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Coal producers seek Forex payments from ZESA

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Coal producers seek Forex payments from ZESA

Coal Producers Association is seeking permission from monetary authorities to sell its coal to ZESA Holdings in foreign currency as the power utility is billing exporters in forex for electricity consumption.

The Reserve Bank of Zimbabwe (RBZ) recently directed the State-owned power utility, ZESA to bill exporters in hard currency.

Speaking to Mining Zimbabwe, Coal Producers Association chairman, Mr. Ray Mutokonyi said the greatest challenge facing the coal miners in the country so far regards sustainability issues as the cost of production did not match with prices on the market.

“The major challenge that we have for now is that of sustainability. The cost of production and the price of coal on the local markets is not sustainable.

“At the moment, the price of coal on the local market is US$16 per tonne and ZESA is paying us at the official interbank exchange rate of US$1: ZWL$25,” he said.

“We are also saying ZESA should pay us in foreign currency as they are also receiving payment for electricity consumption by exporters including coal producers in forex.

“If we are allowed to sell coal to ZESA in forex, our operations will become sustainable unlike at the moment.”

He said the coal producers have since engaged RBZ over the matter.

“Nothing tangible in that regard has materialised yet but it is our fervent hope that the desired results will be achieved,” said Mr. Mutokonyi.

The country’s coal mining sector is dominated by Makomo Resources, Zambezi Gas, and Hwange Colliery Company Limited with the above producers supplying about 90 per cent of their output to the Zimbabwe Power Company’s thermal power stations.

The foreign currency that ZESA is receiving from the exporters for electricity consumption was being channelled to import power.

At present, Zimbabwe imports power from regional utilities such as Eskom of South Africa as the country’s power generation capacity was depressed.

Last year, Eskom cut off power exports to Zimbabwe over a US$80 million debt, which the government has since cleared paving way for fresh power import negotiations.

The country requires about 2200MW of electricity but currently generates under 1000MW.

The subdued generation is largely due to lack of investment in new power projects in recent years as ZESA was forced to operate with antiquated equipment at its power stations.

Due to depressed generation capacity, critical sectors of the economy such as manufacturing, mining, and agriculture have had to grapple with electricity challenges, whittling down their production capacities.

However, the government has embarked on a major expansion project of its existing power stations such as Kariba, and Hwange with a view of boosting the operational efficiency of the power plants.

Coal intake at the country’s thermal power stations is expected to increase as a result of the rehabilitation and expansion projects being undertaken or planned by ZESA.

The Zimbabwe Energy Regulatory Authority has since 2010 licensed over 70 Independent Power Producers as part of a broader scope to improve electricity supply into the economy.

However, not much power being generated by the IPPs is being fed into the national grid as the projects were still at different stages of development.

This article first appeared in the 15 June 2020 issue of Mining Newsweek

Fast track the establishment of Gold Service centres

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Fast track the establishment of Gold Service centres

The Zimbabwe Miners Federation (ZMF) has called on the government to expedite the setting up of gold service centres across the country to boost the production of the yellow metal.

A gold service centre is an establishment where all the functions related to gold mining from extracting to processing and sales are coordinated from.

The Government targets to establish 15 additional gold service centres countywide before the end of the year.

At present, despite having seven mining regions, Zimbabwe only has one operational gold service centre located in Bubi District, Matabeleland North Province.

The Government announced plans to roll out a total of 20 gold service centres countrywide to boost the mineral’s output as well as curbing leakages as small-scale and artisanal miners would be served by the centres.

ZMF spokesperson Mr. Dosman Mangisi told Mining Zimbabwe that his organisation was making a clarion call for the Government to expedite the setting up of gold centres saying such infrastructure plays a big part in mechanising small-scale and artisanal miners.

“Currently, the country only has one gold service centre in Bubi that is functional; the one in Silobela is not operational due to administrative challenges.

“Basically the development of gold service centres across the country is a key focus area that government should not fold up hands but should expedite especially at this juncture when the country is looking ahead to improve gold output to 100 tonnes by 2023,” he said.

Last year, the country produced 33,2 tonnes of gold against a target of 40 tonnes and the projection was missed due to a myriad of challenges facing the mining industry, among them power constraints.

