Mining ZimbabweLatest Mining News, Policy and Industry Updates

This was revealed by the Zimbabwe Environmental Law Association (Zela) in its COVID-19 mining sector and communities’ situational report.

DISRUPTION of employment and increasing levels of poverty during the COVID-19 pandemic has forced artisanal small-scale miners to resume their activities, raising fear of the resurfacing of the dreaded machete gangs.

“With many jobs and sources of income being disrupted, and the high costs of basic commodities, many people are increasingly moving into the ASM [artisanal small-scale] gold sector for the quick money they can get,” the Zela report said.

“A series of machete violence cases have been reported in June and July 2020. In Zvishavane, one man was injured during a gold rush.

“In Matobo, at Nugget Mine, a machete gang violence case was reported. Reports of the gang invasions were also recorded in Maphisa, Makwe, and Mvana, with criminals and gold gangs escaping with cash, digital scales, and gold ore.”

Added Zela: “Machete violence incidents have been recorded in a number of mines in Bubi, where the criminal gangs managed to get away with the gold ore.

“In Gwanda, machete gangs have been reported at Vhovha Mine, where they assaulted and injured several miners and got away with gold ore. The police were able to arrest the gang leader after he was handed over to police by the miners who tracked him down to Gwanda.”

The Zela report also said soldiers were reported to be raiding artisanal miners, while police were arresting and closing some mines in cases where miners were not complying with COVID 19 regulations.

“In Matabeleland South, 145 ASM miners were arrested in Gwanda, while 115 were arrested in Bulilimangwe.

“During a recent Parliamentary Committee on Mines meeting in Mutare (23 July 2020) a representative of the Zimbabwe Miners Federation (ZMF) informed parliamentarians that many artisanal and small-scale miners are being arrested, but gold mining activities go on even at mid-night in the ASM sector,” Zela said.

Recently, the Zimbabwe Miners Federation leader Wellington Takavarasha appeared before the Parliamentary Portfolio Committee on Mines led by Edmond Mkaratigwa and called for the formalisation of artisanal mining to enable the miners to operate within the law.

Zela also said there were growing mining claims disputes within the ASM which could be attributed to the use of archaic manual claim allocation and mapping systems in Zimbabwe.
“The use of the manual system has resulted in claim disputes with some claims being double pegged or boundaries overlapping.

“The disputes have resulted in violence. A case was recorded in Penhalonga. A gold miner allegedly hired bouncers to rob a rival of gold ore worth over USD 500 over a mining boundary dispute.”

They said the Ministry of Mines confirmed that processing of mining licenses was slow due to a high number of applications in 2020 and shortages of staff.

“Over the year, the Ministry of Mines has been issuing 2 500 mining titles per year. However, by July 2020, there have been a massive number of applications for mining licences to the Ministry of Mines.

“A large number of applications are straining the Ministry since it does not have adequate resources-human resources and equipment to process mining titles. This has affected the speed of processing mining titles.” Zela said_NewsDay

DESPERATE Chiadzwa villagers, who are fed up with unfulfilled pledges and neglect by the Zimbabwe Consolidated Diamond Company (ZCDC), have decided to pool resources and start income-generating projects in the community.

Pushed by persistent hunger, the villagers contributed funds to the Bocha Diamonds Development Trust (BDDT) for horticulture, poultry and piggery projects, among others, launched in June this year.

BDDT board chairperson Moses Mukwada recently told NewsDay that they were tired of engaging the diamond miners, who have failed to fulfil their own promises.

“For the meantime, we have stopped engaging the Zimbabwe Consolidated Diamond Company because they are failing to attend to our challenges. It seems they are reluctant to assist us. There are legacy issues because as villagers, we were supposed to be assisted in these projects. So starting from 2020, we are not speaking to them and we are now doing our own things,’’ he said.

“The company is even failing to maintain a borehole and the roads are in a bad state. Everything is stuck. There is nothing on community development. So how can we continue to engage them yet it is clear that they do not care about us? We have realised that we need to take action by starting our own projects.”

