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Small-scale gold miners still paid 100% forex

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Small-scale and Artisanal miners gold miners will still receive their gold payment from the country’s sole gold buyer and exporter in 100 percent forex.

Contrary to the reports disseminated earlier that all exporters will now be subjected to foreign currency retention threshold of 70 percent following the success of the auction-based system in improving foreign currency availability for producers.

Small-scale and artisanal miners will be paid in foreign currency 100 percent, technically gold producers are not exporters as this is done by Fidelity.

Fidelity Printers and Refiners (FPR) General Manager Mr. Fradreck Kunaka has confirmed that no new arrangements are in place in terms of what gold miners get from the sole gold buyer and exporter.

“Nothing has changed as yet the same arrangements are still in place,” Kunaka said. “However, gold companies will still cede some of their foreign currency earnings to the state at a retention threshold of 70/30”

As from May 2020, Small scale gold miners have been paid 100 percent of their deliveries to Fidelity Printers and Refineries in foreign currency as the government seeks to curb gold leakages into the parallel market.

Previously, the state was offering small scale and artisanal miners up to 55 percent of their earnings in foreign currency with the remaining 45 percent paid in local currency at a fixed exchange rate.

This led to most artisanal miners opting to sell their gold produce on the black market where they would get their earnings wholly in foreign currency.

Currently, small-scale miners have been lamenting about late payments from Fidelity raising fears of the yellow metal’s return to the always liquid parallel market.

Miners chase a slice of China’s growth

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China’s need for raw materials to feed its fast-growing economy will result in more tie-ups with large, international mining houses, senior industry executives said at Reuters Mining Summit this week.

Suppliers such as Phelps Dodge Corp. (PD.N) and Inco Ltd. N.TO, respectively the world’s second-largest copper and nickel producers, have held talks with Chinese users desperate for metal to fuel economic growth set to top 9 percent this year.

“The Chinese are already concerned about sourcing raw materials. They are looking worldwide for opportunities to invest,” said Steve Whisler, chairman, and CEO of Phelps Dodge.

This could lead to conflict with Japanese metals producers also keen to participate in a booming world market that has seen prices race to their highest levels in several years, he said.

“They are going to be competing for the same raw materials throughout other parts of the world,” Whisler said. “The Chinese aggressiveness in this sector has resulted in the Japanese rethinking how aggressive they need to be.” China consumes about a fifth of the world supply of copper, which rose to a record high MCU3 of $3,336 a tonne in April.

Minmetals Corp., China’s largest metals trader, last week agreed to a deal worth up to $2 billion to secure copper from Chile’s Codelco, the world’s largest producer of the metal — a deal that Codelco’s chief executive, Juan Villarzu, said has sparked interest from other companies.

STAINLESS STEEL

Peter Jones, Inco’s president and chief operating officer, said his company had recently been approached by three stainless steel producers, including one large Chinese player.

About two-thirds of the world’s nickel is used to add sparkle and shine to stainless steel, although in China, only about 40 percent of nickel is used for this purpose.

“One of the biggest worries in the stainless steel industry right now is access to supply,” Jones said at the summit, held at Reuters offices in New York.

“It makes sense for us to have some sort of tie-up with major consumers,” Jones said.

He added Inco was considering investing in a Chinese plant to process stainless steel scrap, which he said accounted for between 46 percent and 47 percent of the nickel used in stainless steel worldwide.

“We have a recycling business in Pittsburgh and we’re looking very hard at whether doing something in China like that, to service the stainless steel industry, makes sense.”

POWER SHORTAGES

China’s production of some metals will be limited in the short term by the country’s power shortages, some executives said, offering opportunities for foreign suppliers to meet rising consumption.

“China has a lot of challenges on the energy side. They need a lot of energy for their growth,” said Bernt Reitan, group president for global primary products for Alcoa Inc. (AA.N), the world’s top aluminum producer.