Mr Mangisi said the gold service centres also play a part in the formalisation of artisanal miners’ activities with a knock-on effect of increased productivity.

“The service centres are also critical in skills transfer. It particularly focuses on those miners (artisanal) who are of no fixed abode to make them of fixed abode as they get to do their operations using a particular service centre within their jurisdiction,” said the ZMF spokesperson.

He said the development of the gold service centres is critical taking a leaf from other regional countries like Tanzania and Mozambique where such infrastructure has been taken seriously facilitating the formalisation and mechanisation of the small-scale and artisanal mining sector.

“Locally, the gold service centre initiative is lagging behind and if it is pushed, it will turnaround the tables.”

The small-scale scale mining industry plays a significant role in the country’s mining sector as it contributes more than 60 percent to total production of the auriferous resource in the country.

Turning to the recently announced gold trading framework by the Reserve Bank of Zimbabwe through the country’s exclusive gold buyer, Fidelity Printers, and Refiners, Mr. Mangisi said:

“The reviewed gold trading framework is a shot in the arm to the miners. As the small-scale miners are now being paid a flat rate of US$45 per gram of their gold deliveries, they’re even more than happy looking at the fact that everything (mining consumables) are quoted on US$, it means they are now able to buy the consumables unlike in the past where 55 percent was paid in forex while 45 percent was in local currency.”

Under the targeted US$12 billion mining industry economy by 2023, the gold sub-sector is expected to contribute US$4 billion.

This article first appeared in the 15 June issue of Mining Newsweek Magazine

Miners appeal for subsidised roller meal

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Miners appeal for subsidised roller meal

Artisanal and small-scale miners in Gwanda, Matabeleland South, have appealed to the government to allocate them the subsidised roller meal as they were struggling to access the commodity in the shops.

Zimbabwe is under an indefinite Covid-19 national lockdown, and as part of the measures to enforce it, mining workers were directed to “remain within the precincts of their accommodation at workplaces for the duration of the lockdown.”

Workers are also expected to observe social distancing.

In response to the ongoing Covid-19 induced national lockdown and to ensure social distancing for public health safety in the fight against the COVID-19, government, through the Ministry of Public Service, Labour, and Social Welfare, is distributing subsidised roller meal to all the formal retail shops in cities and towns.

A 10-kilogram bag of the subsidised roller meal is going for $70 while the unsubsidised one is going for $300.

Miners who spoke to Mining Zimbabwe said they were struggling to access the subsidised mealie-meal as they spend most of their time in the bush, mining.

“We are starving to tell you the truth and the situation is not good at all. We are struggling to access the subsidised mealie-meal in Gwanda shops because most of the time we will be in the bush,” a miner who identified himself as Ndodana Tshuma said.

Miners said the unsubsidised mealie-meal was being sold in foreign currency like the United States dollar, Botswana pula, and South African rand.

Mthandazo Women Miners Association chairperson Sithembile Ndlovu appealed to the government to intervene.

“Since workers are not allowed or restricted to leave their workplaces for the duration of the lockdown as part of measures to combat the spread of the COVID-19 pandemic, as mine owners we have taken it upon ourselves to source food on their behalf,” Ndlovu said.

“However, we are struggling to source the mealie-meal for our workers as the subsidised roller meal in Gwanda town is not easily available. Sometimes we end up travelling to areas such as Guyu looking for mealie-meal. It’s really bad because workers need to eat for them to perform.”

“We appeal to the government to intervene and at least allocate us the subsidised roller meal. Otherwise, production in mines is going to be greatly affected.”

Contacted for comment on the matter, Public Service, Labour, and Social Welfare minister Paul Mavima, however, professed ignorance, saying “we distributed mealie-meal to all parts of the country last week. I’m not sure what is happening in Gwanda.”

Gwanda falls within the dry regions of the country, receiving very little rainfall each year, which makes it susceptible to agricultural crop failures.

As such, year in-year out, the mining area is always struck by drought.

As of June 11, Matabeleland South province has recorded 45 COVID-19 cases and zero deaths while countrywide, 332 cases had been recorded with only 4 deaths.

