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Fine gold explained

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Fine gold explained

What is fine gold and how do we make our gold fine? This was yesterday’s biggest concern after the recent announcement by the Reserve Bank of Zimbabwe of the forex retention increase for gold submissions.

The RBZ increased forex retention from 55% to 70% a move positively received by miners. The Bank also announced that its entity Fidelity Printers and Refiners (FPR) will pay 100% USD for fine gold pegged at 45us$.

Mining Zimbabwe spoke to legendary Miner Engineer Chris Murove who shed light on the process of attaining fine gold.

“Every miner including the ASGM will still take their impure gold to Fidelity in the form they have been doing it, whether smelted or as toast. Fidelity will determine the amount of pure (or fine) gold in the miner’s bullion and they pay accordingly” Murove said.

On his thoughts on the 100% hard currency payment for fine gold introduction, Eng Murove said, “The move by Fidelity to pay the small scale miners 100% hard currency will incentivise miners to shun the parallel market in favour of the formal market which is Fidelity. However, Fidelity should not keep the price static, but when it rises on the world market, they should follow suit and when it drops, they should maintain the floor price of $45 to support their producers”.

Norton Miners Association Chairman Mr. Privelage Moyo miners will definitely go for fine gold as equipment and products used for operations require US dollars.

“It is better to get all the funds in USD as it is the preferred mode of payment and it is stable. We no longer have to worry about the depreciation of the local currency and converting our rtgs to ridiculous rates to buy USD’s. Going for 70/30 means one gets only 10-15% of the 30% in actual value when converting the rtgs to USD which is what we as miners were complaining about all along” Moyo said.

Prior to the forex retention increase Fidelity was paying 55/45 which expert say contributed to a thriving illegal gold buying market.

In January the Gold Mobilisation National Taskforce handed an explosive gold smuggling report that details well-knit gold smuggling by a coterie of gold buying barons, which is costing Zimbabwe billions of United States dollars. The precious metal is being smuggled mainly to South Africa, which is then used as a gateway to global markets.

Zimbabwe is losing an estimated 70 tonnes of gold to the parallel market every year as licensed buyers channel most of their output to the informal market. It is most probable miners will go for fine gold due to the disparity between the official USD to zwl rate and the parallel market rate.

SA mine reports 164 cases of Covid-19, shuts down

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SA mine reports 164 cases of Covid-19, shuts down

AngloGold Ashanti Ltd. has reported 164 cases of the novel coronavirus among its workers at a gold mine in South Africa, raising new questions about how to prevent the virus from spreading in deep underground mines.

The cases were discovered at Mponeng, the world’s deepest mine, where operations extend as far as four kilometres beneath the Earth’s surface.

In response, the company has temporarily closed the mine and begun tracing the contacts of those who tested positive, using an electronic tracking system. It says the “vast majority” of those who tested positive are showing no symptoms of illness.

The new outbreak is by far the largest number of cases detected at any South African mine so far. It has tripled the total number of cases in the country’s mining industry, which until Sunday had reported 85 cases.

South African union leaders, worried about the difficulty of physical distancing in underground mines, have called for the testing of all workers before they return to work. But the industry says this would not be feasible because of a shortage of test supplies.

About 450,000 people are employed in South Africa’s mining sector. The country is among the world’s biggest producers of gold and platinum.

To help protect workers from the virus that causes COVID-19, South Africa’s underground mines were limited to 50 per cent of normal capacity when they were allowed to reopen in mid-April after the first phase of the country’s lockdown. But many mining companies have been pushing for a full reopening, saying they cannot be profitable at half-capacity.

In a speech Sunday night, President Cyril Ramaphosa announced that mining and most other economic sectors will be allowed to reopen fully on June 1, as long as they screen their workers and take other precautions. But he also warned that the risk of a “massive increase in infections” in South Africa is now greater than ever.

Other outbreaks of coronavirus in South Africa’s mining sector have included 34 cases at the Dwarsrivier chrome mine, owned by Assore Ltd., and 19 cases at the Marula platinum mine, owned by Impala Platinum Holdings Ltd.

AngloGold Ashanti, in a statement on Sunday, said it detected its first coronavirus case last week. Since then, the South Africa-based company has conducted 650 tests among its workers, with only a handful still awaiting results. This means that about one-quarter of the tests were positive – a much higher rate than anywhere else in South Africa’s mining sector.

