Gold deliveries down 13% in H1
Zimbabwe’s gold deliveries have gone down 13% to 10.597 tonnes in the first six months of 2020 from 12,294 tonnes achieved in the same period last year as the sector takes a hit from foreign currency constraints and Covid-19 restrictions which affected small scale producers, latest data has shown.
The development comes at a time when the economy is suffocating from foreign currency constraints and relies on the yellow metal for the greenback required to oil the economy.
Gold is the highest forex earner and contributes 38% of the country’s total earnings and more than 60% to the mining sector which is the highest forex earning sector in the country.
Zimbabwe’s gold exports were up in January and May with the rest of the months down during February, March, April, and June due to lockdown restrictions which limited artisanal miners to operate.
Government has increased fuel allocations to gold miners from last year but the lockdown and the effects of coronavirus have thwarted miners to get useful consumables from China.
Experts say gold mining especially (small scale) was greatly affected by lockdown regulations as social distancing needs to be observed.
Fidelity Printers and Refiners general manager Fradreck Kunaka told Business Times that the gold deliveries are likely to go up in July after miners familiarise with the new gold trading regulations.
“Gold deliveries were 6% down to 1,409 tonnes in June 2020 from 1,501 tonnes in June 2019. From 1,409 tonnes, small scale miners extracted 0,539 tonnes and secondary miners hauled out 0,869 tonnes.
“Deliveries during the month of June were recorded at 1.4 tonnes, the reason behind this decline could be Gold deliveries down 13% in H1 attributed to the fact that deliveries for the month coincided with the release of the new Gold Trading Framework published on May 26,” Kunaka said.
“Many stakeholders are still trying to understand the implications of the new payment method, hopefully, with time they will adjust and start bringing in their gold using the formal channels.”
The country’s gold export earnings have gone up 2,7% to US$409.7m from January 2020 to May 2020 from US$398.6m earned during the same period last year due to the review of foreign currency retention threshold and increased fuel allocations this year.
In January, gold export earnings were US$98m in January 2020 from US$70.4m, while in February export earnings were US$56.1m from US$77.8m.
In March, yellow metal export receipts were US$71.9m from US$88m in March last year and during April 2020 gold exports were down to US$63.4m from US$76.4m.
In May 2020, exports were up to US$120m from US$85.8m last year. Gold deliveries were down 31% in April to 1,46 tonnes from 2,12 tonnes in March due to the Covid-19 pandemic which had already started affecting the countries from which mining chemicals such as cyanide are sourced thus negatively affecting operations of various mines.
Movement of chemical consignments from the said countries were affected as early as February, with the ripple effects beginning to be felt by March. Gold deliveries surged 44% to 2,54 tonnes during the month of January from 1,77 tonnes during the same period last year due to increased fuel allocations to miners.
In February, gold deliveries fell 34% to 1,403 tonnes in February 2020 from 2,136 tonnes during the same period in 2019.
Zimbabwe’s gold deliveries fell 32 % to 1,77 tonnes in March 2020 from 2,61 tonnes in March 2019.
In December 2019, the yellow metal was up 72% to 2,77 tonnes from 1,6 tonnes during the same period in 2018.
Cumulative gold deliveries fell 16% to 27.6 tonnes in 2019 from 33.2 tonnes
in 2018 due to suspected smuggling and hostile mining policies.
Mines and Mining Development minister Winston Chitando said Covid-19 has affected the operations and a plan needs to be worked out to ensure miners recover from the big slump. Last year gold export receipts, slumped
28% to US$946m in 2019 from US$1,33bn in 2018, leaving the country with no alternatives for foreign currency as the second-highest forex earner tobacco also tumbled 7% to US$846.7m from US$907.8m due to prolonged droughts and unfavourable payment policies.
Since 2017, the economy has been grappling with foreign currency shortages, inefficient mining and processing technologies but the reduction of the forex retention levels by the Reserve Bank of Zimbabwe is believed to have impacted negatively on the deliveries. This has created arbitrage opportunities for miners to smuggle gold outside the country’s borders.
Over 34 tonnes are believed to have been smuggled out of Zimbabwe. Gold Miners Association of Zimbabwe chief executive Irvine Chinyenze said:“Covid-19 has negatively affected our operations as small scale miners were restricted to go to mines due to the ongoing restrictions.”
