composed of dedicated and seasoned banking and mining investment professionals. Our single point of contact system means you will move easily and quickly through the investment and financing process with an expert who thoroughly understands your needs.

No matter where your mine is located, or the size of your operation, we are built to deliver the solutions you need anywhere in Zimbabwe. As our valued partner, we aim at growing your business to the next level.

At Fidelity Printers and Refiners (Pvt) Ltd (FPR), under the Gold Development Initiative Fund, we support gold mining operations with focused and customized financial products that keep mining business moving forward. No matter where the mine is located, or how many ounces they mine, we can join hands and help with everything
from project to corporate financing.

Who can apply for the Gold Development Fund

All gold producers in Zimbabwe.

LOAN APPLICATION CHECKLIST

• COMPANY (Applicable to incorporated mining entities)
• Application Letter (indicating the purpose)
• Board Resolution to Borrow / Surety
• Certified Copy of Certificate of Incorporation
• Certified Copy of Memo & Articles of Incorporation
• Certified Copy of CR14 and CR2
• List of shareholders & percentage age shareholding
• Shareholders Agreements (where applicable)
• Management Agreements (where applicable)
• Holding Company details if applicable

DIRECTORS’ / SHAREHOLDERS / OWNERS DETAILS

Passport photo taken within six months of application
Certified Copy of ID / Passport/ Driver’s License
Proof of current residence

MINE LICENSES & BUSINESS AGREEMENTS

• Certified Copy of Mine Ownership Certificate
• Certified Copy of EIA License
• Certified Copy of Explosives License
• Shareholders / Partners Agreements (where applicable)
• Management Agreements (where applicable)

MINE MANAGEMENT DETAILS

• Organizational Structure and Labour Strength
• Details of Executives and Management
• CVs for Executives and Management

TECHNICAL INFORMATION

• Geological Report (critical)
• Mine Production History
• Mining Production Plan or Forecast (including Mining Methods)
• Gold Processing Production Plan including Flowsheet Diagrams
• Life of Mine (LOM) Plan (applicable to Medium and Large Scale)
• Environmental Impact Assessment (EIA Certificate)
• Site of Works Plan / Surface Plans
• Infrastructure Status Report
• Due Diligence Report (if ever it was done)
• Bankable Document (FBS or Business Plan)

FINANCIAL INFORMATION

• Financial statements of the applicant for the previous 2 years
• Latest Management Accounts i.e. Income Statement & Balance Sheet
• Explanatory Notes to the Financial Statements
• Asset Register
• Tax clearance certificate
• Cash flow projections to cover the tenure of the loan & assumptions used
• Debtors & Creditors Age Analysis
• Quotations

WHO TO GET IN TOUCH WITH

Head Gold Development Initiative Fund, Fidelity Printers and Refiners (Pvt) Ltd
Gold Development Initiative Fund Department
No 1 George Drive, Msasa
Harare, Zimbabwe
Tel: +263 242 486694/7, 242 486670, 242 487131
Matthew Chidavaenzi

 

Four reasons why ASM decline in gold delivery.

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Four reasons why ASM decline in gold delivery.

Artisanal and Small Scale Miners (ASM) for the better part of the year have been the biggest producers of gold until this November when their delivery to Fidelity Printers and Refiners (FPR) declined by almost 44 percent compared to the previous month.

By Dickson Rudairo Mapuranga

This sharp decrease has resulted in ASM falling behind large Scale miners for the second time in a calendar year after doing so in July. Zimbabwe Miners Federation (ZMF) said that there are two chief explanations behind this severe reduction in gold deliveries to FPR, that is, fuel shortages and decline in the value of RTGS and Bond note against the USD.

In every failing economy, many sectors are affected negatively resulting in a decline in production and development, due to the prevailing economic situation in Zimbabwe, Mining Zimbabwe has identified four reasons which led to the decline in gold delivery by ASM to FPR.

