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Chitando urges ASM to join ZMF

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Chitando urges ASM to join ZMF
The Minister of Mines and Mining Development who is also Zimbabwe Miners Federation (ZMF) patron has urged Artisanal and Small Scale miners to be part of the Federation of small scale miners for their voice to be heard.
Rudairo Dickson Mapuranga
Speaking at the signing ceremony between ZMF and  CBZ holdings, CMED and AliJapan789  the Minister applauded Henrietta Rushwaya led ZMF for working closely with the Ministry through good communication strategy.
Chitando said organisations who wish to be engaged by the Ministry should either be under ZMF or the Chamber of Mines.
“Success is anchored on the good communication between miners representative bodies, the Chamber of Mines and Zimbabwe Miners Federation. I applaud ZMF for being always there. We have some players asking for intervention, I encourage them to join one of these two organizations because they represent the interests of miners in the country.” Hon Chitando said.
The Minister said his Ministry was working flat out to ensure that the mining sector achieves President Emmerson Dambudzo Mnangagwa’s vision to become upper-middle-income earner by 2030 and the groundwork to achieve the vision has been clearly set out with various developments taking place.
“Economic development is not an event. The groundwork for the achievement of the vision by H.E. has clearly been set out including mining. Specific to the mining sector we have various development taking place. The mining sector is slowly moving towards the optimum extraction of its mineral resources. By the nature of its geology, small scale mining is as equally important as LSM.”
To achieve the USD 12 billion roadmaps Chitando said the government will soon unveil capacity building programs aimed at fully equipping miners to extract and add value to the economy.
“Government will soon be unveiling other capacity-building programmes to ensure that miners will fully extract and add value to the economy. ZMF will be heavily involved. It is happening, it’s in the pipeline” Hon Minister Chitando

ZMF sign ground breaking growth and development deals

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ZMF sign ground breaking growth and development deals

Rushwaya led Zimbabwe Miners Federation (ZMF) has signed three small scale and artisanal mining growth and development deals with CBZ HOLDINGS, CMED and AliJapan786 Zimbabwe Private Limited in an endeavour to see the mining sector achieving USD 12 billion by 2023.

Rudairo Dickson Mapuranga

As part of its formalisation exercise, the Federation has partnered with these firms for them to fill in the logistics gaps for small scale and artisanal miners to ensure that mining growth and development happens. The partnerships will cover, gold buying, fuel scheme for small scale miners, vehicle loan scheme, and mining mechanisation programs.

According to ZMF President Ms Henrietta Rushwaya, the Federation body of small scale and artisanal miners has committed themselves to make sure that ASM aid the Minister’s vision for the mining sector achieving a USD12 billion industry by 2023.

“As the Zimbabwe Miners Federation, we take note of the work the ministry is doing, we have taken it upon ourselves that the 12 billion road map is attained,” Rushwaya said

Gold buying

The Federation according to Rushwaya will enter into a tripartite agreement with an investor identified as a partner to buy gold from the artisanal and small-scale miners and CBZ, the Federation has identified 4 districts where gold buying offices will be set up and commissioned.

“As part of our formalization exercise, we have incorporated CBZ as our banking partner, we have our small-scale miners who work hard to ensure that Zimbabwe develops.”

“ZMF will acquire gold buying permits, identify agents, and set up gold buying offices for all the mining districts. Cash will be accessed from CBZ branches. Personnel at all the ZMF gold buying centres will hand over any bullion transacted equivalent to cash disbursed to CBZ-ZMF vaults for transit to Harare.’’ She said.

Rushwaya also said that ZMF as a registered gold buyer will help in curbing leakages by buying gold in even the remotest areas. The association will buy as little as a point of gold which is shunned by other buyers.

“Allow us to help in the gold mobilisation exercise, as such we have taken it upon ourselves as ZMF that we try to reach to all areas that fidelity has not been able to reach, we can collect as little as one point of gold. One point collected from as many as 2000 miners can be of significance to the national fiscus,” said Rushwaya.