Donald Lindsay, president and CEO of Teck Cominco Ltd. TEKsvb.TO, the world’s largest zinc miner, noted that China last year became a net importer of the anti-corrosive metal.

“The zinc refining industry consumes a lot of power, and there are power shortages in China, so there might be a period of time when they don’t devote their scarce power to that,” he said, but added the country had the resources to eventually supply its own zinc needs.

RUSAL, the Russian company that ranks as the world’s No. 3 aluminum maker, is also seeking to grow supplies to China, but the company wants only to pursue long-term supply deals.

Bruce Markowitz, president of RUSAL America Corp., said the often volatile Chinese market was better suited to traders.

“In China, we have a few key customers, where we have business month-in, month-out, year-in, year-out. We’re looking for more of that ilk of business,” Markowitz said_Reuters

De Beers cuts diamond prices after covid-19 curbs demand

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De Beers has finally decided to cut the price of its diamonds in a bid to spark sales after the coronavirus pandemic paralyzed the industry.

De Beers, the world’s no. 1 producer, told customers that it is cutting prices for larger stones by almost 10% at its sale starting this week, according to people familiar with the situation, who asked not to be identified as the details are private.

A spokesman for De Beers declined to comment.

The Anglo American Plc unit, along with Russian rival Alrosa PJSC, had previously tried to defend the value of the gems as the pandemic hammered the sector. With jewelry stores closed, cutters and polishers stuck at home and global travel at a standstill, the entire diamond industry ground to a halt.

In the second quarter, De Beers and Alrosa sold a combined $130 million in rough diamonds, down from $2.1 billion a year earlier.

De Beers lowered the price of rough diamonds bigger than 1 carat, a size that would normally yield a polished gem of about 0.3 carat in size, the people said. The company held the price of smaller stones as there is very little demand for them and lowering prices by a similar amount would be unlikely to spur demand, they said.

Before the price cut, De Beers had made major concessions to their normal sales rules — allowing customers to renege on contracts and view diamonds in alternative locations. Still, smaller rivals were selling at a 25% discount, eating into the company’s market share.

The cuts show the company believes there is now demand, albeit at a lower price point. Most big diamond cutters and polishers haven’t bought any material amount of stones since February and their inventories are running low.

The ultimate recovery of the industry will depend on consumers returning to jewelry stores. While demand has recovered in China, the U.S. remains the most important market, accounting for nearly half of all sales_Bloomberg News

Glencore makes U-turn to back artisanal mining of cobalt

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Glencore Plc, the top cobalt producer, backed a new initiative to support informal miners in the Democratic Republic of Congo as the industry tries to reassure carmakers about ethically mined supplies of the battery metal.

The company, which has long argued that the auto industry is best served by buying cobalt from its industrial mines rather than from informal miners, said Monday that it has joined the Fair Cobalt Alliance. The group aims to end the use of child labor at mining sites and improve working conditions in Congo. It’s also backed by major Chinese cobalt refiner, Zhejiang Huayou Cobalt Co.

Glencore is joining the FCA at an important time for the cobalt industry. Earlier this year, Tesla Inc. agreed to buy the metal from Glencore’s Congo mines as it seeks to avoid a future supply squeeze, yet battery makers are increasingly looking to engineer out the metal given it’s high price and concentrated output in one country.

“The FCA is a vehicle for businesses all along the supply chain to collaborate with the DRC government and civil society to transform the artisanal mining sector into a source of fair, safe and responsibly mined cobalt,” said David Brocas, Glencore’s head cobalt trader.

Almost three-quarters of the world’s cobalt comes from Congo, where Glencore owns two of the largest mines, and demand is forecast to surge in the coming years, driven by electric-vehicle sales. Still, groups such as the Organisation for Economic Co-operation and Development have warned about the risks from the informal sector, where independent miners dig by hand and production from Congo’s artisanal mines often gets mixed in with industrial output.