At the Dwarsrivier mine, for example, about 6 per cent of tests were positive. For the industry as a whole, 85 cases were reported from 3,035 tests, for a 3-per-cent positive rate. One death has been reported among those who tested positive.

Nearly 200,000 mine workers have been screened before returning to work so far, according to the Minerals Council South Africa, which represents the industry.

Screening, however, is a process that checks primarily for illnesses or other symptoms of the virus and has difficulty in detecting asymptomatic cases, unless they are contacts of someone who tested positive.

Thuthula Balfour, head of health at the Minerals Council, told a media briefing on Friday that the testing of all workers would not be a “panacea” to protect mines, since a worker who tests negative could be infected the next day. It would be impossible to test 450,000 workers every day, she said.

There are limited testing resources in South Africa, and it would be unfair for the mining industry to monopolize those resources, Dr. Balfour said.

The industry, however, is searching for ways to expand its testing capacity, she said.

South African media have reported that some mining industry leaders are frustrated in the delays in obtaining coronavirus test results from South Africa’s health laboratories and are looking for ways to speed up the process with their own testing processes.

The National Union of Mineworkers, one of South Africa’s biggest unions, said last week that it was worried by the growing number of COVID-19 cases in the mining industry.

“Workers cannot be sacrificed for profits during the crisis,” the union said, urging its members to refuse to work in any mine where strict measures are not imposed to protect them from the virus.

South Africa’s Labour Court, in a ruling this month, has expressed similar concerns. “Whether in moving between entrances or exits to different parts of a mine, in underground cages, in transport to and from mines, or in mine dormitories, it is impossible for mine workers to avoid contact with others who may be infected,” the court said.

Fidelity forex retention adjustment, fine gold, miners speak out

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Fidelity forex retention adjustment, fine gold, miners speak out

THE Reserve Bank of Zimbabwe yesterday announced that forex retention for gold had been revised up from USD 55% and 45% rtgs to USD 70% to 30% rtgs. The Apex bank also revealed that Miners will be paid 100% USD for fine gold.

In a statement, FPR general manager Mr. Fradreck Kunaka said the new gold trading framework was with effect from 26 May 2020.

“Gold producers shall be paid under a 70/30 payment arrangement scheme in terms of which 70 percent of the gold sale proceeds shall be paid into the producer’s Nostro account and the balance of 30 percent shall be paid in local currency at the ruling exchange rate into the producer’s ZW$ account,” he said.

The move was received with mixed feelings but overally miners agreed it is a step in the right direction.

Legendary miner Eng Chris Murove said it was a positive move and it is plausible that government heeded miners, call.

“Its a step in the right direction and the government has finally heeded our call and I foresee deliveries to Fidelity improving”, Murove said.

Another miner said,” While I welcome the increase, there is still a catch why cap the Price at a flat fee of us$45/g when world prices are soaring on the world market.

Another added, “World price is (currently) 55usd per gram. We are getting 45usd per gram, which is in reality 80% of the world price. While we appreciate the efforts they are still a far way off 100%, no matter how it is worded”.

The most outstanding question yesterday was what is fine gold and can small-scale miners produce fine gold?

What is fine gold and can ASM produce it

Fine gold is the total weight of gold without any impurities and it is only attainable by refining. ASM produce gold raw bullion which has to be refined to produce fine gold. A gold refinery receives the raw bullion and re-liquefies the metal in a hot furnace, then adds various chemicals to the molten substance to separate the gold from the other metals.

We have written a lot of articles about this and finally, someone has listened. The Elephant in the room has finally been addressed however the area of concern now is the 30% rtgs payment. The disparity between the official USD rate and bank rate vs the parallel market rate needs to be fixed to solidify Fidelity’s market share.

 

 

 

 

Fidelity adjusts gold price, now pays 100% usd for fine gold

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Fidelity adjusts gold price, now pays 100% usd for fine gold

Fidelity Printers and Refiners, (RBZ’s gold buying unit) has adjusted gold buying rates to 70%usd and 30%rtgs. The RBZ announced that Fidelity will be paying 100%usd for fine gold pegged at a flat fee of 45usd/gram.

Mining Zimbabwe could not get a comment from Mr. Kunaka as he is currently in a meeting.