CBZ Holdings through its Executive Director Lawrence Nyazema said the partnership was important in the growth of the small-scale and artisanal mining sector. In his remarks, the CBZ Executive Director said his company was prepared to see the formalisation of the small-scale sector.

“We do not take for granted the opportunity that we have been given to be your partners. As CBZ, we see this as the beginning of a long-standing relationship.  When we look at our group, we are structured in a way that when miners have the fuel, when you are being paid your cash, we will then look at the next stages of your life. As Zimbabweans, we should be asking ourselves, until when are our small-scale miners going to be seen at the bottom end of society when they generate over a billion USD dollars every year. So we would want you to start generating wealth for your future families,” said Nyazema.

Fuel scheme for small scale miners

“ZMF shall be using CMED facilities dotted around the country to supply fuel to its members. The fuel will be dispensed from CMED fuel depots around the country. CMED will print coupons uniquely marked with ZMF logos. These will be sold from designated ZMF offices/agents”

Vehicle loan scheme

ZMF General Council Chairperson Makumba Nyenje has confirmed that at least 200 vehicles including mining equipment from Alijapan in the country are expected in the country before this December.

The payment will either be in hard currency or gold as per contractual terms.

Zimplats revenue, production soar

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Zimplats revenue, production soar

A good work ethic and a sense of accountability in the running of Impala Platinum’s Zimbabwe subsidiary, Zimplats, are some of the factors that have ensured solid financial returns for the company despite the unfavourable socio-economic conditions in that country.

This is according to Nico Muller, the CEO of Implats, which has a 87 percent stake in Zimplats.  For the full 2020 financial year, Zimplats lifted revenue by 38 percent year-on-year to $868,9 million, while production of platinum concentrate rose.

Zimplats operates underground mines and a concentrator at Ngezi in Zimbabwe, while its Mimosa Mine is jointly owned by Implats and Sibanye-Stillwater.

Zimbabwe has endured a long period of economic decline, with currency shortages and high inflation rates.

Muller, speaking at the Jo’burg Indaba, a gathering of mining industry leaders and investors, said some of the contributing factors to the group’s good story was the mechanisation of operations and employer-employee dynamics within the company.

“If I look at the relationship between the CEO of Zimplats and his management team down to employee level, I think there is much lower hierarchical structure and there is also a much clearer sense of purpose and accountability.”

Given Zimbabwe’s high unemployment rate, people are very proud to be associated with a company that is performing well, something which has benefited the mining group over the years, he said.

“They are very proud of their jobs.”

The Government in April granted Zimplats permission to continue operating its mining and processing facilities during the lockdown period. However, the operating conditions in Zimbabwe are not without challenges.

In its recent financial statements, Implats noted that fiscal legislation in Zimbabwe is “volatile, highly complex and subject to interpretation”. Zimplats has, for example, been subject to a review of its historic income tax returns. Due to such reviews, disputes can arise with the Zimbabwe Revenue Authority (ZIMRA) over the interpretation or application of certain legislation, said Implats.

Its Zimbabwean subsidiary had filed legal proceedings in the Special Court for Income Tax Appeals and the Supreme Court of Zimbabwe in relation to various historical income tax matters, the company said.

Muller was still optimistic about the company’s footprint in Zimbabwe, where mining is the country’s most significant earner of foreign currency.

“The potential of the Great Dyke offers the kind of future that we often speak about, which is low-cost mechanisation,” he said_Business Weekly

$18 Billion COVID 19 Economic and Stimulus Package a challenge for ASM

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$18 Billion COVID 19 Economic and Stimulus Package a challenge for ASM

The Deputy Minister of Mines and Mining Development Hon Polite Kambamura has encouraged Artisanal and Small-Scale Miners (ASM) to formalize for them to benefit from the government’s economic development and supporting schemes.