He said the underlying problems of forex retention continue to affect production as miners look for alternative markets. Some miners, especially large scale are believed to be selling their gold to the suspected smugglers to get more forex for their operations.
Zimbabwe is targeting 100 tonnes of gold per year by 2023, a figure which is expected to help the sector to earn US$12bn yearly and only if forex retention threshold, fundamentals and funding issues are addressed.
Gold is expected to lead the charge with US$4bn. Business Times
RioZim hopeful over RBZ debts
ONE of Zimbabwe’s largest gold miners, RioZim, says it has received an insignificant amount from funds owed by gold buyer, Fidelity Printers and Refiners (FPR), while delayed payment has put the firm under ‘enormous financial stress’.
FPR is the country’s sole authorised gold buyer and it is a division of the Reserve Bank of Zimbabwe (RBZ). The listed mining company said last month it was owed US$2,46 million and $68,48 million (Zimbabwean dollars for gold deliveries.
The gold mining entity said it last month was struggling to pay for electricity, salaries and fuel, costs it said were all denominated in US dollars.
However, RioZim said there was no dispute between the company and FPR or the central bank on the amounts owing and that discussions regarding the overdue payment were still in progress between itself, FPR and the RBZ.
“It is therefore the company’s hope that the issue can be resolved expeditiously to capacitate the company to meet its operational expenditure requirements,” said RioZim company secretary Per Chiurayi in a statement yesterday.
RioZim said it was confident the amount owing will be received eventually, but the delayed in payment was “placing the company under enormous financial stress”. RioZim operates three gold mines namely Renco in Masvingo, Cam and Motor in Kadoma and Dalny Mine in Chegutu.
Apart from the three gold mines RioZim also operates RioZim Energy, which is developing a 2 000 megawatt power plant in Sengwa, Gokwe North, Rio Base Metals comprised solely by Empress Nickel Refinery and Murowa Diamonds, a small-scale but efficient and viable open cast diamond mining operation in Zvishavane.
One of Zimbabwe’s biggest gold miners and ZSE listed entity last month said it had been forced to stop gold mining operations due to inability to meet operating costs.
RioZim attributed the challenges to the RBZ’s retention threshold and the pegged exchange rate, an arrangement that has since been removed and replaced with a weekly auction system.
Following a revised framework, gold miners are required to surrender 30 percent of their foreign currency earnings to the RBZ, which is then liquidated at the ruling exchange rate and paid in local currency.
So contentious has been the issue of delayed payment that in 2018, RioZim suspended operations at Cam and Motor, Dalny and Renco Mine after claiming it had run out of money to import “cyanide, activated carbon, explosives, as well as spares for the repair of equipment among other items”.
Again in February 2019, RioZim suspended operations saying it had “experienced significant and persistent delays in payment of its foreign currency allocation for deliveries made to FPR.
Gold production is key to Zimbabwe’s export performance, raking in US$1,3 billion in export earnings from 27,6 tonnes of gold in 2019, up from US$1,1 billion recorded from an all-time high output of 33,2 tonnes in 2018_Business Weekly
Towards a workable Gold Producers payment model
Primary producers of gold in the country would have felt some respite in the wake of the inaugural Reserve Bank of Zimbabwe (RBZ) foreign currency auction, held on the 23rd of June 2020, when it was announced that the interbank foreign exchange rate had shot up by 128%, from Zwl$25 : US$1 to Zwl$57 : US$1.
By: Daniel Nhepera
The new exchange rate was a representation of the weighted average of the bids placed by prospective foreign currency buyers at the auction, and it would be similarly adjusted on the Tuesday of every week to represent the weighted average of bids at the auction held on the day. As such, the producers would have been buoyed further by the results of the 30 June 2020 auction, when the weighted average of bids nudged up by a further 11.8%, landing the week’s exchange rate at Zwl$63.7: US$1. As symptomatic of an ailing domestic currency as this inflating of the exchange rate might be, the narrowing of the disparity between the interbank and parallel market exchange rates pleasantly represents prospects for increased earnings from gold deliveries to Fidelity Printers and Refiners (FPR) for primary producers of gold.