See the document below:

 

Demystifying community entitlement of Mining proceeds in Zimbabwe

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Demystifying community entitlement of Mining proceeds in Zimbabwe

There is a general challenge in Zimbabwe regarding the relationship between some mining companies and communities in which they are situated.

By Edmond Mkaratigwa (MBA in Energy and Sustainability and Chairperson of the Parliamentary Portfolio Committee on Mines and Mining Development) & Albert Maipisi (Ph.D in Disaster Management).

The debate rages around whether mining companies are doing reasonably enough in their efforts of ploughing back part of exploited natural resource proceeds to communities in which they exist. The community has been defined as the area of operations cognisant that the society is catered for through tax obligations remitted and boosting the fiscus annually. Voices continue to rise from local communities and most thriving mining companies also have voluntary initiatives through which they give back to or support communities. Those initiatives are commonly known as Corporate Social Responsibility or Corporate Social Investment programmes whatever the nomenclature.

Advances in calls demanding for something more meaningful from mining companies are increasing. Non-governmental organisations, community-based organisations and particularly the more educated hailing from those communities are increasingly registering dissatisfaction. With the advent of the social media platforms and specifically in their Whatsapp groups and on group Facebook platforms, they are debating. Insightfully, some of these groups have more rights conscious participants in them domiciled in the country or foreign lands, with varied experiential exposures. Communities are getting more enlightened and to some extent are raising pertinent issues regarding the nature of their relationship with mining companies operating in their surroundings as well as expectations.

Other groups are still holed in support of the old dreaded Indigenisation and Empowerment Act utopia while others have a more liberal mind yet desiring to see an improvement from the prevailing. The major standpoints raised in support of the views converge on common concerns. Minds meet on the realisation that there are rampant environmental damages as a result of the nature of mining works. Especially through the cutting of trees, pollution of both air and natural water resource bodies, noise as well as shocks to property as a result of mine blasts. In the same vein, land used for mining is viewed as could have been used for other community livelihood options. Yes some have their own employed in the mines while others always demand their employment in-spite of their professional capacities. Further, social services infrastructure for health, water, and sanitation among others, have to some extend been improved or established through local existence and ‘providence’ of those corporates.

Access to more social services such as education has been improved to some, while the mass gathering as a result of the existence of mines has further created thriving and sustainable business hubs. In one group discussion, it was raised that there was a looming clash between a mine and the community. The clash emanated from the view that the mine has been buying vegetables from the nearby urban area for its canteens yet those were produced in abundance by local farmers in the rural community surrounding the mine. The observation raised tempers although some among the social group members were of the legal opinion that mining companies are private entities hence can buy from whichever market in the choice world. It is true but the social license of some of those companies is already being weakened whether the community will implement options that they agreed to consider for addressing that perceived anomaly or not.

In the same vein, the fact that mines are operating using heavy equipment and machinery with employees believed to be modestly rewarded and driving state of the art cars paints another image in the minds of poor communities surrounding the mines as well as their sympathisers who may be living outside that community permanently or temporarily. It is not easily understood by the ordinary person that mines as entities sometimes fail to have excess resources to plough back to those communities as social responsibility or investment. The same case was also witnessed where a mining company had a debt obligation it was servicing for around five years. The company has previously been an ardent corporate social responsibility or investment implementer. Due to business downs and turns, and the around five-year loan obligation for recapitalisation and expansion, it could not fulfill the expectation that was already planted and blossoming among the community members. That set the company on a sad plinth because all else on site is viewed as normal yet the books of accounts are silently speaking differently.

The dilemma around the immediate last case pierces the veil of current corporate social responsibility or investment approaches too. The approaches appear not durable and unsustainable, which restores the mind in some communities that the Indigenisation Act had its other bright than dim side alone. On the other hand, the case of vegetables which were procured from an urban market than locally raises the debate around which season was being referred to. Interrogation on seasonality goes back to the nature of rural community gardens which are usually seasonally productive. In that mind, whereas initiatives are in place and sometimes gardens established through corporate social responsibility or investment initiatives, the picture painted is that they are also not sustainable.