This article first appeared in the 15 June issue of Mining Newsweek Magazine

Mining in Zimbabwe in 2020: Achievements, the good and the bad, what should be fixed, improved and recommendations

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Mining in Zimbabwe in 2020: Achievements, the good and the bad, what should be fixed, improved and recommendations

Zimbabwe’s mining sector is expected to be one of the key drivers for economic growth this year on the back of its export generation capacity.

The industry accounts for between 12 and 15% of annual Gross Domestic Product (GDP) and the diverse mineral base has the potential to generate about US$18 billion annually, experts say.

In this article, we will look at the achievements that have been made so far in the mining sector, the challenges, the good and the bad, as well as things that needed to be fixed and recommendations.

Challenges & the bad

  1. a) COVID-19 pandemic

The year 2020, however, started on a bad note with the operating environment extremely volatile, dampening the mining sector’s full potential.

For instance, the gold sector, which is one of the largest foreign currency earners in the country ahead of tobacco, registered a 17% fall in production to 7.18 tonnes in the first four months of 2020 from 8.63 tonnes extracted during the same period in 2019.

To make matters worse, the mining industry has been heavily battered by the COVID-19 pandemic, having lost more than US$200 million in revenue during the first 30 days arising from a total lockdown, according to the Chamber of Mines of Zimbabwe (CoMZ).

Mineral production for the second quarter of 2020 is expected to decline by about 60% compared to the first quarter, with revenue losses exceeding US$400 million.

Gold and platinum are expected to have a loss of about US$160 million while potential revenue loss for nickel, ferrochrome, coal, and diamonds for the second quarter of 2020 is estimated to exceed US$100 million.

All these figures do not point to a rosy 2020.

“Most mining companies are facing reduced productivity and production due to scale down of operations on the back of lockdown in transit and buyer countries,” reads CoMZ’s report titled Economic impact of COVID-10 on the mining industry: Proposals for intervention measures.

CoMZ said the situation had been exacerbated by difficulties in securing inputs for production and replacement capital due to widespread lockdown in source markets.

  1. b)     Corruption

Corruption is one of the biggest impediments in the mining sector. Mining claims are reportedly being allocated clandestinely or to those who are politically-connected, further putting more dents on the country’s heavily battered image.

For instance, Hwange Colliery in 2016 lost $111 million through corruption, mismanagement, reckless trading and money laundering when Mines minister Winston Chitando was the company’s board chairman, according to the audit report compiled by Reynolds Tendai Muza, a forensic auditor and investigator with Ralph Bomment Greenacre and Reynolds.

Hence, corruption among other malpractices should be done away with for the mining sector to thrive.

  1. c) The spate of violence in the sector

Rampant violence caused by machete-wielding gangs in the artisanal and small-scale mining casts doubt on the sustainability of anticipated socio-economic development hinged on gold production.

Over the years, the government appeared to have taken a backseat whilst chaos, violence and other forms of conflict were festering in the artisanal and small-scale mining sector.

ZELA reports that Vectus Mine in Gwanda, had some machinery, water pipes, and hammer mill engines stolen during the lockdown period.

“This has forced the company to scale down its operations, reducing working hours to allow workers to complete the security process and retreat into their quarters for safety,” it said.

New cases of machete gold gangs and criminals were also reported in Maphisa in Matebeleland in May 2020 where a group of seven raided Goodcow Mine armed with machetes and axes and took away 12 x 50 kg bags of gold ore.

Failure to curb violence in the mining sector will seriously affect production.

What should be fixed?

  1. a) Plug leakages/address price disparities

A lot needs to be done for the mining sector to realise its full potential.

For instance, the government should plague mineral leakages by addressing payment issues. The country is losing tonnes and tonnes of gold through smuggling to other countries mainly South Africa that offer better prices compared to the ones being offered by the country’s sole gold buyer—Fidelity Printers and Refiners (FPR).

According to Finance and Economic Development Minister, Mthuli Ncube close to 34 tonnes of the yellow metal were smuggled to Rand Refinery in South Africa whereas President Emmerson Mnangagwa also disclosed in 2019 that he discovered that US$60 million worth of gold was sold through informal channels to a Dubai-based company.

In a bid to please small-scale miners, FPR recently announced a gold trading framework that provided for a flat price of US$45 per gram delivered by small-scale producers and a 70/30 framework for large scale gold producers.