The FPR gold trading framework, which took effect on the 26th of May 2020, instructs for 30% of the value of gold deliveries from primary producers to be paid in local currency at the prevailing interbank foreign exchange rate. Prior to the first RBZ foreign currency auction, the interbank foreign exchange rate of ZWL$25: US$1 was pitted against an adversary parallel market exchange rate of about ZWL$100: US$1. Making us of the June 2020 average London Bullion Market Association (LBMA) gold price of about US$59 per gram, it is notable that primary producers stood to receive an effective payment of US$45.73 per gram (US$41.30 and a Zwl equivalent of US$17.70 converted at the interbank exchange rate). This represents about 77.5% of the international value of their gold. Under the new interbank exchange rate, however, the producers are now set to receive an effective US$52.57 per gram, making up 89.10% of the international value of their gold. The situation is set to improve further for the producers as the foreign currency auction system progressively readjusts the interbank exchange rate towards convergence with the parallel market rate.
Amidst the pomp of an improving trading environment for primary gold producers, it is imperative to spare a thought the Artisanal and Small Scale miners (ASM), who, while stuck at a fixed price of US$45 per gram in 100% hard currency, evidently got the short end of the FPR gold trading framework stick. The ASM sector has seen no benefit from the bullish international gold prices, nor the welcomed introduction of the weighted average interbank foreign exchange rate, which has both evidently improved conditions for their fellow producers in Zimbabwe’s gold sector.
In the wake of FPR’s announcement on the gold trading framework, the Zimbabwe Miners Federation, an umbrella body for over 50 small scale mining associations across the country, refuted the imposition of a fixed price system and proposed for the ASM sector to be placed on the same gold trading framework as the primary producers. The disparity between the market clearing LBMA price and the FPR fixed price was cited as an arbitrage opportunity for illegal gold buyers. To exacerbate the problem, ASM gold producers have an inherently high marginal propensity to gold prices, meaning they would sooner sell their product to a buyer offering US$45.50 per gram over one offering US$45 per gram as they look to gain maximum value from their toil. Resultantly, with the increasingly widening gap between the ASM fixed price and alternative payment options, the gold leakage problem may in fact degenerate than relent under FPR’s new gold trading framework.
Credit remains due for FPR’s efforts, however, as the price-fixing model they adopted mimicked the somewhat successful Gold-Stabilization Scheme which was introduced by the Government and the Reserve Bank of Zimbabwe (RBZ), in partnership with the mining industry in 1984. Under this scheme, the RBZ would buy gold from producers at a floor price of Z$16.07 per gram (US$14.30), where global prices at the time average about US$12.50 per gram. In the event that the market price soared above the floor price, the RBZ would pay producers the Z$16.97 per gram plus 75% of the market differential. The remaining 25% was retained by the RBZ to liquidate the account they used to pay producers from when the market price fell below Z$16.97 per gram. The Gold-Stabilization Scheme is credited for aiding in maintaining gold production at a respectable average of 14.8 tonnes per year between 1984 and 1988.
The allure of the scheme to gold producers was that the floor price was initially set lucratively above the prevailing global price, albeit in an exceedingly fluctuating market. ASM producers, in particular, stood to immediately gain from formalising their operations and affiliating with the RBZ. A further appeal of the scheme was the security offered RBZ’s retention of 25% of the price differential during a price boom. This gave the producers assurance that during a price slump RBZ would still be able to meet its floor price obligations. By contrast, FPR set its 2020 fixed price well below the global price, in a strengthening market. This is unlikely to trigger the mass formalisation of operations by informal miners, nor set off gold deliveries to FPR in hordes from ASM producers. Given the liquidity challenges in the country presently, there is also the concern on whether FPR would be able to maintain payments of US$45 per gram should global prices fall below the fixed price. Suffice to say, the fixed price model by FPR has not won over many hearts among ASM gold producers.
There is a silver lining however in that FPR has stated that it is willing to take notes from stakeholders and observe trends in the market to the end of making necessary and appropriate adjustments to the gold trading framework. The continued strengthening of gold prices would thus be expected to prompt such adjustments. Taking from the submission by the ZMF, an adjustment in the ASM framework to match that of the primary producers should take precedence. This is because it allows for the strengthening gold prices to add impetus to ASM mining activity as miners will look to ramp up output to optimise resource rents. Narrowing the gap between the effective payment received by the miners and the LBMA price, US$54.94 per gram, and US$61.64 per gram, as at 30 June 2020 PM, respectively, would also close out some opportunities for arbitrage buy illegal buyers. A progressive convergence between the interbank and parallel market exchange rates is expected the close the gap further.