Alternative market                    

The Parliamentary Portfolio on Mines and Mining development last month urged the government to remove FPR’s monopoly as the sole gold buyer to promote competition, the monopoly was accused of creating an illegal market due to unfair prices offered by FPR to the miners. With the prevalent cash shortages and the decline of RTGS against the United States Dollar, many ASM might have been tempted to seek souk in the parallel market. Thus, the enormous amount of gold FPR used to obtain from ASM might have found its way to the black market which offers good money than FPF.

Fuel shortages

The shortage of fuel played a major role in the decline of production, according to one artisanal miner, serious shortages of fuel from October have affected ASM gold miners who are more depended on diesel than large scale gold miners. Many ASM operates in remote areas where electricity is scarcely established. Since most of their apparatuses depend on diesel and petrol, the fuel crisis has led some ASM suspending operations.

Cash Crisis and inflation

The swift collapse of RTGS and the Bond money against the USD on the parallel market led to a fly rocketing of prices both on the informal and the formal sector, according to one expert in the mining industry, the government failed to recognize that when producing small quantities the thirty percent RTGS given to ASM is very impactful on the margins and profitability of small operations versus large small scale operations that have access to further government funding. Thus small scale miners either kept their gold or stopped delivering it to FPR for other markets.

Closure of gold mills

One expert in mining said that the government inspection operations resulted in the closure of several stamp mills which were located strategically close to ASM, the closure of these mills has created a burden on ASM who is now forced to transport core to a distant mills for processing, fuel crisis is further worsening the already prevailing situation, therefore productivity is affected in the in several areas due to closure of gold mills.

Can Small scale miners mine Diamond?

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Can Small scale miners mine Diamond?

 

Recently the government approved the Zimbabwe National Diamond Policy to regulate and to ensure accountability in diamond mining, the policy saw only four firms being approved by the government to undertake diamond exploration and mining in Zimbabwe, any other entity wishing to mine diamond will do so after entering into a joint venture with one of the approved companies.

Dickson Rudairo Mapuranga

Some experts believe that the future of the mining industry in Africa rests in the hands of Artisanal and Small scale miners (ASM), thus encouraging an open door policy for ASM to be considered in mining diamond.

Lately Zimbabwe Consolidated Diamond Company (ZCDC) which is one of the approved firms to mine diamond in Zimbabwe was reported to have indicated that they made a decision to bring in artisanal miners into diamond extraction in order to boost production.

One expert said that ASM is a source for poverty alleviation, it is fair to note that the entire African continent has to recognize the contribution of ASM in the mining industry, where some belts are not viable for Large Scale Miners, ASM’s contribution is needed, and therefore the government should consider ASM in diamond mining.

An adept in the diamond industry said that what is important is not so much on ASM although some affirmative action is needed to bring wealth into the hands of communities, the process of awarding the four should just be awake to the need for exclusivity. The capacity of companies is something that should be considered as diamonds play a vital role in economic resuscitation, an oligopolistic situation for now works. However, it is important to note that with proper systems to monitor them, diamond production and deposits discoveries can be up in no time using ASM.

Small scale miners believe that if they can be allowed to mine gold which is more complicated than mining diamond, therefore, the move to block them would be unjustified. However, gold is something that most ASM are familiar with and has been mined by Africans from the inception, diamond had been known but the issue is ascertaining value, thus, through ASM a lot of wealthy might be lost due to ignorance.

According to some miners, giving diamond mining licenses to ASM was never a wise option, the gold mining permits in their possession are questionable too, don’t invest in mineral exploration and don’t spend in increasing their mines. Some are holding large deposits but have no money to invest, ASM in gold mining are celebrating for producing very little, with no vision of becoming bigger and produce more.

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Mashurugwi terrorise Mazoe, Guruve residents

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Mashurugwi terrorise Mazoe, Guruve residents

Machete-wielding illegal gold panders infamously known as “Mashurugwi” are wreaking havoc in artisanal mining compounds, terrorising settlers and farmers in parts of Mazowe and Guruve.

Force is what they are known for, thwarting any resistance through machetes and other terror weapons, be it over mine claims, women or even booze in the small scale mining areas such as Zuvarabuda in Mazowe and Kamushenjere Mine in Guruve.