The fixed rate of US$45, however, was not responsive to gold price movements on the international market, the Zimbabwe Environmental Law Association (ZELA) points out.

On the day that FPR announced the new gold trading measures, the international market offered US$54.8 per gram of gold, meaning the gold buyer was paying 17.88% less than what is offered on the international market bearing in mind the price can change.

The price difference is quite significant, and it leaves a gap for illicit gold trade to continue thriving, ZELA opined.

As such, there is a need for the government to align prices for gold deliveries from artisanal and small-scale miners with the international market to promote transparency and responsiveness of its gold price.

But according to ZELA, a comprehensive reform package is needed to remove oxygen from the illicit gold trade by expanding focus to include legal and financial support to formalise artisanal and small scale mining.

  1. b) Address electricity challenges

One of the challenges faced by the mining sector is the cost of electricity which remained high, hampering the viability of mineral producers.

Zimbabwe’s gold deliveries last year surged 17% to 27.6 tonnes from 33.2 tonnes in 2018 due to power outages which intensified in June.

Due to electricity challenges, among others, the mining sector registered a 17% fall in production to 7.18 tonnes in the first four months of 2020 from 8.63 tonnes extracted during the same period in 2019.

CoMZ appealed for a reduction in electricity tariff for ferrochrome producers in light of the depressed prices and their need to remain in business in the wake of the COVID-19.

  1. c) Funding

Mining is capital intensive.

According to CoMZ the mining sector needs fresh capital investment to ensure that positive growth and viability are maintained. The mining body says mining companies need over US$7 billion to recapitalise their operations over the next five years, from 2018 to 2022.

But the challenge is that local financial institutions have not been offering long term capital, making it difficult for mining companies to borrow for recapitalisation or to sustain output growth or undertake new projects.

Most of them need to replace antiquated equipment that has become inefficient and costly.

As such, the government, through FPR, should offer cheap funding for both small and big producers.

  1. d) Certificate Issuances

After prospecting and submitting all paperwork to the Mines Ministry Zimbabweans have gone over three years and counting without receiving Certificates. This creates a breeding ground for gold leakages and creates room for corruption and claim disputes.

Achievements & the good

  1. a) Efforts to rejoin LBMA

The efforts being made by the government to rejoin the London Bullion Market Association (LBMA) should be applauded. LBMA is the largest over-the-counter gold and silver wholesale market in the world where investment banks, brokers, dealers, exchange-traded funds, jewellery companies, mining companies, refiners, and central banks, interact and trade with each other.

It attracts participants from all around the world and sets twice the daily global reference benchmark for gold.

LBMA is the biggest centre for gold trading, which can potentially increase Zimbabwe’s ability to sell its gold to international buyers, including its former trading partners.

Mines and Mining Development deputy minister Polite Kambamura told Mining Zimbabwe Magazine that they were making frantic efforts to be readmitted to the global market.

The country was ejected from the LBMA in 2008 following depleted gold production levels which slumped to 3 072kg tons, far below the stipulated 10 tonnes per annum required by the London Bullion guarantee membership.

Being readmitted to the LBMA can potentially increase Zimbabwe’s ability to sell its gold to international buyers, including its former trading partners.

  1. b) Fuel allocation to miners & increase of gold centres

Zimbabwe’s gold deliveries surged 44% to 2.54 tonnes in January this year from 1.77 tonnes during the same period last year on the back of increased fuel allocations to miners and increase of gold centres across the country, according to FPR.

Miners need fuel for generators and other machines for dewatering processes. Hence, the commodity should be accessible and affordable for maximum returns.

However, a report compiled by ZELA notes that “access to fuel continues to be a challenge because suppliers are only accepting bond notes in cash, while Fidelity Printer the gold buying government arm is making payments in US dollars and bank transfer.”

“Fuel can only be purchased by exchanging the US dollars or bank balance for bond notes. As a result, the cost of fuel is high.”

Recommendations

For the mining sector to contribute immensely to the country’s GDP, ZELA said the Ministry of Mines and Mining Development must chip in by enhancing transparency and accountability in the administration of mining titles through computerisation of the long-overdue mining cadastre system.