In appreciation of the hardship likely to fall upon FPR in meeting ASM payments in 100% foreign currency under the 70%: 30% framework, a conversation has to begin over the payment of ASM producers electronically via FCA Nostro Accounts. This will, of course, be a particularly contentious topic, given the banking public’s frail confidence in the banking system at present, as well as the numerous barriers to financial inclusion for the miners in the hinterlands who would have scant access to electronic points to make use of their funds. It would be a long road, but one worth being ventured valiantly by FPR and the RBZ for two reasons in particular, among many: 1) to imperatively meet the Eastern and Southern Africa Anti-Money Laundering Group’s requirement for Governments to minimise the use of cash in making large sums of payment as this makes the countries vulnerable to money laundering, terrorist financing, and proliferation financing; and 2) to ease the requirement for the importation of hard currency into the country, where financial embargoes have seen the process become increasingly difficult.
There is therefore much need for effort, will, and cohesion between all stakeholders in the gold sector if a workable producer payment model is to be achieved for the country’s top and most important foreign currency earner.
This article first appeared in the Mining Zimbabwe Magazine July 2020 issue
INTERVIEW: Sophia Takuva not just the beauty but brains and hard work
Sophia Takuva not just the beauty but brains and hard work.
When one hears the term small-scale mining the first thing that comes up is dirty and fierce men who are well known for violence. Little is known about women taking a leading role in the Zimbabwe mining industry.
Mining Zimbabwe met Sophia Takuva a small scale miner in her early thirties who is not just the beauty but brains and hard work. She specialises in gold, chrome, and gemstone mining. On chrome and gemstones, Sophia Takuva is in a partnership or a syndicate (as its popularly referred to in mining) with other women. Here is how our interview went.
Why did you venture into Mining and why specifically gold mining?
I ventured into mining because of the benefits. I take mining as a business, though I am still small I’m trying to do it sustainably and build something great out of it. I’m more into gold mining because it is easier and requires less capital than other minerals.
What have been your achievements since venturing into mining?
I have managed to live /survive in a respectful way. I work to earn a living that’s my number one achievement. I’m working on building a home, I’m taking care of my family including paying fees for less fortunate kids. I am currently building a mining equipment and motor spares business. I have and I’m still empowering women in the mining sector and mining communities through educating them on sustainable mining and sustainable livelihoods. I dedicate time to empowering women and girls to stand up for themselves and build their life through the hard work of their hands.
What has been your biggest challenge in the Zimbabwe Mining Industry?
My biggest challenge has been financing business and exploration. Mining is capital intensive and it is not easy getting a loan especially without production and exploration records.
Have you tried approaching Fidelity for the Gold Initiative Development Fund
Personally No, but I have helped other established women who had a good fidelity record to apply for GIDF but they were not successful in acquiring the loan.
How is it working with men and being the one in charge?
As a woman, I work and oversee my mining business and my experience in working with men has truly been a journey and a hard one. Men are tough human beings. Even if they are your employees they sometimes challenge you. So as a woman, I have managed to work well with men while respecting them as men, and keeping my values as a woman. At work, I deliver and take control of my ground. We set ethics and values that are followed as we work.
How is it in general for women working in the mining industry
The mining industry is now flocked with women though most women’s work in ASM is relegated at the back, women are big players in the sector. They are mine owners who employ. They supply equipment and machinery. Some are into artisanal mining and they work hard there producing gold, chrome, gemstones and they contribute immensely to the development of the country through foreign currency earnings and revenue.
Considering you come next door to a place famed for Machete gangs how is has it been for you as a woman in the mining industry?
The machete wars are a threat to every miner, men, and women. We survive machete gangs by God’s grace because no-one can predict when or where the gangs can force their way into your mine. Miners work with the police though it is taking longer to resolve the gang issues we hope for the better.
Mining is getting popular by the day and there are some women out there who may be interested but fear the negativity associated with mining. What is your advice to them?