“Mashurugwi” is a title derived from Shurugwi the mining town where the menacing thugs reportedly began their activities; the group knows no bounds and are not afraid to unleash bloodbath in areas they set foot on.

Small scale miners are living in fear and some have since halted operations while their homes are no longer a safe hiding place.

“We are now living under the cloud of fear, if someone is beaten up reports go to police but you will soon see the guys roaming again,” said one small scale miner.

“If you open a shaft and come to discover gold samples, the machete wielding guys forcibly take over,” another small scale miner said.

“A number of women have been raped while some of the thugs are on the guard and if one dares to complain then you will be risking the lives of your family members,” said another small scale miner.

Following a ZBC story in which artisanal were fingered for damaging the rail road at Tatagura, some artisanal miners blamed the menacing Mashurugwi for the destruction saying they are the only people brazen enough to dig under the railway.

“We have lived in this area for a long time and even the police can testify that infrastructural damage began after the emergence of the ruthless Mashurugwi,” said one artisanal miner.

The Headman of the area said: “I once tried to stop them as the headmen but I was beaten up.”

“If you ask around you will realise that most of the guys who do the damage are not from this area. Yesterday, we had a meeting about this and our wish is to have an association that stands for our plight as small scale miners,” another artisanal miner chipped in.

Small scale miners have called upon authorities to find ways of vetting miners and ensuring they have traceable identity documents so that residents of the area are protected. ZBC

Chitando invites back De Beers

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Chitando invites back De Beers

De Beers and Vast Resources will be allowed to explore for diamonds in Zimbabwe, which would make them the first listed companies to mine there in that sector for two years, Mining Minister Winston Chitando said.

A spokesman for De Beers, an Anglo American unit, said in an email it was not mining in Zimbabwe and did not intend to. Vast Resources said it could not comment.

The Mnangagwa administration has been working to rebuild investor confidence since long-term leader Robert Mugabe was ousted in late 2017.

This month its mining ministry said it would let in two new companies but did not name them.

On Wednesday, Chitando told Reuters De Beers and Vast Resources would be allowed to mine, but could not comment on any changes to ownership rules. “Those are the details that have to be thrashed out,” he said.

Vast Resources signed a memorandum of understanding with Botswana Diamonds in May to form a special purpose vehicle majority-owned by Vast to develop resources in Zimbabwe.

In November, Chitando said Zimbabwe did not plan to change radically its ownership laws for platinum and diamonds.

Few miners doubt the potential of Zimbabwe’s mineral resources and it is among the world’s leading diamond-producing countries. But some investors are concerned about how much money companies can take out because of dollar shortages.

Mugabe accused De Beers of looting the largest diamond fields in Marange in eastern Zimbabwe, where production is dominated by state-owned Zimbabwe Consolidated Diamond Company. De Beers denied the charge.

Zimbabwe Consolidated Diamond Company is one of two firms currently allowed to mine diamonds there. The other, Murowa Diamonds, majority-owned by Rio Tinto until June 2015, is the only private company mining diamonds in south central Zimbabwe.

In early 2016, Mugabe’s government evicted all diamond miners from Marange, saying their licences had expired after they declined to merge under the state-owned mining firm.

As part of its quest to attract foreign investment, Zimbabwe’s new government has liberalised indigenisation laws for many minerals but still limits foreign ownership of platinum and diamond projects to a minority, with the state holding 51 percent. Mining Weekly

Chitando invites back De Beers

Mining
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Chitando invites back De Beers

De Beers and Vast Resources will be allowed to explore for diamonds in Zimbabwe, which would make them the first listed companies to mine there in that sector for two years, Mining Minister Winston Chitando said.

A spokesman for De Beers, an Anglo American unit, said in an email it was not mining in Zimbabwe and did not intend to. Vast Resources said it could not comment.

The Mnangagwa administration has been working to rebuild investor confidence since long-term leader Robert Mugabe was ousted in late 2017.

This month its mining ministry said it would let in two new companies but did not name them.