Glencore has long positioned itself as the leading source of responsibly mined cobalt. It already has supply deals with China’s GEM Co. and BMW AG, and, unlike some rivals, has avoided buying from artisanal supply. The company has no current plans to change that policy_Bloomberg News

Congo grants new export ban waivers for copper, cobalt, tin

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Democratic Republic of Congo on Saturday gave mining companies an indefinite waiver to an export ban on cobalt hydroxide and carbonate, as well as tin, tungsten, and tantalum concentrates after meeting the country’s biggest miners in Kinshasa.

The mines ministry also announced an export ban waiver on copper concentrate, but said the duration of that waiver was still to be determined, with companies expected to submit proposals a week from now.

Congo, the world’s leading producer of cobalt and Africa’s biggest copper producer, banned exports of copper and cobalt concentrates in 2013 to encourage miners to process and refine the ore in the country.

But insufficient smelting capacity has driven it to repeatedly issue waivers, the most recent of which was set to expire on Saturday.

“After a long debate, the mines minister Professor Willy Kitobo Samsoni, decided … to grant an indefinite waiver for cobalt hydroxides and carbonates, the tin concentrates of Alphamin, and concentrates of 3Ts [tin, tungsten, and tantalum],” the ministry said in a statement.

Alphamin, which runs a tin mine in Congo’s North Kivu province, did not immediately reply to a request for comment.

The decision will come as a relief to cobalt, copper, and tin mining companies in Congo as well as smelters and refiners in Zambia, which process copper from Congo, and in China, where much of Congo’s cobalt is processed.

In January, China’s state-owned mining company CNMC launched Congo’s first large-scale smelter, the Lualaba Copper Smelter (LCS), capable of processing 400,000 tonnes of copper concentrate and producing around 120,000 tonnes of copper blister per year.

But even at full capacity, LCS cannot process all Congo’s copper. Congo produced 765,000 tonnes of copper concentrate in the first half of the year alone, the central bank said, up 13.4% year-on-year.

Miners whose copper concentrate is incompatible with LCS must “rapidly” develop their own smelting capacity on-site, the ministry statement said, adding all copper miners at the meeting accepted the importance of on-site processing.

Congo produced 38,816 tonnes of cobalt in the first half of 2020, up 6% year-on-year according to the central bank. Production of “3Ts” concentrates – tin ore cassiterite, tungsten ore wolframite, and tantalum ore coltan – plunged, however.

Glencore, the biggest industrial cobalt miner in Congo, declined to comment on the decision_Reuters

Rio chiefs lose millions over aboriginal site blast

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Rio Tinto’s (ASX, LON, NYSE: RIO) top bosses will pay millions of dollars for the destruction of two ancient caves in Australia as the group has decided to cut short-term bonuses of some senior executives following an internal review.

Chief executive Jean-Sébastien Jacques will lose almost $5 million (£3.7m) in bonuses and the head of the iron ore business, Chris Salisbury, will see his bonus trimmed by at least $1 million, according to an internal report released on Monday.

Other managers, not at the executive level, might also lose their bonuses, the document says. The board’s non-executive directors also agreed to donate 10% of their 2020 director fees to the Clontarf Foundation, a non-Indigenous organization that supports Aboriginal education and employment.

CHIEF EXECUTIVE JEAN-SÉBASTIEN JACQUES WILL LOSE ALMOST $5 MILLION (£3.7M) IN BONUSES

Rio Tinto destroyed two rock-shelters in Juukan Gorge in the Pilbara region of Western Australia on May 24 while carrying out work to expand its iron ore operation.

The company proceeded with the blasting despite having received five separate reports on the significance of the sites, both archeologically and to the local Puutu Kunti Kurrama and Pinikura (PKKP) people, since 2013.

Three mining options that would have avoided damaging the sites were rejected in order to access about 8 million tonnes of high-value ore, Jacques told an Australian Parliamentary committee earlier this month.