The two cases reveal weaknesses in the sustainability of the vehicle that funds the corporate social responsibility or investment initiatives as well as failure to establish sustainable livelihoods in the mining communities. Where corporate social responsibility and investment has been implemented more religiously, it has curbed appetite for governments and local communities to implement more radical demands on companies to implement more durable initiatives. The failure of these companies to implement such initiatives is sometimes perceivably attributed by communities, to corrupt or weak government leadership yet market economies should be freer as people get in business and choose investment destinations by their own choice. Nonetheless, it is not known what the growing consciousness of those communities means for the future of mining investment in Zimbabwe.

Questions often raised in those platforms further delves into the state of Community Share Ownership Schemes previously established in different mining communities in Zimbabwe. Ironically, the share ownership is all about equity participation, and yet there are no dividends hence the mystery being demystified. In many cases, it has not been clear whether these vehicles are still funded although some perceive the share certificates issued thereof were mere billboards. Questions arise again on what was happening to the prior funds invested in the schemes. Nevertheless, there are different views and perceptions postulated from different quarters although in the broader context accusations and mudslinging takes centre stage.

Dynamics on changes in mode and mechanisms for ploughing back to the communities have created that fog and friction but the core fact remains. It is the community demanding for what they perceive as their share from the corporates which have presumably accepted that demand by initiating those corporate social responsibility and investment initiatives. In South Africa and India where the community has been aggressive, violent, mobilised, and conscious, more market-based initiatives for securing mining companies’ social licenses have been advanced and implemented. Further, the fact that mining companies are implementing their initiatives at company level is also shifting to trusts that are more of investment vehicles which are remarkably sustainable and whose life span over many years post-mining. Where a group of mining companies establishes a trust, they have managed to invest their finances in line with their different company philanthropic philosophies and missions yet with a small high-tech administration team dedicated for that purpose.

Published ideas are entirely views of the two authors as academics and cannot be attributed to their positions.

Putting the mining sector economic stimulus package to effective use

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Putting the mining sector economic stimulus package to effective use

In lieu of the burden that has been set upon the Mining Sector, and the Zimbabwean economy at large, by the Covid-19 pandemic, His Excellency, President Emmerson Mnangagwa, on 1 May 2020, announced a Zwl$18 billion Economic Stimulus Package which is hoped to cushion domestic businesses and keep the economy invigorated through the slump.

By Daniel Nhepera

According to a document generated by the Chamber of Mines of Zimbabwe in March 2020, the mining sector is likely to take revenue losses in excess of US$400 million in the second quarter of 2020 alone. This would be a substantial loss, equating to 14.8% of the total mineral earnings achieved in 2019 (US$2.7 billion) and 10% of the forecasted mineral earnings for 2020 (US$4 billion).

Notwithstanding the fact that the mining sector has consistently been Zimbabwe’s biggest foreign currency earner (averaging above 60% in the past three years), the sector was only apportioned 5.6% of the Stimulus Package, Zwl$1 billion. According to details given by Government, the mining sector package will go towards financing the completion of development works on the Mining Cadastre system – a computerized system for the management of all mining-related administrative tasks. The fund will also buttress efforts towards the resuscitation defunct gold mines, the reduction of application fees and annual rentals, and the ring-fencing fuel and power for the mining sector.

It is of note that the announcement of the Stimulus Package by Government does not infer a specially designated Zwl$1 billion kitty in wait at the Reserve Bank of Zimbabwe to be drawn down by mining companies. As it happens, the Government may have to make the funds available, in tranches, through domestic or foreign borrowing, or the printing of money. Although likely to encumber Zimbabwe’s already strained debt overhang, foreign borrowing is rather the blueprint in times of such strife, with Nigeria and South Africa already in talks with the various International Financial Institutions over rescue packages of US$6.9 billion and US$4 billion, respectively. Avenues to foreign loans are not as straight forward for Zimbabwe, however, and so Government will be at straits to come forth with the Economic Stimulus Package. It is therefore within all mining sector stakeholders’ interests for the mining portion of the Stimulus Package to be put to effective and strategic use to achieve the intended objectives of giving respite to mining companies while also permeating welfare relief to the Zimbabwean citizenry.