On Wednesday, Chitando told Reuters De Beers and Vast Resources would be allowed to mine, but could not comment on any changes to ownership rules. “Those are the details that have to be thrashed out,” he said.

Vast Resources signed a memorandum of understanding with Botswana Diamonds in May to form a special purpose vehicle majority-owned by Vast to develop resources in Zimbabwe.

In November, Chitando said Zimbabwe did not plan to change radically its ownership laws for platinum and diamonds.

Few miners doubt the potential of Zimbabwe’s mineral resources and it is among the world’s leading diamond-producing countries. But some investors are concerned about how much money companies can take out because of dollar shortages.

Mugabe accused De Beers of looting the largest diamond fields in Marange in eastern Zimbabwe, where production is dominated by state-owned Zimbabwe Consolidated Diamond Company. De Beers denied the charge.

Zimbabwe Consolidated Diamond Company is one of two firms currently allowed to mine diamonds there. The other, Murowa Diamonds, majority-owned by Rio Tinto until June 2015, is the only private company mining diamonds in south central Zimbabwe.

In early 2016, Mugabe’s government evicted all diamond miners from Marange, saying their licences had expired after they declined to merge under the state-owned mining firm.

As part of its quest to attract foreign investment, Zimbabwe’s new government has liberalised indigenisation laws for many minerals but still limits foreign ownership of platinum and diamond projects to a minority, with the state holding 51 percent. Mining Weekly

Mnangagwa the best man for Zim mining

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Mnangagwa the best man for Zim mining

Now the wait for the announcement of a  legitimate Zimbabwean leader is over after Emmerson Mnangagwa was announced as the victor in the just ended harmonised elections , bagging a fresh five year mandate.

A lot of expectations for the new leader are in the air after he managed ganner a majority vote of 50.8% percent against his fore, Nelson Chamisa who was not so far, gunning 44%.

Mnangagwa took over from Robert Mugabe in November following a bloodless military intervention which ensued after the nonegarian (Mugabe) had ruled the Southern African country for more than 35 years.

A lot of changes are being anticipated in all the crucial sectors of the economy and according to analysts, Mnangagwa is likely the man to transform the Zimbabwean mining landscape.

 The ascendance of Mnangagwa following the exit of Robert Mugabe through a military intervention came with it massive changes within the mining landscape, key to it being a change in policies.

Keen to revive the mining sector after years of reticence by foreign investors during Robert Mugabe’s rule, President Mnangagwa has managed to turn the country’s investment environment into a darling for many.

His summit to power has seen the country amassing a great deal of investments and other tangible commitments coming from hostile countries as far as United States of America.

The takeover of Mnangagwa saw Zimbabwe amending its Indigenisation and Economic Empowerment legislation to limit majority ownership by state entities to only diamond and platinum mines and not the entire mining sector as espoused in the previous legislation.

The indigenisation legislation introduced during the tenure of Mugabe was designed to increase black Zimbabweans’ participation in the mining sector but were open to abuse.

The legislation had become an elephant in the room for Mugabe’s Government and it also became a major hindrance to attraction of tangible and clean investments in the mining sector.

The amendments were included in the Finance Act, which covers the 2018 budget and were signed into law. According to the new amendments, only state-owned mining entities will hold majority shares in diamond and platinum companies.

What Mnangagwa has done far has seen a lot mining houses jumping to the conclusion the Mnangagwa’s fresh mandate as the President of Zimbabwe might be the best thing ever to happen to the country’s mining sector.

What has been achieved so far?

Cypriot investor Karo Resources has since signed a $4.2 billion deal  with Government of Zimbabwe under Mnangagwa’s watch.

The integrated project located in the Mhondoro-Ngezi platinum belt, west of Harare, where Impala Platinum Holdings has operations will include a coal mine and power station to produce electricity for the smelter, and should employ 15,000 people when fully implemented.

Keen to revive the mining sector after years of reticence by foreign investors during Robert Mugabe’s rule, Mnangagwa is of the opinion that the deal has capacity to catapult Zimbabwe to greater heights.