The internal review, launched in June, concluded that Rio Tinto “failed to meet some of its own internal standards and procedures in relation to the responsible management and protection of cultural heritage.” It also found that the company failed its own aspirations towards working with Indigenous groups.

“Pocket change” penalty

Jacques was due to receive an annual bonus of $3.1 million (£1.7m) and a long-term performance bonus of $1.8 million (£1m) in 2021. The CEO earned £5.8 million ($7.6 million) in 2019 including salary, benefits, a bonus and stock awards, according to Rio Tinto’s latest annual report.

Salisbury would have received a bonus of $1.1 million this year, and the global group executive of corporate relations, Simone Niven, was expected to receive around $960,000 (£525,000).

Rio Tinto stopped short of firing any executives, drawing criticism from investor groups and stakeholders who accused the company of failing to take full responsibility for the demolition of sacred sites.

RIO TINTO STOPPED SHORT OF FIRING ANY EXECUTIVES, DRAWING CRITICISM FROM INVESTORS WHO ACCUSED THE MINER OF FAILING TO TAKE FULL RESPONSIBILITY FOR THE DEMOLITION OF SACRED SITES

The Australian Centre for Corporate Responsibility, which represents institutional investors, said in a statement the review was “highly disappointing” and “little more than a public relations exercise.”

“Tens of thousands of years of cultural significance get blown up and all that goes to show for it is $7m of lost remuneration,” the body’s CEO James Fitzgerald said.

He said that was “pocket change for these highly paid executives” and that Jacques and Niven should lose their jobs.

The Australian Council of Superannuation Investors said the review “does not deliver any meaningful accountability” and an “independent and transparent review would have given investors greater confidence that [the] accountability applied was appropriate and proportionate.”

“Remuneration appears to be the only sanction applied to executives,” the council’s chief executive, Louise Davidson, said. “This raises the question – does the company feel that £4 million (about $7m) is the right price for the destruction of cultural heritage?”

Rio Tinto said it would add a new social performance function to monitor its approach to community and heritage practices. It also plans to include processes to escalate heritage issues to senior management_Mining.com

Fidelity gold buying prices Tuesday 25 August 2020

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Fidelity Printers and Refiners official gold buying prices Tuesday 25 August 2020.

SG 90% AND ABOVE $55.93/g
SG ABOVE 85% BUT BELOW 90% $54.99/g
SG ABOVE 80% BUT BELOW 85% $53.74/g
SG ABOVE 75% BUT BELOW 80% $53.12/g
SAMPLE BELOW 10g BUT ABOVE 5g $54.37/g
FIRE ASSAY CASH $56.25/g

Cash available. Fidelity Printers and Refiners prices will be changing daily in relation to world market prices.


Contact FPR

No. 1 George Drive, Msasa, Harare

Telephone: +263 242-486670, +263 242-486694, +263 242-487131, +263 242-447810-5

Coal investment in the country a misplaced priority, says lobby

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A MINING rights watchdog says the country’s addiction to coal was not healthy for citizens adding this did not only go against Zimbabwe’s own policies and strategies but globally agreed frameworks also.

In a statement, Centre for Natural Resources (CNRG) said coal investment in the country was a misplaced priority.

“Coal extraction and burning not only has serious environmental impacts on land, water and air, but has social impacts on the human population too, resulting in many succumbing to chronic diseases such as tuberculosis,” the lobby group said.

“Further, coal has been singled out as the major contributor to global warming through high carbon emissions.

“In Zimbabwe, communities that host coal mining companies have nothing to show despite a gloomy environment that is coupled with extensive damage of flora and fauna.

“This creates an ecological debt that investors will not bear the burden but the communities.”

CNRG went on to say Zimbabwe should maximise and take action on its renewable energy potential which is not only eco-friendly but also sustainable.

“Zimbabwe should halt coal related investments and focus on tapping the renewable energy potential, such as solar energy,” CNRG said.