My word to women out there is “Women can do it, come let us work together and build our society and change lives. Wherever you are engaged in women miners forums, mining institutes, online, social media platforms to learn and get mining experience. For those who want peg, go to the mines office purchase a prospecting license, and get a pegger, peg your mine. For women who want to supply chemicals and equipment follow the business procedures and come to mining districts and do business”.
Some men say women should not be near mines at that time of the month. Has it ever been an issue to you, and what do you say to those with such beliefs?
On that myth, I say it is not true. Women should not listen to those because it’s a discriminatory door that will open other doors of theft and overpowering by males who want women to believe that how God created them is a curse on other days. Periods happen to everywoman even those who work in big mining companies and they go to work like that its a natural order of things that we need to embrace.
The world is currently battling Covid-19 Pandemic. How are you ensuring your workers are safe from the pandemic?
I ensure the safety of my workers by following recommended health regulations, washing hands, sanitizing, social distancing, and above all wearing PPE.
You are a popular miner in Zvishavane and Zimbabwe as a whole. What have you done to encourage more women to venture into mining?
I am a member of the Zvishavane Women Miners Association. We accommodate every woman who wants to learn about mining, ASM women miners, and aspiring miners to empower them to see through us that it is also possible for them to do mining.
Mining has a stigma of violence attached to it and all sorts of negative stories. What you say to a Lindokuhle who is overseas or Paidamoyo in Harare to assure her it’s a safe industry that she can invest in.
In every business there are challenges but winners don’t walk away or hesitate. They walk through them to success. Mining is a business and it accommodates everyone. As women don’t fear the written or reported violence, come let us stand together and fight the violence against women against humanity in all sectors so we can pave a way to our future generation, and create a space for our sisters and our young girls tomorrow for successful women businesses. Venture into mining and be financially free.
Besides mining what does Sophia enjoy doing?
Sophia Takuva enjoys reading and writing, she is a blogger on extractive industries and women’s rights. “My blog is Sophytak Sophia Takuva @mining Blog”.
Trigger happy Chinese mine manager released on bail
- Zhang was arrested after he shot and injured two employees Wendy Chikwaira (30) and Kennedy Tachiona (39).
- Xuelin appeared before Magistrate Edwin Marecha and was not asked to plead since he had no ‘certified’ interpreter.
- The accused was proposing to pay his workers in Zimbabwean Dollars while the workers were demanding to be paid in the United States of American Dollars.
A Chinese national Zhang Xuelin (41) who shot and injured two employees over a salary dispute at Reden Mine located in Shamrock Gweru recently, has been granted a 10 000ZWL bail by a High Court Judge in Masvingo.
In granting Xuelin bail today (Tuesday) Justice Garainesu Mawadze ordered Xuelin to reside at his known address number 1 Maple Road, Windsor Park in Gweru and to report at ZRP Gweru every Friday until the case is finalised.
Xuelin was also ordered not to interfere with state witnesses. Justice Mawadze ordered the accused to surrender his passport and temporary resident permit with the Clerk of Court in Gweru.
Xuelin will also be subjected to any immigration regulations in terms of the law says Justice Mawadze in granting him bail.
The Chinese national who was arrested three weeks ago first appeared at the Gweru magistrates court on the 22nd of June, 2020 and was remanded in custody to 7 July, 2020.
Xuelin appeared before Magistrate Edwin Marecha and was not asked to plead since he had no ‘certified’ interpreter.
Zhang was arrested after he shot and injured two employees Wendy Chikwaira (30) and Kennedy Tachiona (39).
It is the states’ case that on the 21st of June, 2020 at about 0915 hours, the two complainants namely Kennethy Tachiona aged 39 years of Reden Mine, Shamrock Gweru and Wendy Chikwaira aged 30 years of Reden Mine, Shamrock in Gweru were amongst about 30 mine workers who were having a dispute with the accused over their wages.
The accused was inside the yard while the complainants were outside the yard.
The accused was proposing to pay his workers in Zimbabwean Dollars while the workers were demanding to be paid in the United States of American Dollars.
The first complainant Tachiona argued that the accused Xuelin had promised to pay them in United States of American Dollars at the time when they got employed.
According to the state, that did not go down well with the accused who then listed those who were on the fore front and promised to terminate their employment contracts.