The project was first mooted six years ago but had been held back by government red tape and “other unnamed vested interests, which were corrupt.

Government following Mnangagwa’s victory is likely going to continue reforming the investment climate by putting in place investor friendly policies as efforts to attract foreign direct investment  intensify.

Mnangagwa has already placed economic development on top of its agenda, with various reforms being put in place to lure investors.

An example is the scrapping of the indigenisation law, making it only applicable to investments in diamond and platinum mining.

The renewed emphasis on the economy has resulted in an influx of investors expressing interest to invest in Zimbabwe from across the globe, including from countries that were previously hostile.

Since November last year more than $15 billion worth of investment commitments have been registered in a show of faith in the new administration and its ideas.

Again in a show of faith, a large business delegation from the Chinese province of Zhejiang is in the country to scout for business opportunities following President Mnangagwa’s visit to that province in April this year.

Zhejiang is one of China’s richest provinces whose main manufacturing sectors include electromechanical industries, textiles, chemical industries, food, and construction materials.

As of 2016, Zhejiang’s nominal GDP was $711 billion, about 6.35 percent of China’s GDP.

The focus shown by Mnangagwa during his eight months stay in power is likely going to continue going into his fresh mandate. He might be the best thing to have ever happened in the Zimbabwe mining sector in the past two decades.

Zimbabwe in the process of crafting mineral specific policies

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Zimbabwe in the process of crafting mineral specific policies

Addressing delegates attending the Mine Entra conference in Bulawayo last week, Mines and Mining Development deputy minister Polite Kambamura said in order to support and facilitate envisaged sustainable mineral development, government, through his ministry, was in the process of crafting various mineral specific policies.

GOVERNMENT is in the process of crafting mineral specific policies for chromium, diamond and gold, among others, in order to support and facilitate envisaged sustainable mineral development.

Addressing delegates attending the Mine Entra conference in Bulawayo last week, Mines and Mining Development deputy minister Polite Kambamura said in order to support and facilitate envisaged sustainable mineral development, government, through his ministry, was in the process of crafting various mineral specific policies.

These include diamond, chromium development, gold development and coal development policies.

Diamond policy has already been firmed and approved by Cabinet, he said.

“I can assure all here present that there is political will, at the highest level, to ensure sustainable development in the mining sector and the national economy for the mutual benefit between the Zimbabwean citizenry and investors,” Kambamura said.

He said Zimbabwe was under-explored and has not been subjected to modern exploration techniques for new discoveries.

In that regard, government, through the ministry, was now actively processing Exclusive Prospecting Orders (EPOs) applications to facilitate exploration activities in the country.

“These exploration initiatives will assist in the opening of new mines, expansion of existing operations and resuscitation of old mines, leading to increased production, creation of employment and the general improvement of living standards of communities and the nation at large,” Kambamura said.

He also said Zimbabwe was a competitive mining economy from a geology and mineral potential perspective, but weak from a technology, production cost and capacity point of view.

“In this regard, government is promoting this initiative, including the facilitation of competent investment such as the Karo Platinum project and various joint venture partnerships with leading global mining companies such as Alrosa of Russia in the case of diamonds,” he said.

 

NewsDay

Is gold the answer to Zimbabwe currency woes?

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Is gold the answer to Zimbabwe currency woes?

Damned if you do, damned if you don’t, that’s just how Zimbabwe has been grappling with the dilemma of whether its own money should return earlier or not. Or rather be shelved for much longer, until such time that it would be ripe to bring back the local dollar.

By Justice Zhou

The subject has for long been a burning issue. In recent weeks, it has been trending amid swirling rumours that the country was on the verge of reintroducing its own currency, backed by gold this time, nearly a decade after it switched to the US dollar in order to rein in galloping inflation. However, it is not clear if authorities were already in the process of stockpiling reserves of the yellow metal to back the proposed money. The political stakes are high as the country heads for crucial national elections slated for the end of next month.