Rudairo Dickson Mapuranga

The artisanal and small-scale mining sector is the major contributor of gold produced in Zimbabwe accounting for more than 60 per cent while in chrome, the sector is very active speculatively accounting for over 70 per cent of chrome productions.

Responding to artisanal miners demands that the government should have considered that most small scale and artisanal miners would not be able to acquire the $18 Billion Covid-19 Economic and Stimulus Package pronounced by the government due to its conditions which are out of touch with the reality, Deputy Minister Kambamura said the facility was managed by the bank thus miners were compiled to standard bank loan conditions.

Kambamura also advised small scale and artisanal miners to formalize their operations by registering with the Ministry of Mines and Mining Development in order to benefit from such government supporting packages.

“The facility is managed by the bank and interested parties should borrow according to standard bank loan conditions. We also encourage the ASM sector to formalise by registering their operations with the Ministry of Mines and Mining Development, other government departments and opening bank accounts.” Hon Kambamura said.

However, Speaking to Mining Zimbabwe Norton Miners Association Chairperson Privelage Moyo the government is not supposed to generalize conditions when dealing with small scale and artisanal miners because most of these miners need government support although they cannot meet many of a modern business requirement.

Moyo said it was important for the government to look at who was receiving the loan and the state that the particular business is operating in before coming in with conditions that are difficult to match for national fiscus contributing businesses.

The Norton Miners Chairperson also said that stringent conditions should not be required for small scale and artisanal miners because the country is not economically free for businesses to operate as big corporates due to the trade embargos imposed on the country.

“As small-scale, we might not have all the requirements that they want. They should look at who they want to give a loan and not to generalize the conditions. If you ask for stringent conditions from small scale miners, the country is not economically independent as we speak because it is under sanctions. We must relax our conditions when speaking of small scale miners.” Moyo said.

The land which is owned by small-scale and artisanal miners should be considered as collateral because the land on its own is an asset, Moyo said.

“What govt need to realize is that land on its own is an asset and can be used as collateral, because in the mining sector before I get the resource I get the land, so that land is already valuable on its own that land already can be used for any other project that they need to consider.” He said.

Below are the conditions that are given to small scale miners

  1. Support letter from Zimbabwe Miners Federation (ZMF)
  2. Support letter from The Ministry of Mines and Mining Development
  3. Signed Extract Board Resolution
  4. Draft agreement from lenders
  5. Company Documents-CR 14, Memos and Articles of Association 6
  6. Detailed Business proposal
  7. Audited financial statements for the past 3 years-Provisional statements will be required

where audited statements are not available

  1. 3-year cash flow as well as underlying assumption-accounting for the principal and interests’ repayments
  1. Latest aged analysis of trade receivables and payables
  2. Latest Management of Accounts
  3. Full details of borrowing position indicating the name of lenders, types of facilities, amount approved, date approved, current utilization, outstanding balance, arrears report, repayment terms, expiry date, due date, full details of securities, collateral provided, and debt management strategy in case of arrears.

FalGold to delist from ZSE

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FalGold to delist from ZSE

Struggling gold producer, Falcon  Gold (FalGold) said on Wednesday it will seek shareholder approval at the end of the month to delist from the Zimbabwe Stock Exchange (ZSE)  after 24 years of trading.

The de-listing is one of two moves, including a buyout of minority shareholders, being implemented as part of an overall plan which the majority shareholder, Canadian based New Dawn, wants implemented before rescuing the firm whose operations are at a standstill.

Trading of FalGold shares was suspended in March this year after the miner failed to publish its financial results on time.

The firm has in the past year unsuccessfully tried to raise US$3  million to inject in its main operations at the Golden Quarry located in  Shurugwi.

“A number of structures have been discussed to address Falcon Gold’s working capital issues (and the legal paths to implement such structures), but New Dawn has advised that the existence of the approximately 15 percent minority interest, combined with the continued listing of Falcon Gold’s shares on the ZSE, are the factors that are preventing New Dawn from being able to provide the critically needed capital injection into Falcon Gold,” the miner said.