“This entails civil society lobbying for the central government to allocate more financial resources towards financing renewable energy, as reflected in the national budgets.

“The government must show political will in implementing policies and frameworks that promote affordable low carbon renewables to the people and priority should be given to mining companies that are willing to invest in low carbon emissions.”

The lobby group also said Corporate Social Responsibility has been a problematic issue between local communities and extractive industries.

“In most instances, little developments that have taken place serve to benefit the interest of the corporates to allow for the easy transportation and extraction of the precious resources,” it said.

“Whilst a lot of environmental degradation will be taking place affecting the local communities there is very little if any to show for the resources – hence the term privatising profits whilst externalising the cost to the community.

“Mining firms are causing land and water pollution and destroying road networks but also failing to plough back to the communities impacted by their businesses.”

For instance, the Hwange community has suffered much harm at the hands of the HCCL and other mushrooming coal mining companies.

In a petition directed to Zimbabwe Zhongxin Coking Company (ZZCC), the community expressed concern on the effects of pollution caused by shunting trucks carrying coke from the plant to external markets.

Villagers indicated that the dust has affected the Lukosi Irrigation Scheme and yields have gone down over the years.

The dust also affects Lukosi primary school and Lukosi hospital and there are similar concerns about water pollution on Deka River by the mining companies that discharge effluent into the water body, killing livestock and fish downstream.

There is also a need for communities that host coal sites need to be sensitised on the Climate Change Response Strategy and National Renewable Energy Policy so they put pressure on the central government to implement the its own renewable energy policies and international commitments_New Zimbabwe

Lafarge cement pollutes Mabvuku air

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Greyish dust covers what would normally be green tree leaves as well as other surrounding surfaces in what serves as testimony to the environmentally toxic activities caused by Lafarge- a cement production plant- in Mabvuku.

From a distance, even on a scorching Zimbabwean summer day, a white cloud of excessive dust emitted from the plant can be seen hovering over the residential area.

This has made life here “an unbearable living hell” according to the residents. Cement dust hovering above Mabvuku residential area, a result of emissions from Lafarge’s cement making plant.

“We are strangers to fresh air and we never open our windows for ventilation to prevent dust from settling on furniture and linen, says Kelvin Nhatau (27), who was born and raised here.

“If I skip a day without cleaning the house, all things are bound to turn grey.”

The problems do not end there as Lafarge’s activities come with more than air contamination but also tormenting noise pollution.

“We also have noise produced from the plant to grapple with daily. There is no rest, it’s only that we have adapted but during our first days here getting some sleep was very hard,” he added.

With the United Nations Environment Programme (UNEP) reporting that air pollution kills over six million people each year through strokes, lung cancer, heart attacks and respiratory diseases, the industrial activity has presented a health dilemma for most of Mabvuku resident

From a distance, evident low visibility conditions from dust emitted by Lafarge cement plant Seventy-eight year-old Eunika Kanhukamwe who has been staying in the area since 2001 expressed discomfort over the emissions saying they have made her cough since the day she moved into Mabvuku.

“I always have a mild cough and this has been the case since moving here back in 2001,” she says.

In a show of penitence for the business negative impact on the environment, residents say the former owners of the plant before Lafarge took over two decades ago, would parcel out pints of milk to each household to mitigate effects of inhaled dust

“Back in the day when the plant was under Circle Cement, we would get portions of milk three times a week among other development initiatives carried out in the neighbourhood, as show of admittance to the health risk they were exposing us to, Nhatau revealed.

Although medical scholars have dismissed claims that milk can mitigate respiratory challenges for a myth, residents feel hard done by Lafarges careless conduct.

“Ever since Lafarge took over, we have barely seen any form of development they have brought to this community. We have dust roads around this area but no attempt whatsoever has been made to at least x them.

“If infrastructural development is too much to ask for, how about at least supplying us with dust masks to protect us from the dust they feed us every day and night,” lamented Nhatau.