It said ease of doing business in artisanal and small scale mining must be given priority by the government.

“For instance, the gold mobilisation committee is accused of choking artisanal and small-scale mining due to its rent-seeking behavior motivated by the knowledge that the bar of compliance for ASM is too high.”

“Artisanal mining must be prioritised in the long-overdue reform of the old Mines and Minerals Act with compliance burden being distinguished with those of large scale miners,” the report reads.

ZELA said FPR should not only care about the golden eggs but the goose that lays them too.

Last year, artisanal miners accounted for 63% of gold deliveries to FPR.

“Arbitrage opportunities must be removed by ensuring that the gold payment arrangements for ASM and large scale miners are not differentiated except that FPR must continue paying ASGM in cash and large scale miners through bank transfers,” ZELA said

 

This article first appeared in the 15 June issue of Mining Newsweek Magazine

Ferrochrome Industry operating at less than 10% capacity

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Ferrochrome Industry operating at less than 10% capacity

Zimbabwe’s ferrochrome industry is operating at less than 10% capacity with one of the country’s major firms, Zimasco shutting down operations due to the depressed export market induced by the  Covid-19 global pandemic.

The pandemic was first detected in China last  December and the health crisis has spread across the world threatening national economies.

Speaking to Mining Zimbabwe on condition of anonymity, an official from Zimasco, said the mining concern had ceased operations because of the subdued export market.

“We closed because of the market and as of now, the ferrochrome industry is running at a very low capacity.

“We (Zimasco), are not running but others are running at a very low capacity, less than 10% the whole industry.

“This is because we export everything and the whole globe was hit by the Covid-19 pandemic, so the market is weak,” said the official.

Zimasco together with other producers such as ZimAlloys and Afrochine produce ferrochrome that is exported to European and Asian markets where Covid-19 has severely plagued.

Since the outbreak of the disease, the World Health Organisation reports that the pandemic has affected close to 700 million people while claiming about 418 000 lives worldwide.

Asked why Zimasco was not stockpiling chrome during this Covid-19 period, the official said:

“There isn’t much money that is made from chrome and ferrochrome, so we cannot afford to stockpile.

“As a result, we are closed doing nothing regards production and smelting.”

Zimasco stopped smelting operations in March and the ferrochrome producer expects to resume production once the global export market emerges from the COVID-19-induced depression.

“As you know, the market is also driven by the Coronavirus, so it depends on how people get on top of the Coronavirus and the market stabilises, otherwise at the moment the market is very weak,” said the official.

Ferrochrome is also among the minerals that Zimbabwe has pinned hopes on as far as propelling the mining sector to attaining the projected US$12 billion mining economy by 2023.

Under the US$12 billion mining industry road map launched by President Emmerson Mnangagwa last October, the government envisages that ferrochrome, iron, coal, and diamonds will contribute a congregated US$1 billion.

This article first appeared in the 15 June issue of Mining Newsweek Magazine

Expedite Digitalisation to promote transparency and accountability

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Expedite Digitalisation to promote transparency and accountability

Mining is one of the core sectors that drive in an economy.  In many developing countries, it is the only realistic alternative to kick start economies and speed up general development.

By Timothy Chizuzu

The mining sector is referred to as the industry of industries as it does not only contribute to gross domestic product (GDP) but to the growth of other industries such as power, agriculture, and steel.

Globally, Zimbabwe is one of the many countries that is endowed with mineral resources and mining has always played an important role in the country’s history of economic development. However, the country needs to lure more local and foreign investors to invest in our mining industry to revive the economy and also to meet the 12 billion mark by 2023 set by the President.

Our country needs foreign direct investment and also to boost investor confidence, the key issues which need to be addressed are transparency and accountability on the issuance of mining titles.

Transparency is used as a means of holding public officials accountable and fighting corruption, while accountability refers to the responsibility or obligation of government officials to act in the best interests of society or face consequences. Public officials should be held responsible for their actions. Legal accountability concerns the mechanisms by which public officials can be held liable for actions that go against established rules and principles.

Digitalisation

The government should speed up the process of digitisation since most of the maps used at the Ministry of Mines are torn and some you can not even read what is on them and it is very difficult for us to convince an investor to buy or peg a claim on a map which is not clear and which he or she cannot distinguish the boundaries.