This resolve raises a need to interrogate whether the use of the Stimulus Package in funding the completion of works on the Mining Cadastre system bares the promise of immediate and necessary monetary or welfare gains. Although the system will go far in improving the ease of doing business in the mining sector, while also crucially providing security of mining title, which will cultivate more appetite for mining investments in Zimbabwe, the gains from these advancements may not be immediately tangible, nor quantifiable. It is also curious as to why the Cadastre system, whose developer was since identified and reportedly funded in 2016, has taken so long to complete. In 2019, there was a further commitment made by Treasury to avail US$2 million for completion of the project, which was then promised to be ready by 2021. It, therefore, comes as a surprise that the Ministry of Mines and Mining Development is again seeking to finance the Cadastre system with funds from the Stimulus Package.

In comparison, the South Africa Department of Mineral Resources’ online platform, the South African Mineral Resources Administration System (Samrad), was announced, designed, built, and rolled out all in the same year, 2011. The building process came with the benefit of an audit of all prospecting and mining rights in the country as part of the data clean-up process, something which would be most welcome in Zimbabwe given the numerous double-pegging disputes that provincial mining offices are perpetually flustered with. Mining stakeholders and prospective miners in South Africa enjoy the convenience of remotely viewing the locality of all mining applications, rights, and permits made and held in South Africa, thereby allowing for applications to be submitted and administrative processes to be handled electronically.

Creditably, Government has identified the need to ring-fence fuel and power for the mining sector, which is up the alley of necessities fundamental to keeping the mining sector ticking in the midst of depressed markets. Along with the ring-fencing of fuel and power, the availing of funds to sustain the importation of mining consumables, equipment, machinery, and spares, for both running operations as well as capital projects is equally imperative. This would assist in maintaining mining operations at current levels, guaranteeing mineral exports for Government, albeit at the mercy of depressed global prices.

In this light, recollections can be made to the Mining Continuation Reserve (MCR) and the Mining Projects Fund (MPF) which were administered by the Reserve Bank of Zimbabwe on behalf of the Government between 1980 and 1990. The purpose of the funds was to ring-fence foreign currency allocations to the mining sector for the purchase of mining inputs, mining consumables and spares (MCF), as well as financing the establishment of capital projects (MPF). Although perpetually underfunded, the funds are still credited for sustaining the mining sector in Zimbabwe in a period where mining was in recovery following the 1970s dip on account of the War of Liberation. The funds also assisted in sustained gold exports through the spectacular peak and trough of gold prices between 1980 and 1986.

Offering such support to the mining sector would however require the Stimulus Package to be availed in foreign currency for the most part. This is where pitfalls may appear. This fate is dependent on Government’s source for the Stimulus Package funds, and with the likelihood being that the funds will either be from domestic borrowing or quantitative easing, there is not much promise of the mining sector rescue fund being presented in foreign currency.

Nonetheless, there is still an opportunity for the Government to make impactful use of the Stimulus Package, in domestic currency, as a means to improving the welfare of communities directly within the catchment of operational mines. This may be achieved by placing policy for the mines, large scale or small, to engage more with local upstream and downstream business, while Government simultaneously finances and provides support to the businesses for them to meet the supply requirements of the mines in quantity and quality. Indeed it is peculiar that this approach would look to intensify the welfare benefits of mines on local communities without actually providing financial support to the mines themselves, but empirical studies have provided backing to the proposition.

“One such study was a 2013 paper on Yanacocha, a large scale gold mine in Peru considered to be the fourth biggest gold mine in the world. The authors of the study identified that following passing of a national local content policy by the Peruvian Government in the year 2000, there was a massive improvement in household-level welfare for residents within a 100-kilometre radius of the gold mine. This was following an upsurge in demand for products and services provided by locally owned businesses, such as high and low skilled workers, cleaning materials, catering, protective gear, chemicals and construction products, among others. By measurement, a 10% increase in the mine’s demand for local inputs was found to correlate with a 1.7% increase in real income per capita within the mine’s catchment area. Such findings are the basis of the push for a mining sector local content policy in Zimbabwe which has been valiantly pursued by the Confederation of Zimbabwe Industries.

Abstract as the approach may be, effective deployment of the local content policy may be one means by which the Government may make the most of the relief funds it garners, towards the objective of improving and sustaining the welfare of Zimbabwean citizens, particularly in mining areas. The mining areas are largely in the hinterlands all the same, where welfare relief is most needed. Combined with the adoption of appropriate variations of the Mining Continuation Reserve and Mining Projects Fund, there is scope for Government to see to the effective use of the Economic Stimulus Package in the mining sector.”