The court papers further stated that the first complainant was amongst those listed and was told by the accused that he had been fired. The first complainant then told the accused to give him his wages and terminal benefits.
It is the states’ case that the two Tachiona and Xuelin failed to reach an agreement and Tachiona opened the gate and charged towards the Xuelin. Tachiona was refrained by Blessing Manyeruke a security guard at the mine.
The court papers further shows that a verbal altercation ensued and during the misunderstanding, Xuelin drew his FN pistol serial number 76C25381 and fired towards Tachiona.
He shot him thrice on the right thigh and twice on the left thigh resulting in him falling to the ground.
The record states that Tachiona was 7 metres away when he was hot.
Tachiona, who is the complainant number one, sustained serious bullet open wounds on both legs.
It is said Xeulin further kicked Tachiona with his booted feet all over his body. Xuelin then fired one shot towards other workers and the bullet grazed the second complainant Wendy Chikwaira’ chin and he suffered a serious wound on the chin and the other workers dispersed.
The matter was reported to the police leading to Xuelin’ arrest.
Police recovered the firearm from Xuelin and five spent cartridges were also recovered at the scene.
Xuelin is expected back in court on the 6th of August, 2020. Midlands News
ZCDC seeks prospecting rights for gems
STATE-owned Zimbabwe Consolidated Diamond Company (ZCDC) has applied for exclusive diamond prospecting rights in an area covering 38 573 hectares located in Chihota, Mashonaland East province.
In a general notice 1 093 of 2020, government said: “It is hereby notified, in terms of section 87(4) of the Mines and Minerals Act Chapter 21:05 that Zimbabwe Consolidated Diamond Company Private Limited has applied to the Mining Affairs Board for an exclusive prospecting order, over an area described in the schedule in the Mashonaland East mining district in relation to map reference Chegutu SE 36-9 second edition and of the scale 1:250 000, produced by the surveyor-general.”
ZCDC intends to prospect for diamonds within areas which have been reserved against prospecting pending determination of this application.
An exclusive Prospecting Order gives mining companies express rights to search for minerals and peg claims in designated areas.
However, concern has been raised that some companies are not scouting for minerals but are only holding EPOs for speculative purposes.
“An area of approximately 38 573 hectares in extent, situate in Mashonaland East provincial mining district bounded by a line commencing at a point grid reference (36KTR 283855-8004013) which is approximately 17,2km southeast of Trig beacon 4714 Cecil,” the notice further read.
As alluvial diamonds are running out in the Marange area, the company is desperately exploring other areas.
ZCDC has put in place an ambitious target to produce 4,1 million carats this year.
At its peak in 2012, the country produced 12 million carats, before production plummeted to 2,8 million carats in 2018.
Amid fierce resistance, authorities in 2015 directed a consolidation of all diamond mining companies in Zimbabwe to form ZCDC. Private mining firms were ordered to terminate operations, leave their equipment and evacuate premises.
Chinese firm, Anjin conjointly owned by Anhui Foreign Economic Construction Company Ltd and Matt Bronze, an army investment vehicle has since been directed to commence operations in Chiadzwa.
Government last July launched an ambitious roadmap for the achievement of a US$12 billion mining industry by 2023.
Source:Newsday
Women in Mining Communities Fail to Access Contraceptives Due to Lockdown Restrictions
MOST women living in remote mining areas are failing to access contraceptives due to Covid-19 lockdown restrictions, which have limited members of the public’s travel.
This has placed them at the risk of having unwanted pregnancies and other sexually transmitted diseases.
In most mining communities, only male condoms are available as a form of contraceptive but the women are unable to force their partners to use them.
Speaking at the Zimbabwe Environment Law Association (ZELA) gender and extractive symposium, last week, female participants said the other challenges in mining communities was that a high number of girls would fail to return to school later this month as they had fallen pregnant during the four-month closure of schools and other businesses.
“We are failing to access family planning tablets at our rural clinic and this has resulted in many unwanted pregnancies,” said Barbra Nyoni from Zvishavane in the Midlands province.
“The only thing that is available are male condoms but as rural women, we cannot introduce the concept of using condoms at home. This will cause gender-based violence in the home. The husband will ask many questions once you raise the use of a male condom.”