“In essence, it is against New Dawn’s economic interest, and would  furthermore be fiduciary irresponsible for New Dawn to provide funding  to Falcon Gold with minority interest still in place.”

An offer of ZWL$0.13 per share has been made to minority shareholders.

At least 75 percent of shareholders are required to pass the vote to delist and buyout minorities at the company’s extraordinary general meeting to be held on October 29.

In its justification for the de-listing the miner said it was no longer beneficial for the firm which had failed to mobilise funding to invest in operations through the sale of shares.

“As a public company that is exclusively traded on the ZSE and only in  Zimbabwe, such listing has not in recent years provided any benefit to  Falcon Gold,” the firm said.

“In fact, the ZSE listing has been detrimental given ongoing legal,  compliance and audit costs, and the inability to raise capital through  the sale of shares.”

New Ziana

South African union threatens strike at coal and diamond mines

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South African union threatens strike at coal and diamond mines

South Africa’s National Union of Mineworkers (NUM) threatened on Friday to call a strike at mining companies De Beers, Exxaro, and Petra Diamonds after failing to reach wage agreements.

NUM, one of the biggest mining unions in South Africa, said it had secured a certificate to stage a strike after talks on a wage settlement in mediation with the companies at the Commission for Conciliation, Mediation and Arbitration (CCMA) came to no agreement.

THE THREE COMPANIES ALL SAID IN SEPARATE STATEMENTS THAT THEY WOULD CONTINUE TO ENGAGE WITH THE UNION TO FIND A SOLUTION

It said it was finalising picketing rules with the CCMA but did not say when the strike would go ahead.

“It is going to be a big, big fight,” said William Mabapa, NUM Chief Negotiator at the three companies, said in a statement.

“Food prices, fuel prices, and general inflation had sky-rocketed. There is just no room for peanuts increases and for that, we are prepared for war.”

The three companies all said in separate statements that they would continue to engage with the union to find a solution.

“We value our employees and our relationship with the NUM and we will therefore continue with our engagements in an effort to reach a sustainable agreement in the interest of all parties, considering the current external environment,” De Beers, a unit of Anglo American, said in its statement.

Exxaro is the biggest coal supplier to South Africa’s state-owned power utility Eskom.

NUM has also reached a deadlock in its wage negotiations with unlisted Seriti Coal Mine and has declared a dispute with the CCMA for mediation, a move that is one step short of a strike.

South Africa’s labour laws allow for wage disputes to be referred to an outside mediator. If that fails, employees can go on strike.

NUM said it is demanding an increase of 8.5% across the board while the company is offering workers a 4% rise.

Seriti said talks with the union were continuing.

Reuters

Anglo American wants to explore base metals in South Africa

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Anglo American wants to explore base metals in South Africa

Anglo American wants to explore for base metals in South Africa, but the country needs regulatory changes to make it more competitive with other mining jurisdictions, CEO Mark Cutifani said on Wednesday.

Policy uncertainty, insecurity of tenure and unreliable electricity supplies have stifled investment in Africa’s most industrialised economy, where the mining industry contributes around 9% to GDP.

“We will explore base metals across South Africa… We are already in Zambia and other places, we want to do more in South Africa so we are looking for adjustments in legislation there,” said Cutifani during the 2020 Joburg Mining Indaba conference.

He did not give details.

South Africa is traditionally Anglo American’s core territory, but the diversified miner has offset some of the risk of investing in the country, notably with operations in South America.

Anglo American said its interest in base metals, which include copper, nickel, lead, and zinc, was part of its global discovery strategy in greenfield and brownfield projects.

Cutifani also said he would like its South African platinum group metals (PGM) business to increase production of nickel, which can be used in battery production.