Added Mukwada: “So these projects that we have started are meant to sustain our livelihoods. We have few resources, through the contribution of funds from the villagers and this has shown dedication. With these contributions we are starting to move on with our lives.”

Since the inception of diamond mining in Marange around 2005, the villagers affected by mining operations were supposed to be compensated and benefit from miners’ corporate social responsibility programmes.

But sadly, infrastructure including roads and water was never developed.

Last week, ZCDC acting chief executive officer Roberto de Pretto said he was shocked by the level of poverty and underdevelopment in Chiadzwa despite being endowed with one of the largest diamond deposits in the world.

De Pretto made the remarks at a stakeholders meeting in Mutare which was hosted by the Parliamentary Portfolio Committee on Mines and Mining Development.

“It is disheartening to walk past Chiadzwa. The area still has no running water and poor roads while children walk long distances to school,” he said
“It is a shock to me that there is no development despite that Chiadzwa fields have one of the largest diamond deposits in the world.”_NewsDay

Parliament of Zimbabwe says pushing for the formalization of artisanal miners through legal amendments will curb illicit flows of minerals, particularly gold, out of the country.

Speaker of Parliament Jacob Mudenda says if the law recognizes artisanal miners formally, it will not only curb illicit financial flows but significantly boost their production which has been on the decline.

Mudenda was speaking at the recently ended review of mining policies by the Parliamentary Portfolio Committee on Mines said even the Gold Trade Act must also be amended to decriminalize possession of bullion.

He said formalization will safeguard the contribution of the sector to the fiscus, increase gold reserves for the country and also ensure the protection of the millions of Zimbabweans who are reliant on the sector for livelihood.

“Gold Trade Act must also be looked at, no doubt that small scale miners are making a significant contribution to the economy, in 2017 it accounted for 53% but this has gone down, we have to recover that status by coming up with proposals to ensure that they continue to make that significant contribution to gold deliveries.

“We need substantial reserves of gold in the RBZ, to get these the leakages must be plugged so that gold goes where it must to strengthen our currency.

“This sector provides livelihood for a million people, we must amend the Gold Trade Act to ensure those sections that criminalize the possession of gold and in turn disempower the small scale miners this has been one major cause of leakages in the mining industry,” said Mudenda.

Mudenda said given the precarious nature of artisanal mining, there was a need to protect miners, perishing in mining related accidents, through formalization which will entail adoption of standard operating procedures.

He said a Fund envisaged under the proposed Mines and Minerals Act must be expedited to ensure that occupational health and safety of indigenous miners is guaranteed, through a Health Fund proposed in the bill.

“There is need to formalize all artisanal and small scale miners so that they practice beneficial mining practices, they need to be assisted to follow proper mining methodology.

“We have lost many artisanal, miners through unsafe mining practices and conditions, the safety and Health Fund envisaged under the mines and Minerals should go a long way in ameliorating the challenges faced by these miners,” said Mudenda.

Minister of Mines and Mineral Development, Winston Chitando said amendments to the Mines and Minerals Act are at an advanced stage with the office of the Attorney General addressing reservations
of the President.

Chitando also revealed that once the mines law is finalised, focus will shift towards addressing policies and amendments of other Acts which affect mining business, under an orderly mining
concept.

“The amendments are around the corner, recently the AG spent the whole week working on the amendments, and they need another session or two to finalize those amendments.

“Amendments to the Gold Trade Act, the Precious Stones Act, and the Mines and Minerals development
policies, we have the principles of these acts but there is no way we can push these until we have concluded the Mines Acts.

“As soon as amendments are concluded we will be able to finalize those three-issue all of which have
drafts in place” said Chitando.

He added, “We are also coming with an orderly mining concept which complies with the immigration laws, labour laws. We need to ensure that there is the enforcement of all requirements in terms of operation of mines, compliance with the environment.”