Further illustrations by Mabvuku residents detailed how removing the dust that would have settled on windscreens of vehicles after a few days can leave one cringing over the thought of impact the same dust would have within the human respiratory system.

Water alone, they say, could not clear o the settling dust calling for a homegrown solution of sprinkling vinegar on the screen to clear it off.

Meanwhile, Lafarge was last week ordered to stop operations following complaints led by residents to the Environmental Management Agency (EMA) over dust emissions at the plant.

The agency observed that the plant was repeatedly discharging dust emissions that are abnormal and generating fugitive dust from the kiln stack and the surrounding plant. To that end, an order was served to Lafarge to cease operations at the kiln stack until all areas of concern have been rectified to the satisfaction of the agency, EMA environmental education and publicity manager Amkela Sidange sai

According to Sidange, operations only resumed following laborious meetings with the cement maker which came up with strict conditions.

Following rigorous engagements and considerations, the agency has since made a variation to the order by allowing Lafarge Cement to resume kiln stack operations but under very strict conditions; and to comply with the conditions of the initial order served.

One of the conditions is that Lafarge should submit to the agency after every 14 days, returns detailing the daily average concentration of dust emissions from the kiln following the commencement of the operations, including fall out dust at locations to be set up in consultation with the agency,” she said.

But residents who spoke to this publication say there was never a sign of stopped operations at the plant.

“Not at any time last week do we remember that noise muting or that chimney emitting little to no dust, it was business as usual, said a group of women residing a few meters away from the plant in unison.

Despite the allegations, Lafarge said in a statement: We received a directive from the authority to stop operations earlier in the week and we immediately complied. After this, EMA officials came to our site to conduct investigations after which the directive was reviewed subject to the company fulfilling a set of conditions.

A report by the International Association for Medical Assistance to Travellers (IAMAT) says

Zimbabwe’s air quality is considered moderately unsafe per the World Health Organization’s guidelines.

The report attributes Zimbabwe’s poor air quality to mining, cement and steel industries, fertilizer manufacturing, vehicle emissions, and waste burning.

 

263Chat

70 percent forex retention returns

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Miners and other exporters will now be subjected to foreign currency retention threshold of 70 percent following the success of the auction-based system in improving foreign currency availability for producers.

According to the new monetary policy released by the Reserve Bank of Zimbabwe (RBZ) Governor John Panonetsa Mangudya, all exporters will receive 70 percent of their exports in foreign currency with the remaining transferred into their local ZWL accounts at prevailing exchange rate regardless of their productive sectors.

There has been an outcry on the part of miners particularly gold miners on late payments by the country’s sole gold buyer and exporter, Fidelity Printers and Refiners this move is set to address this challenge.

“Given the positive impact of the auction system in price stability and the need to sustain the auction, all export retention thresholds for all exporters will be at a standard level of 70% with immediate effect,” RBZ said.

For some time now, exporters in productive sectors have been calling for an upward revision of the retention thresholds to allow them to access funds to meet operating expenses.

Gold miners were the first to receive reprieve in May this year after Fidelity Printers and Refineries (FPR), a subsidiary of the RBZ raised the foreign currency retention threshold for gold miners to 70 percent from 55 percent.

There will be losers and winners from the latest development given that the Monetary Policy Committee in June agreed on the following threshold with effect from July 1.

Manufacturers retained 80 percent of their export proceeds; gold producers (55 percent); other minerals (50 percent); tobacco and cotton merchants, for input schemes (80 percent); tobacco growers; 50 percent, cotton growers; 30 percent while horticulture, transport, and tourism would retain (80 percent).

The Bank has also reviewed the liquidation period of unused funds from 30 days to 60 days to give exporters more time to plan their cash-flows.

“In addition to this equity principle on export retention thresholds, the 30 day liquidation period of unused funds has been reviewed upwards to 60 days from the day of receipt of funds. This is essential to enable exporters to better manage and plan their cashflows,” RBZ said.