Reuters

Impala approached over stake in giant Zimbabwe platinum project

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Impala approached over stake in giant Zimbabwe platinum project

The owners of a Russian-backed project to build Zimbabwe’s biggest platinum mine have held talks to sell a stake of at least 20% to Impala Platinum Holdings Ltd., according to people familiar with the matter.

Great Dyke Investments views Impala as an attractive partner partly because the Johannesburg-based company also has the capacity to process ore from the mine, said the people, who asked not to be identified as the details aren’t public. That would give Great Dyke an offtake agreement to help it to raise financing to complete the mine, they said.

DARWENDALE PROJECT HAS THE POTENTIAL TO BECOME ONE OF THE WORLD’S BIGGEST PLATINUM MINES

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

“The size of the stake we plan to sell is subject to negotiations,” said Brown, a former chief executive officer of Impala. He declined to comment further.

Impala said it isn’t in formal negotiations with Great Dyke.

Impala already operates mines in Zimbabwe. One stumbling block to a deal is Great Dyke’s valuation of the project, the people familiar said. Great Dyke would consider selling a bigger stake, but for the moment the existing shareholders want to retain a majority holding, they said.

Zimbabwe has the world’s third-largest platinum group metal reserves after South Africa and Russia. Former president Robert Mugabe handed the Darwendale concession to Russian investors in 2006 after the government repossessed land from a local unit of Impala.

Great Dyke hopes to secure about $500 million in initial capital by the end of the year and the mine could be commissioned in 2023, CEO Aleksandr Ivanov said last month. It could produce more than 860,000 of PGMs a year at full production. Ivanov declined comment when spoken to by Bloomberg on Tuesday.

Bloomberg News

Gold watchers say don’t rule out US election turmoil yet

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Gold watchers say don’t rule out US election turmoil yet

The stock market is riding high, taking Joe Biden’s widening lead in the polls as a sign to discount the odds of a contested election. But some investors say it’s too soon to count out turmoil just yet, and that gold is poised to benefit from the uncertainty.

Fears eased this week that the election would fail to produce a clear winner, with traders pointing to polls suggesting a stronger lead for Democratic hopeful Biden. The possibility of a close vote and messy aftermath had made markets nervous in recent weeks while bolstering hopes for haven assets such as gold.

“Despite some polls indicating Biden’s lead is widening, I would not assume the risk of a contested election has dropped, although I know that’s what many are concluding,” said Kristina Hooper, chief global market strategist for Invesco Advisers, which manages $1.1 trillion for clients. “A lot can happen between now and the election, and I do believe gold can benefit from it.”

Gold seen rebounding after biggest monthly loss since 2016

Bullion, which surged 30% through the first eight months of 2020, lost momentum in September, easing for a second month as the dollar gained. While last week saw signs demand was starting to mend — with prices posting the best gain since August on prospects for U.S. stimulus — it’s been rockier this week. Gold tumbled on Tuesday after Trump ended talks with Democratic leaders on a new support package, only to pare that loss on Wednesday.

Under-appreciated risks

Risks surrounding the election may “be under-appreciated by precious metals markets,” according to Citigroup Inc. The bank said late last month those concerns could help push bullion to a record by year-end. Spot gold hit an all-time high of $2,075.47 an ounce in August and was at $1,890.92 on Wednesday.

“Gold thrives on uncertainty: we’ve never had an election in my experience in the U.S. that is as uncertain as this, and as uncertain a political environment as this,” said George Milling-Stanley, chief gold strategist at State Street Global Advisors, the marketing agent for SPDR Gold Shares, the biggest exchange-traded fund backed by the metal.

“GOLD IS STILL AN EXCELLENT DIVERSIFIER WITHIN THE PORTFOLIO CONTEXT FOR PEOPLE WISHING TO HEDGE AGAINST THESE UNCERTAINTIES WE HAVE COMING TOWARDS US”

Growing tensions in the run-up to the contest were underscored by an unusually contentious debate last week between Trump and Biden. Markets had been girding for a possible disputed result after Trump last month wouldn’t commit to a peaceful transfer of power were he to lose the election. The Cboe Volatility Index, or VIX, has risen for six straight sessions, the longest run since 2018.

