Mining ZimbabweLatest Mining News, Policy and Industry Updates

A High Court judge has declared granite mining company, Southern Granite the rightful owner of Mutuwi Mine in an ownership wrangle that sucked in Mines minister Winston Chitando.

The dispute started when Mines and Mining Development Minister Winston Chitando cancelled Southern Granite’s license in favour of Quarrying Enterprise.

Southern Granite company successfully challenged Chitando’s decision to delegate his statutory powers to a committee that later recommended the cancellation of its registration certificate to mine for granite in Mutoko.

Judge Justice Christopher Dube-Banda delivered two judgments on an application filed by Southern Granite against Chitando’s decision to cancel their registration certificates after Quarrying Enterprise complained that they had over-pegged on a granite claim belonging to them.

The second application was filed by Quarrying Enterprise seeking an order to stop Southern Granite from mining in the area which they alleged was their claim.

Quarrying Enterprise based its argument on a ruling made on April 4, 2018 by Mashonaland East provincial mines director.

Aggrieved by the ruling of the provincial director, Southern Granite then appealed the decision to Chitando, who then set up a committee which he gave statutory powers to decide on the complaint.

Chitando then upheld the decision by the Mashonaland East provincial director.

Southern Granite then approached the High Court for the review of Chitando’s decision.

Southern Granite submitted documentary evidence that included registration certificates dating back from September 28, 2007 and inspection fees receipts from 2007 to date. They also submitted other documentary evidence proving their ownership of the said claim.

Quarrying Enterprise also disputed that the mining claim was initially held in the name of Dimension Stone Quarries before it was transferred to them on May 15, 2008. They also attached documentary evidence written in long hand which proved their claim.

Justice Dube-Banda, however, ruled in favour of Southern Granite on the ownership of the claim saying after analysing the evidence at his disposal, Southern Granite legally acquired the claim and said Quarrying Enterprise had not met the requirements to be given an interdict order since they were not the legal owner of the claim.

Dube-Banda also ruled that Chitando’s decision to cancel the registration certificate of Southern Granite was unlawful since Southern Granite had evidence of constructed markings in 2007 and obtained certificates consistently from 2007 to date.

He also ruled that Quarrying Enterprise could not have obtained certificates in relation to the same claim for the same period.

“Quarrying Enterprise could not have obtained certificates in relation to the same mining location for the same period,” Dube-Banda said.

“Again there is something further wrong, the inspection certificate of 2015 was issued before the certificate for 2014, I agree with the Southern Granite counsel Stanford Moyo that these factors, cumulatively, create an impression that these certificates were issued after the event in an effort to mislead and portray a falsehood that inspections were carried out when no such inspections were carried out.”

Dube-Banda also ruled that Chitando and his permanent secretary did not attend the hearing to come up with the decision to cancel Southern Granite’s registration certificate.

Newsday

THE mining industry has so far lost more than US$200 million in revenue due to COVID-19 and production for the second quarter is expected to decline further by about 60%, Chamber of Mines of Zimbabwe (CoMZ) has said.

In its report titled Economic impact of COVID-10 on the mining industry: Proposals for intervention measures, CoMZ said COVID-19 was now a serious threat to the mining industry.

This is because the sector has strong linkages to regional and global markets for the supply of mineral commodities and products as well for sourcing of inputs, equipment, and machinery.

As such, any negative developments in these markets have direct and indirect impacts on the Zimbabwean mining industry.

With South Africa under lockdown already, the local mining industry is expected to experience some adverse economic shocks, CoMZ said.

“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. Meanwhile, it is estimated that mineral production for the second quarter of 2020 may decline by about 60% compared to the first quarter, with revenue losses exceeding US$400 million,” the document reads in part.

“The revenue loss for the first 30 days arising from a total lockdown exceeds US$200 million, with estimated loss for gold and platinum of about US$160 million. Potential revenue loss for nickel, ferrochrome, coal, and diamonds for the second quarter of 2020 is estimated to exceed US$100 million,” it said.

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

The ferrochrome industry has been the most affected with ferrochrome prices coming down to shutdown levels, even lower than those of 2015.

Responding to the above, CoMZ said most smelters have been put on care and maintenance, with Zimasco having announced its care and maintenance already.

Potnex has already closed, while Afrochine are operating below 50% of installed capacity.

The platinum and nickel industries have not been spared of the logistical complications arising from the lockdown in South Africa and other markets.

There are difficulties in transporting PGMs [platinum group of metals] and nickel concentrates to South Africa due to the new South African measures on COVID-19.

The combined effect of reduced access to markets for commodities and inputs have resulted in loss of revenue, with most mines now failing to meet fixed costs, including payroll costs.

The World Health Organisation in January 2020 declared COVID-19, which has so far killed more than 35 000 and infected 740 000 people globally, as a public health emergency of international concern.

In view of the scale-down of operations and placement of some operations under care and maintenance, CoMZ said there was a need for government, in line with practices in other countries, to waiver payroll tax for the mining sector for the second quarter of 2020 to reduce payroll costs during this time of reduced revenue.

The chamber also appealed to the government to allow mining companies to pay taxes, electricity and utilities in Real Time Gross Settlement in order to allow mining companies to use the available forex to sustain care and maintenance and stay in business.

The chamber further appealed that for any surrendered portion, fair compensation through an incentive scheme as is the case for gold producers be paid.

The incentive should be reviewed to a minimum of 40% of gross proceeds to match local costs that are pegged at parallel market rates.

It also appealed for a reduction in electricity tariff for ferrochrome producers in light of the depressed prices and their need to remain in business.

Newsday

THE Zimbabwe Diamond and Allied Minerals Workers Union (Zdamwu) has called upon the Chamber of Mines of Zimbabwe (CoMZ) and all mine workers to immediately stop going to work for the next 30 days in order to stop the spread of the coronavirus.

The call by Zdamwu follows the gazetting of a 21-day lockdown decree by government to minimise the spread of the deadly coronavirus.

“While we appreciate some of the efforts that are being put by government to prevent the spread of the virus, we believe that these are not enough if mines continue business as usual, thus our call for Chamber of Mines to take the next decisive act of shutting down all mines across the country,” read a letter signed by the union’s general secretary Justice Chinhema.

“This should be supported with an assurance that workers will not lose their wages, leave, and other benefits due to this pandemic. Individual mines are encouraged to prioritise dialogue and consultation and through works council on how to make sure essential services that should be manned by a workforce that is well protected and motivated.”

However, CoMZ revealed in its report that that mineral production for the second quarter of 2020 may decline by about 60% compared to the first quarter, with revenue losses exceeding US$400 million due to COVID-19 effects.

It said the revenue loss for the first 30 days arising from a total lockdown exceeds US$200 million, with estimated loss for gold and platinum of about US$160 million.

Potential revenue loss for nickel, ferrochrome, coal, and diamonds for the second quarter of 2020 is estimated to exceed US$100 million, it said.

“While we are aware that other countries have put in place measures to compensate workers for the loss of incomes, we call upon our employers to be empathetic to their employees and provide the necessary social security safety nets as a matter of urgency since the disruptions to production have been occasioned by a superior force beyond anyone’s control,” Chinhema said.

“Employers should also act responsibly and refrain from taking advantage of this situation to deduct workers annual leave days. Good employers should lead by example and prioritise their employees’ safety at this critical juncture by closing mines while monitoring the situation.”

Newsday