Deputy Attorney General Nelson Dias said the process of amending the Mines and Mineral Act has been slowed down due to constitutional compliance and alignment as the proposed bill was turned down by the President.

He said the coming act will also give power to the Provincial Mines Director to settle disputes, while Rural District Councils will be awarded powers for communal registration and custodianship of land.

“We have come up with a solution where Rural District Councils register land for pasture on behalf of the communities. This is part of the solution for this farmer mining conflict which is now with the Ministry of Mines, they will reveal this when the act is finalized.

“Dispute settlement and civil penalty regime, the act is very deficient on administrative judgment to guide the Provincial Mining Directors in terms of how to manage conflict and adjudicate on conflict, we have aligned this to the constitution.

“PMD will be granted power of enforcing environmental obligations, compliance with mining title or license, removing the criminal obligation to civil crimes as some case taken as criminal could be better resolved through civil means,” said Dias

263Chat

The national lockdown imposed to curb the spread of the Coronavirus has impacted negatively on the gold sector, lowering production and spiking cases of gold smuggling, a new report by a civic watchdog Centre for Natural Resource Governance (CNRG) has revealed.

In the report titled ‘From blood diamonds to blood gold’ CNRG interrogates origins of machete violence, which rocked the gold sector claiming over 200 lives in 2019, examines drivers of artisanal mining, and gives recommendations to policymakers.

CNRG said it has noted that the disrupted international travel has fueled illicit trade facilitated by
corrupt security officials, while smugglers have also taken advantage of the country’s porous borders.

“The lockdown also slowed down artisanal gold production due to limited supply of chemicals such as cyanide which is imported from countries that closed their borders much earlier than Zimbabwe.

“CNRG noted that smuggling went up during the lockdown as the illicit gold market adapted to the lockdown conditions in various ways. RG Mugabe International Airport remained open to both passenger and cargo planes whilst the country’s porous borders remained active.

“The closure of Beitbridge Border Post has seen a rise in organized crime as security officials on both sides of the border facilitate illegal passage of smugglers into both countries,” reads part of the CNRG report.

CNRG recommendations to government in ending machete violence calls for formalization of artisanal miners to avoid the deliberate conation of artisanal and small-scale mining for expediency.

It also noted the influx of Zimbabweans into artisanal gold mining pushed by economic hardships, despite efforts to regulate artisanal mining being resisted by both large scale miners and government.

CNRG said if the artisanal sector continues operating without proper regulation it could soon degenerate into a national security crisis as the gangs continue to enrich themselves from easy pickings.

“…the majority of Zimbabweans have been turning to artisanal gold mining as it gives them an opportunity to earn the greenback which gives them stronger purchasing power. People have been digging anywhere and everywhere, where they suspect there are gold deposits.

“The chaotic situation in the artisanal mining sector which is characterized by an ever-rising number
of desperate artisanal miners preyed on by armed gangs with links to politicians poses a security a threat to the country.”

CNRG said that there is a ‘danger that some gangs shall be armed by their political godfathers to venture into wide-scale organized crime’ urging the government to respond accordingly to adopt policies and legal frameworks to curb this.

It said government must among other things end impunity of perpetrators by commissioning a thorough investigation on the surge in violence in the sector and bring perpetrators to book.

“Amend the Mines and Minerals Act and the Environmental Management Act to ensure thorough land rehabilitation after mine closure. Impose tough sentences on those found guilty of machete violence or robberies in the ASM sector.

“Adopt artisanal mining best practices from around the world and ensure the sector is properly regulated for the safety, security, and benet of the miners, women, communities, and the country.

“Craft an artisanal mining policy that improves the safety, health, and well-being of those involved in
the sector,” said CNRG.

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THE Zimbabwe Diamond and Allied Minerals Workers Union (ZDAMWU) has called on the government to close mines in the wake of a surge in Covid-19 cases in mining communities across the country.

ZDAMWU general secretary Justice Chinhema said the government must move in to enforce a temporary shutdown of mines to allow testing of all workers.