Miners donate groceries to Kadoma families

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Miners donate groceries to Kadoma families

Kadoma Miners Association through, National Environment Awareness Trust (Neat) brought smiles to over a hundred families from Rimuka township in Kadoma when they donated food hampers worth thousands of USD.

By Rudairo Dickson Mapuranga

The donations came at a time many people in the country are struggling to make ends meet due to the lockdown measures which have affected many businesses especially the generality of Zimbabweans who survive from hand to mouth.

According to the founder of NEAT who is also Zimbabwe Miners Federation (ZMF) Youth in Mining chairperson Mr. Timothy Chizuzu miners came up with this initiative to give people hope that there will always be life after the pandemic.

“The impact of Covid-19 is a horror to all the nations as it has crippled economies, negatively affecting the generality of the public. The pandemic might have crippled economics but won’t kill our hope. The reason why we came up with this initiative, is a reminder to people that there is always life.” He said.

Chizuzu said that his organisation (NEAT) approached the Kadoma Miners Association so that miners give back to the community.

“As an organisation, we approached the Kadoma Miners Association to extend a helping hand to donate grocery hampers to at least 100 families in Rimuka Kadoma.” Said Chizuzu.

NEAT managed to identify the disadvantaged and the needy through the help of community organisations such as Runyararo Children’s Trust, PAPWC Zim, Action Children Plus, and other leaders in Rimuka.

Companies such as Tshuma Milling, Mrasta Mining, Sack 4 Mine, Gwanzura Mines, Tichheadly Mine, and Cossy Trading contributed.

Artisanal, Small-Scale Miners Need Support

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Artisanal, Small-Scale Miners Need Support

The Zimbabwe Environmental Lawyers Association (Zela) has urged the government to focus more on giving back to the artisanal and small-scale mining sector during the coronavirus-induced lockdown by ring-fencing gold royalties to fund personal protective clothing and hand sanitisers.

The government imposed a national lockdown on March 30 to contain the impact of Covid-19. The pandemic has resulted in hundreds of thousands of fatalities globally and has wreaked havoc on economies worldwide. The country had 46 confirmed cases of Covid-19 with 13 recoveries and four fatalities as of Tuesday this week.

The association said there is a need for the government to facilitate “capacity building programmes for ASM players on safety, health and environment to help remove the culture of non-compliance with public health, safety and environment standards and in particular the use of the PPE and applicable laws.”

Following the exemption granted to small-scale and large scale mining companies, Zela added that civil society groups should continue monitoring and publicly reporting on the level of implementation and compliance on safety and health measures by mining companies and small-scale players in preventing and containing Covid-19 as stipulated by law.

The association also added that the government should monitor smuggling and illicit financial flows.”There is need for the government to closely monitor airports and borders to ensure that there is no smuggling of gold, diamond and other minerals out of the country. In turn, airlines still flying into the country should undertake due diligence measures to identify any risks of exposure to smuggling and illicit financial and mineral flows.”

The government was also encouraged to conduct effective Covid-19 screening and testing to reduce the spread of the virus in mining communities during the lockdown.

Source: Zim Independent

Lock-down hinder the import of forex to buy gold

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Lock-down hinder the import of forex to buy gold

Zimbabwe’s Apex Bank is failing to ship in enough foreign currency to pay for gold purchases, a miners’ group says.

Fidelity Printers & Refiners (FPR), the central bank unit which is the country’s sole gold buyer, cannot import US dollars via air due to global travel restrictions. This is according to the Zimbabwe Miners’ Federation (ZMF), which represents small scale miners, in a letter to members on Thursday.

“Pursuant to our meeting with FPR today, kindly be advised that FPR relies mostly on foreign exchange brought in by air transport. Due to the COVID-19 pandemic, there has been a limited number of flights into the country and this has adversely affected their operations,” said Wellington Takavarasha, chief executive officer of ZMF.

“Kindly bear with FPR whilst they are making frantic efforts of ensuring that all the gold deliveries are paid for. By next week, we expect the situation to have normalised. Once again, as ZMF we sincerely apologise to our hard-working miners who have been adversely affected by this phenomenon.”

Flight bans have grounded many airlines and cut the number of flights into Zimbabwe, which has itself restricted flights to cargo and selected passenger airlines.

Gold producers in Zimbabwe keep 55% of their sales proceeds in foreign currency. The remainder is sold on the official currency market rate.