Torn and unclear maps are one of the major causes of disputes in the mining industry that usually leads to over pegging and double allocation of mining claims. This affects production since people will spend much of their time attending courts which creates downtime and loss of production.

With digitisation, everyone will have access to information and if someone makes an application and over pegs, the existing mining claims the system automatically rejects the application. Also, an interested party with be able to apply from his/her consultant office and make all payments without visiting the office eliminating possible corruption, saving time, and money for travelling and hotel bills.

A good example is the case of Kenya where all mining applications and payments are done electronically reducing interactions among officials and clients this promotes transparency.

I think the best way to achieve this goal is for the ministry to have a pilot project which starts from each provincial-level whereby all existing claims are put in the database before adding new ones. Provincial then to the national level where all the information is stored and managed.

We need to revive our mining industry and economy and it takes all of us leadership and people at large to find ways to archive our goals which promotes growth and sustainable development.

This article first appeared in the 15 June issue of Mining Newsweek Magazine

ZMDC partners local investor to resuscitate gold mines

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ZMDC partners local investor to resuscitate gold mines

The Zimbabwe Mining Development Corporation (ZMDC) has signed a joint venture agreement with an unnamed local investor to resuscitate its defunct gold mines in the country.

Benard Rinomhota

ZMDC is a parastatal with diversified interest in the mining sector and in recent years the corporation has been scouting for local and foreign investors intending to reopen its mining operations that are lying idle.

The mines that ceased operations include those in graphite, copper, tin, emerald, and platinum. They closed due to several reasons among them a huge debt overhang.

In an interview, Mines and Mining Development Deputy Minister Engineer Polite Kambamura said:

“They (ZMDC) have signed a joint venture agreement with one local investor who will be coming on the ground soon mainly to resuscitate the gold assets.

“The investor will be announced in due course.”

Recently, it was reported in some sections of the media that a prominent Harare business tycoon with interests in mining and oil, Mr. Kudakwashe Tagwirei was angling to buy four gold mines owned by the government through ZMDC.

The assets comprise Sabi, Golden Kopje, Elvington, and Jena gold mines.

ZMDC owns over 20 mines dotted across the country.

Eng Kambamura said the mining group was still to secure investors for its other idle operations with interest in copper, graphite…

“They are yet to find investors for other assets. The investors being sought are a combination of local and foreign,” he said.

The revitalisation of ZMDC mines across the country is on Government’s top priority list as it angles to achieve a US$12 billion industry by 2023.

So far, Zimbabwe’s mining sector is the largest foreign currency earner, accounting for 70 percent of export receipts.

And under the US$12 billion mining roadmap, gold is expected to contribute US$4 billion, platinum US$3 billion while chrome, iron, steel, diamonds, and coal will contribute US$1 billion. Lithium is expected to contribute about US$500 million while other minerals will contribute US$1,5 billion.

This article first appeared in the 15 June issue of Mining Newsweek Magazine

Zimbabwe upscales efforts to join the London Bullion Market Association

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Zimbabwe upscales efforts to join the London Bullion Market Association

Zimbabwe is upscaling its efforts to be readmitted to the London Bullion Market Association (LBMA) so that it optimises earnings from gold through participation on the global arena, a government official has said.

Zimbabwe was booted out from the LBMA in 2008 following depleted gold production levels which slumped to 3 072kg tons, far below the stipulated 10 tonnes per annum required by the London Bullion guarantee membership.

However, the requirement was fulfilled in 2015 when production hit 21 tonnes.

Ever since then, the country’s gold output has been on an upward trajectory, with production hitting 33.29 tonnes in 2018 before dropping to 27.66 tonnes last year.

LBMA is the largest over-the-counter gold and silver wholesale market in the world where investment banks, brokers, dealers, exchange-traded funds, jewellery companies, mining companies, refiners, and central banks, interact and trade with each other.

It attracts participants from all around the world and sets twice the daily global reference benchmark for gold.

LBMA is the biggest centre for gold trading, which can potentially increase Zimbabwe’s ability to sell its gold to international buyers, including its former trading partners.