“Statements from Bulawayo Mine, How Mine, Unki Mine, Hwange Colliery indicate that the mines have been hit by the wave,” Chinhema said.

How Mine is reported to have the highest number with 10 infections as of Sunday.

“In light with this, ZDAMWU is calling the government to enforce a temporary shutdown of all mines to allow testing of all workers and everyone staying in compounds as well as carrying out proper disinfection against Covid-19 to safeguard workers and their families,” Chinhema said Sunday.

The veteran trade unionist insisted, “lives matter ahead of profits”.

The union, Chinhema said, is calling on all mines to start putting in place strict measures by proving adequate Personal Protective Equipment to their workers and families who stay within compounds as a matter of urgency, especially Chinese employers.

“It is sad to note that the government allowed mines to operate against our advice without putting strict measures to protect their workers at the onset of the lockdown in April this year,” he added.

Chinhema further said the continued influx of imported cases especially from Botswana and South Africa has affected communities in the Southern parts of the country as returnees are reported to be crossing the borders using undesignated points.

“We are calling on the government to move fast and curtail this crisis before it continues to spread in the mines which are closed communities,” he said.

New Zimbabwe

Prospects of Zimbabwe’s economic recovery in the short to medium appears gloom after local mining firms continued battling rising costs, narrowing margins, and subdued commodity prices on the international market, analysts and experts have said.

Mining is the country’s largest foreign currency earner, accounting for over 60% of export receipts.

The outbreak of the coronavirus pandemic and low business activity, analysts project will result in the economy contracting 10% this year.

Some of the miners who spoke to Business Times this week said the sector was facing an uncertain future.

The terrible prospects will make it difficult to continue operating, they indicated.

Most players, especially coal mining companies, indicated that they are selling the resource at a price below cost, resulting in unprecedented impact on earnings, balance sheets, and investor perceptions of the sub-sector.

Industry players, this week made a distress call saying the sub-sector has literally dug itself into a hole and there is still a terrible prospect for miners in Zimbabwe.

The price for coal delivered to ZESA’s thermal power stations at Hwange, Bulawayo, Munyati, and Harare, has been fixed at US$26.50 per tonne since July 2011.

There was little impact between 2011 and June 2019 because the local currency and the United States dollar was trading at parties.

Now, the price is being paid in Zimbabwe dollars-following its re-introduction last year in June- at the prevailing foreign auction exchange rate.

This translates to as little as ZWL$2,035.20 per tonne using this week’s auction rate of ZWL$76.8:US$1. This is said to be below the cost of production.

Consequently, many projects in the sub-sector, players told Business Times, continue to be delayed or shelved completely because the price is inadequate to fund capital projects.

“It is difficult to continue operating. It is actually crunch time for coal miners because it (coal) has been fetching a price lower than the cost of production, leaving us on the margins.

We hope current negotiations with the Zimbabwe Power Company(a power generation subsidiary of ZESA) will bring a new price regime, which will be cost-reflective,” an executive with Hwange Colliery Company Limited, which is under administration, who preferred anonymity because is not authorised to speak to the press told Business Times on Tuesday.

Raymond Mutokonyi, the Makomo Resources boss and chairman of Coal Producers Association, had not responded to enquiries sent to him on Tuesday by the time of going to print. Information gathered by the Business Times shows that the price coal miners are fetching from ZESA is the lowest in the region.

Coal miners in Botswana and Zambia are getting an average of US$40 per tonne while those in South Africa are getting about US$50 per tonne.

The crisis confronting Zimbabwe coal miners has been compounded by a slowdown in China and India consumption, which have wreaked havoc in the sector. China and India are the world’s biggest consumers of the mineral.

There has also been a steep fall in prices for top-quality thermal and coking coal on the international market in recent months, meaning sellers at several international mineral exchanges, including the famous London Metal Exchange, have lost faith in the fossil fuel resulting in prices falling this week.