Miners had already been suffering from delays by the RBZ to remit the forex portion of gold sales.

COVID-19 impact

In March, the Chamber of Mines said Zimbabwe could suffer a 60% fall in mineral output in the second quarter and lose over US$400 million in mining revenue due to the impact of the coronavirus.

Zimbabwean miners, both large and small scale, have continued operations during the lockdown which began late March. But they are seeing the disruption of critical supplies, a dip in commodity prices and difficulties in moving output to market due to global freight restrictions.

Zimbabwe’s annual gold output fell 16.8% to 27,6 tonnes in 2019, coming off its record highs in 2018, as producers battled with power cuts and the currency crisis.

Newsday

Implications of the COVID-19 and the recent lockdown lift on the Zimbabwean Artisanal and Small-Scale Mining (ASM) sector

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Implications of the COVID-19 and the recent lockdown lift on the Zimbabwean Artisanal and Small-Scale Mining (ASM) sector

Initially, the ASGM sector had been rendered non-essential, and operators were placed under lockdown with other non-critical sectors. However, miners and other stakeholders advocated for an exception, articulating the sustainability challenges arising from the lockdown, and the pivotal role occupied by mining in economic development. Over 200 miners applied for exemption through the umbrella small-scale mining body Zimbabwe Miners Federation (ZMF), and the exemption was granted. However, now all mining operations have been granted permission to operate.

By Pact Zimbabwe

COVID-19 has had an impact on international gold prices which have been moving positively since the last week of March. The price of gold per ounce has steadily risen to a new peak of over USD 1 700 in over five years, with the precious metal regaining popularity as a store of value in the face of a depressed investor market and global economic recession. Unfortunately, other aspects of the mineral supply chain have not had such positive effects. Mining equipment spares are difficult and expensive to procure as a result of the global lockdown.

The effects of the lockdown include limited to no access to mercury in some districts of Zimbabwe. Where it is available, mercury may cost up to USD 10 per teaspoon, resulting in increased costs of operations. Reduced use of Mercury has however benefited the country in terms of adherence to the Minamata Convention, whose provisions aim to restrict the trade in mercury to curb rising global emissions.

Linked to the above, Pact Zimbabwe has made efforts to pilot a prototype mercury-free plant to service the ASGM community, in partnership with the government of Zimbabwe led by the Ministry of Mines and Mining Development in collaboration with EMA, United Nations Development Program (UNDP) and the Zimbabwe Environmental  Lawyers Association (ZELA). Unfortunately, work on this has been stalled by the COVID-19 pandemic.

An opportunity for the sector also exists in Fidelity Printers and Refiners (FPR) being able to re-examine its ASM gold buying model and forex retention policy, given reduced parallel market activity. FPR, however, needs to ensure its agents are operating per the WHO guidelines and that they have the resources to procure all the gold being mined leading to an improved fiscus.

Food insecurity is a growing concern among artisanal and small-scale miners as well as communities sustained by mining, with most still living from hand to mouth. Unfortunately, many of the miners do not qualify for the government-led food assistance programs. When viewed through the lens of Occupational Health and Safety (OHS), the confined and close working conditions inherent in mining increase the risk of infection among artisanal and small-scale miners and their surrounding communities. Most ASM sites are characterized by poorly ventilated, labour-intensive operations with a significant workforce suffering unknowingly and knowingly from respiratory diseases like tuberculosis and silicosis. The latter further compromising their immune system.

Some informal elements within the sector are highly nomadic, posing dangers as well to the broader ASM community. Traders, appearing higher in the gold supply chain are not excluded, exacerbating the risk thereof as they move from mine to mine to buy gold in exchange for hard cash. What makes the ASM crisis further unique is that most of the workforce have no health insurance coverage and the sector is in dire need of support to pull through successfully amidst the COVID crisis.

Given the discussion above, Pact Zimbabwe makes the following proposals for basic precautionary measures  to be adopted by the general ASM populace:

Please note that this list is neither exhaustive nor does it replace any medical advice. It merely serves as a tool to contextualise how best AMSs can mine safely in the face of the COVID-19 health threat. It can serve as foundation to the initiative to develop Standard Operation Procedures in the face of a COVID-19 lockdown.  All other non-COVID related safety measures still need to be observed to avoid production downtime and fatalities which will further exacerbate the crisis.