“We’ve been fooled by the polls before, so there remains a lot of uncertainty around the outcome,” Wayne Gordon, executive director for commodities and foreign exchange at UBS Global Wealth Management, said on Bloomberg TV. “Gold is still an excellent diversifier within the portfolio context for people wishing to hedge against these uncertainties we have coming towards us.”

Gordon recommended buying gold in March, when the metal was plunging as deep losses in risk assets forced some investors to sell gold to raise cash. Since that call, prices have jumped more than 30%.

Potential headwinds

There are potential headwinds for gold that could keep its rally sidelined, including a slowdown this year in demand for the metal from central banks and a dollar that proved resilient in September.

But while the U.S. election season poses the greatest political risk, it’s only one of a raft of potential drivers that are likely to underpin investor interest in gold, according to Commerzbank AG. Those include Brexit, rapidly rising national debt levels, economic stimulus and extremely low interest rates, the bank said.

Michael Cuggino, president and portfolio manager at Permanent Portfolio Family of Funds, sees gold “increasing in value regardless of the election outcome” over the longer term.

“As long as real interest rates are negative across the curve, more liquidity is provided by the Fed and Congress, and growth resumes in the U.S. and abroad post-Covid, inflation expectations will be heightened and gold should continue to rise, albeit in its traditionally lumpy fashion,” Cuggino said.

In the meantime, the focus for gold over the next several weeks will stay on the U.S. election. Trump has called universal mail-in balloting, where states automatically send a ballot to every registered voter, “rigged” and “unfair,” stirring worries about a prolonged dispute over vote tallies.

“This time around it’s a little bit different,” said Darwei Kung, head of commodities and portfolio manager at DWS Group. “It’s not just the outcome of the election, but the process of the election, that sort of uncertainty.”

Bloomberg News

Barrick CEO calls for consolidation and warns of reserve crisis

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Barrick CEO calls for consolidation and warns of reserve crisis

Barrick Gold CEO Mark Bristow on Wednesday said the gold industry in Africa should consolidate further, as he warned of a “serious reserve crisis” looming for the sector.

A dearth of exploration has seen average mine life across the gold mining sector fall from 20 years to closer to 10 years, he added, speaking at the Joburg Indaba mining conference.

“The prospect of a serious reserve crisis is looming,” said Bristow. Gold production across the industry has only increased by 1.6% every year for the past two decades, he said.

Bristow said this week’s deal between Northern Star Resources and Saracen Mineral Holdings was a “great example” of industry consolidation that should be celebrated.

A DEARTH OF EXPLORATION HAS SEEN AVERAGE MINE LIFE ACROSS THE GOLD MINING SECTOR FALL FROM 20 YEARS TO CLOSER TO 10 YEARS

On Mali, where Barrick is among the biggest investors and operates the Loulo-Gounkoto gold mine, Bristow said the transition after an August military coup has been “very well” run.

“Everyone agrees that 18 months for transition back to full civilian rule is doable, and that’s ambitious,” Bristow said, adding that “none of the organs of state has stopped functioning.”

Bristow again signalled his appetite for acquiring Freeport-McMoran’s Grasberg mine in Indonesia, the world’s biggest gold mine and second-biggest copper mine.

“There are not a lot around, and so by deduction of course we remain interested in being able to add to our portfolio any tier 1 asset out there,” he said.

Bristow said he has no doubt the company will be able to repatriate $500 million which belongs to its Kibali joint venture in the Congo.

“That paperwork is far down the road,” he said. At the start of July, Bristow had said the money would be cleared to leave the country “very soon.”

“There’s a fundamental recognition that to continue to attract investors into the DRC, you have to give them the right to repatriate their profits,” he said.

Reuters

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