It obviously has been tempting for all the presidential hopefuls, particularly the frontrunners, to see the cash crisis as a key in the race for the top job. By the same token, the mining industry players, some of the hardest hit by the crisis, will find any developments that bring about sufficient liquidity to be a welcome relief.

Coupled with forex shortages, the absence of the local currency remains a major concern for miners whose operations have been thrown into disarray, as they struggle to secure equipment and spare parts, while experiencing delays in paying suppliers. It would be rather interesting to find that the sector actually takes the lead in digging its way out of the cash problems, supplying the gold that will be required to support the new currency.

Up until the greenback began to disappear early 2013, it looked as though the solution to the endless liquidity problems has been found, but alas. The bond notes, introduced in 2016, have not been helpful either. But the more things seem to change, the more they remain the same in Zimbabwe. But can gold provide the ultimate answer to the endless cash crunch?

“We are headed towards a catastrophe if the powers that be are not careful. I have warned before about the dangers of printing money and the bond note,” renowned journalist Hopewell Chin’ono said.

“The government is talking about bringing back the Zimbabwe Dollar to alleviate the cash crisis. It won’t alleviate anything! Your own currency is useless if you are not producing anything meaningful for export.

Ironically, the world completely abandoned the so-called gold standard way back in the 1970s, immediately switching to the US dollar as the newfound alternative reserve currency upon which countries would measure the strength of their own currencies.

Experts say some of the major benefits derived from this monetary system are that a valuable and fixed asset would back the money & its worth. That, in essence, provides a stabilising and self-regulating effect on the economy, as the government & its ability to print money would be limited only to certain quantities of gold. Eventually, it follows that with money printing only depended on the amount of bullion reserves, runaway inflation will thus be kept under control.

Nevertheless, conspiracy theory has it that the economic powerhouse now abuses its greenback as a tool to manipulate the global economy in its favour, whereas influencing political events in weaker nations for its geopolitical gains. For example, Zimbabwe has coincidentally been cited by critics as a case in point. They argue that the initial abundance of the US dollar during the tenure of the ZanuPF/MDC unity government between 2009 and 2013, and its sudden disappearance thereafter as proof that the country was being punished for former President Robert Mugabe’s anti-western rhetoric.

The mainstream opposition coalition has argued it was still too early to reintroduce the local dollar, saying the preliminary solution to the cash shortages alternatively lies in neighbouring South Africa’s rand. Former economic development minister Tapiwa Mashakada says joining the Rand Monetary Union would be a moot point.

“In any case our central bank is not using monetary policy instruments due to the dollarization of the economy. The use of the rand will vaccinate the central bank against quasi-fiscal operations which are harmful to the stability of the economy,” Mashakada said.

“At the end of the day, the MDC Alliance would want to see to it that banks have cash and that ATMs dispense cash. Banking queues will be a thing of the past. In summary the MDC Alliance will take Zimbabwe to the Rand Monetary Union, decommission bond notes, and address all the macroeconomic fundamentals inhibiting the re-introduction of the Zimbabwe dollar. This is our solution to the liquidity crisis playing out as cash shortages.”

Zimbabwe’s gold mining and trade legacy traces its history back to medieval times, with the ancient Munhumutapa Empire alleged to have boasted roughly 4 000 gold mines across the country. The empire’s mining activities saw tons of bullion ore being purified and later cast into jewellery and means by which to trade with Portuguese and Arabic explorers and other fortune hunters. Legend also has it that the southern African country was the biblical Ophir, in which King Solomon’s mines were domiciled. Today, the yellow metal still holds its place as one of the main contributors to Zimbabwe’s economy.

For the time being, the mining sector will be kept guessing as to whether the new currency is really on the way perhaps until after the elections. The Reserve Bank of Zimbabwe has pledged to abide by its duty to ensure timeous payments to miners from which it buys gold. It currently is supposed to have been paying 70 per cent that it owes partly in US and the remainder in local bond notes as bank transfer.It has since emerged, however, that the central bank is defaulting on early payments due to the worsening forex and bond notes crunch. Still, is gold the answer? That is the big question.

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