  1. If not already in place, set up a Safety Health and Environment (SHE) Committee comprising of a few employee representatives to identify and close any gaps relating to all health and safety problems encountered at the work-site. This can be achieved through constant monitoring for adherence to laid out SHE procedures. In addition, a COVID-19 committee can be set up to maximize effective COVID-19 risk management by focusing on any COVID-19 matters of concern. Both committees’ roles are to facilitate information sharing and communication with the SHE Committee.
  2. Institute mandatory temperature screenings of the workforce to detect infections early. Consider procuring at least one thermo-scanner and seek advice from your local medical facility on how to interpret the readings.
  3. Always keep a record of personnel on the various shifts on-site in case any contact tracing needs to be carried out. This is also an important step towards formalizing the mining operations.
  4. Create a supportive environment that encourages the workforce to disclose if any of their contacts are being treated for COVID-19 or if they suspect anyone under their care to be showing initial signs of suffering from the disease.
  5. Before any work shift begins, everyone present should participate in daily Safety, Health, and Environment talks that prioritize the issue of the COVID-19 pandemic. Ensure everyone fully comprehends everything to do with the disease including its management.
  6. Mine personnel are encouraged to wear recommended reusable/washable face masks to avoid unknowingly inhaling the virus or unknowingly spreading the virus during the incubation period as a carrier. If store-bought masks are hard to get, multi-layered face cloths are recommended by the Centers for Disease Control and Prevention (CDC). It is important to know that not all mask types are recommended. These masks should always be tightly, or else appropriately worn and great care must be taken not to accidentally touch your mouth, eyes, and nose when removing as the virus might be trapped on exterior surfaces. Immediately wash hands with soap and running water after removing
  7. Wherever possible miners should practice social distancing at the workplace and minimize sharing and exchanging of equipment without good hygiene practices. This might entail downsizing operations to minimize crowding at any given time. Or if previously one shift was operational, miners can split the workforce into manageable shifts throughout the 24-hour production cycle. This promotes social distancing and reduces the transmission rate.
  8. Prepare an emergency response plan. This entails having a designated isolation area and a readily accessible emergency medical contacts of ambulance services or designating a vehicle to be used to ferry the victim to seek medical attention and immediately fumigate all premises that might have been toured by the victim within the past 24-48hours before temporarily restricting entry to those.
  9. Disinfect yourself after spending considerable time in a crowded place by removing and laundering all your outdoor Personal Protective wear and immediately taking a bath with soap and water.
  10. Have in strategic places, running water and soap (whether laundry, bath, or detergent soap). In instances where soap and running water are not easily accessible have in place a good supply of an alcohol-based hand sanitizer, however, this should never replace hand-washing with soap and running water.
  11. Appoint a team or individual who disinfects surfaces (including chairs, light switches, tables, door handles, counter tops, doors, toilets, sinks, taps, etc) and equipment throughout the shift. Disinfecting methods should depend on the equipment or surface under consideration but generally soap, household disinfectant, bleach, or ultraviolet lights should serve the function.
  12. Social distancing regulations must always be maintained.
  13. As far as possible discourage visitors at the mine and this can be conveyed using simple visible posters and signage. If it is not possible to eliminate visitors, make all necessary measures to screen them for high temperatures, and sanitize them at point of entry. Remind them with the aid of signs to observe high levels of hygiene throughout their visit. Remember to document all visitors in a logbook for security purposes and contact tracing if necessary.

Pact Zimbabwe stands in solidarity with the nation and the artisanal and small-scale mining community. Pact has maintained an open dialogue with its shareholders and provided technical advice on how to keep safe during the COVID-19 crisis. The ZAAMP project periodically provides situation updates on how the pandemic is impacting the ASM sector. Pact implores the miners to contribute in whatever manner they can to their communities through resource mobilization and information sharing regarding COVID-19. Pact continuously calls upon the Large-Scale Mining (LSM) community to support the ASM community technically and financially in fighting this disease. Likewise, the government through its various departments must support and not present obstacles in the fight. This should include among other things the development of Standard Operating Procedures to be adopted by ASMs. All miners must have and act upon the most up to date information of the COVID-19 pandemic which can be accessed on the widely advertised 2019 toll-free number in addition to websites such as WHO and CDC.

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