The prices have remained under heavy pressure amid oversupply concerns as production remained strong at major producers especially those in Australia and Indonesia in the face of weaker demand from China and India, the world’s largest consumers of the product.

Apart from that, coronavirus lockdowns have severely dented demand for coal. The price of the fossil fuel used to generate electricity in power stations is tumbling at the international market in the past few months due to the coronavirus pandemic.

According to Argus, a data provider, the overall fall in consumption has also been well pronounced in Europe as well, resulting in the price of thermal coal shipped to that continent this week falling to its lowest level since 2003 to sell at below US$40 a tonne. Zimbabwe miners are not alone in this predicament.

Even the price of high-quality Australian coal, which is the benchmark for the vast Asian market, sold to Europe, has dropped to a four-year low to US$51 per tonne this week, down from about US$68 a month ago, according to the latest assessment from Argus.

Prices of coal at international markets have been hovering around US$55 per tonne in April this year but it continues with its downward trend to sit at about US$49 per tonne this week.

It’s expected to continue southwards pressured by the rise of cleaner energy sources especially solar.

Local gold and platinum miners also battle the same fate. One of Zimbabwe’s largest gold producers, Rio Zim, recently put its mines under care and maintenance due to viability problems.

The price of gold has this week gone down by US$4.50 per ounce to US$1,938 per ounce, according to New York Mercantile Exchange.

Platinum also fell by US$6.63 to US$938.71 per ounce. At its peak, platinum, reached its highest price early 2008 at US$2,252 per ounce but after the collapse of Lehman Brothers-once United States’ fourth-largest bank, in 2008, and the start of the global crisis, there was panic over the industrial outlook of metals such as platinum.

Zimbabwe has the world’s second-largest proven platinum resources after South Africa, estimated at 2,8 billion tonnes of platinum group metals (PGMs) ore.

Three mines are engaged in the production of PGMs and associated metals from the Great Dyke.

These are Zimbabwe Platinum Mines (Zimplats), Mimosa and Unki Platinum Mine.

There are several others which are however still under development.

The Chamber of Mines of Zimbabwe (CMoZ) which represents major mining companies in the country, expect mineral production to fall by 60% in the second half of this year due to the impact of COVID-19, hurting Zimbabwe, which heavily relies on the sector for scarce greenback.

Local platinum and nickel miners which sell unprocessed products to South African refineries could be hard hit by the COVID-19 lockdown in South Africa due to logistical complications in transporting minerals to that country.

“It is estimated that mineral production may decline by about 60% with revenue losses exceeding US$400 million,” CMoZ said in a note to members, which was seen by Business Times.

Zimbabwe’s ferrochrome producers are also feeling the pinch. Zimbabwe’s largest producer ZIMASCO was recently put under care and maintenance due to COVID-19 and falling prices of the mineral. Zimasco is owned by China’s Sino Steel Corporation.

The fall in commodity prices comes at a time when the Government of Zimbabwe has identified mining as the pillar of economic revival.

Several experts said metal prices were likely to fall further this year.

Analysts say the outlook could be bleaker for the mining industry which is strategic to the Zimbabwean economy.

Despite this, mining remains the highest foreign currency earner, accounting for about 60% of the country’s export earnings.

It contributes to about US$3bn to the gross domestic product.

But, most miners’ average capacity utilisation is now below 60%, compared to 75% this time in 2019, due to acute power outages, inadequate foreign exchange allocations, capital shortages, high-cost structure, and absolute equipment, according to the CMoZ.

The platinum group metals (PGMs),however, were operating at close to 100% capacity utilisation. Gold miners expect a negative output change of between -5%, to -35%, platinum 0%, to -7% , diamond -30%, to -40%, chrome ore -10%, to -20%,nickel -2%, to -10% and coal -10%, to -40%.

Zimbabwe miners are also battling low ore grades and shafts are getting deeper, stretching more than a kilometre , something which is costly, according to mining sector players_Business Times