In a telephone interview with the Mining Zimbabwe Magazine, Mines and Mining Development deputy minister Polite Kambamura said the government was making frantic efforts to be readmitted to the global market.

“We want as much to be readmitted to the London Bullion Market Association. The challenge that we are having now, of this pandemic, we cannot fully stretch our muscles in terms of production,” he said.

“As much as we are trying our best because as of now, there are a lot of things that are affecting the industry, things like consumables and funding. The current production that we are having allows us to join the LBMA.”

“So we are making efforts to reengagement with the LBMA. As soon as things normalise in terms of this pandemic, definitely, there are no two ways about it, we will be admitted,” Kambamura said.

Discussions to rejoin the LBMA have been on the agenda for the last five years or so, but with little success.

Currently, the southern African nation is selling its bullion to Rand Refiners of South Africa where a levy of 0,3% is effected on the total earnings.

Kambamura admitted that the country was losing a lot by not trading in the LBMA.

“As you are aware, currently we are selling our bullion to Rand Refinery. There are costs involved in terms of fees to Rand Refinery and even on the prices we don’t have that leverage,” he said.

“In the LBMA we will be exposed in the international community where prices are a bit higher and also we can have investors who may be interested in coming to invest in the country especially in the gold industry, not forgetting that in our US$12 billion milestone, we will be contributing US$4 billion by 2023.”

 

“So, to achieve that, we need to be readmitted on the LBMA to be on the international arena,” he said.

Last year, President Emmerson Mnangagwa launched a strategic roadmap to propel the country’s mining sector to a US$12 billion mining industry by 2023

Under the mining roadmap, gold is expected to contribute US$4 billion, platinum US$3 billion, while chrome, iron, steel, diamonds, and coal contribute US$1 billion.

Lithium is expected to contribute US$500 million and US$1,5 billion will come from other minerals.

This article first appeared in the 15 June issue of Mining Newsweek Magazine

BREAKING: Mining tycoon, John Bredenkamp dies

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BREAKING: Mining tycoon, John Bredenkamp dies

Zimbabwean mining tycoon John Bredenkamp has died. He was 79. Online reports say the wealthy tycoon passed away from kidney failure.

More to follow

UK company completes reverse takeover of Zimbabwe coal project

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UK company completes reverse takeover of Zimbabwe coal project

UK Investment holding company Contango Holdings completed acquisition by way of reverse takeover of Consolidation Growth Holdings’ interest in the Lubu coalfield project, in Zimbabwe.

The Company on June 18 started trading on the LSE. The company’s share capital consists of 203-million shares of 1p each.

The admission follows the completion of an acquisition by way of reverse takeover of Consolidation Growth Holdings’ interest in the Lubu coalfield project, in Zimbabwe.

Contango now has a 70% interest in the Lubu project, which has had more than 12 000 m of drilling completed and which has a total resource of more than one-billion tonnes of coal.

The company acquired the interest in the asset for an implied value of £6.4-million and in June last year started an exploration work programme, which included nine drill holes designed to enable full washability test work and the determination of product range and grade.

Contango has spent more than $750 000 on development work at the project to date.

The company is targeting the production and sale of semi-soft coking coal for export to Southern African countries and additional potential for sales of thermal coal to domestic power companies.

Contango is in discussions with a number of offtake groups to sell an initial one-million tonnes a year of coal.

The company says site preparation is under way and boxcut for mining will start soon, with first production and sales expected before the end of the year.

“I am delighted to have successfully brought this asset to market and I am confident that the work conducted on Lubu in recent years will translate to material value for shareholders in the near future.

“The remaining months of 2020 are set to be punctuated with high impact news flow as we look to deliver first production and revenues from Lubu by the end of the fourth quarter,” says executive director Carl Esprey.

He adds that the company’s strategy is centred on providing early cash flows from this first asset, and then expanding its production schedules to realise the full value of this one-billion-tonne coal project.

“I believe this is a message which will resonate with investors as we look to underpin the company’s financial performance with the objective of supporting a dividend policy,” Esprey states.

The company will provide further details on its activities as they progress. The site is being prepared for production, specifically the refurbishment and development of supporting facilities, ground clearance and removal of an overburden of the 20-acre area that comprises the initial mining zone within Block B2 of Lubu.

 

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