A Chiadzwa Community Development Trust leader Luckmore Mataruse said due to the prolonged lockdown, some women had been forced into sex work to support their families as their husbands are no longer employed.
“Some women are indulging in paid sex with older men working at the diamond mining company so that they get paid to feed their families,” he said.
“Some married women are also leaving their husbands preferring diamond panners who are providing for them during this lockdown. We are also seeing a lot of child marriages because of the lockdown.
“I don’t think many young girls will return to school when they reopen because a lot of them have been married or impregnated.”
Clara Magodeyi from Arda Transua complained villagers were moved from the Chiadzwa mining diamond field and forced to settle in an area where the village head has to write letters for them to travel to seek medical attention.
“The police manning roadblocks want us to produce letters that we are going to get contraceptives,” she told participants.
“However, for some of us, we stay in an area without village head and for us to travel to the nearest District Administration (DA) offices to get a letter to travel, you also need a letter to get there.” – New Zimbabwe
Cheap imports killing local industry
Mining equipment suppliers in Zimbabwe are facing serious viability challenges stemming from currency volatility, cheap imports among others.
By Dumisani Nyoni
Mining equipment suppliers are some of the most important key players driving the mining sector, which is one of the country’s foreign currency earners.
However, the players in the industry revealed that they were struggling to make ends meet due to challenges such as currency volatility, cheap imports from China, and forex shortages to import raw material.
Their situation is more compounded by the outbreak of COVID-19 which has disrupted the supply chain.
“We are facing a serious challenge of forex to import the raw materials. The other issue also is about pricing. There is a lot of currency instability in this country, making long-term planning very difficult. Also, pricing has not been consistent,” General Beltings general manager Joseph Gunda said.
General Beltings manufactures and distributes general-purpose and specialised reinforced conveyor beltings for small scale miners.
The company is also facing challenges of cheap imports coming through the country’s porous borders.
Gunda hoped that the newly introduced forex auction system will help stabilise the local currency and eliminate the major macro-economic distortions in the economy such as the exchange rate.
The authorities recently abandoned the fixed exchange rate and adopted the forex auction system in a bid to stabilise the local currency.
Another equipment supplier, Yagden Engineering managing director Wayne Williams said the government should intervene to save the local companies from closing shops.
Yagden Engineering deals with steel fabrication, mining equipment, machining, and milling equipment.
“Chinese are bringing in substandard equipment into the country and this is a serious concern…I think there must be higher duties on equipment supplied by the Chinese,” he said.
“Our job is to support Zimbabweans. The future of our country are the children of Zimbabwe, we need to train people today for tomorrow. So much is imported from China and Zimbabweans are suffering in the manufacturing industry and it is very sad to see (that happening),” Williams said.
“We used to survive without Chinese products, making everything in Zimbabwe. It’s very sad to see how many businesses have closed and how many people are out of work because of cheap products flooding the market. Zimbabweans are the future of our country Zimbabweans no one else.
Shepco Industrial Supplies, a division of Shepco Group, recently pleaded with the government to support it in terms of raw materials so that it could boost small-scale miners’ production.
The company manufactures mining equipment such as locomotives, underground loaders, hoists, headgears among others, for large and small scale miners.
But due to the shortage of steel in the country, the company is struggling to make some of this equipment.
Ziscosteel, once the largest employer in the country, collapsed due to government bungling, looting, corruption, and mismanagement.
This article first appeared in the Mining Zimbabwe Magazine July 2020 issue
Mining graduates should utilise acquired skills
Mining graduates should not be myopic waiting to secure employment but need to leverage on their acquired skills and knowledge to set up own enterprises, an official has said.
Benard Rinomhota
In recent years, tertiary institutions across the country have continued churning out thousands of graduates from different disciplines but have failed to secure employment.
This has been attributed to the high unemployment rate engendered by the obtaining adverse economic climate where companies across the board have either scaled down or shut down operations.
In the context of the depressed labour market, chairperson of the Institute of Mining Research at the University of Zimbabwe, Professor Layman Mlambo said:
“Unemployment is the more reason why mining students should take their college field works and industrial attachments seriously.
“During these activities, they should identify practical things, small or big, they can later do as entrepreneurs.”
He said mining graduates must realise that when they look for employment their opportunities are narrowed to the specific sub-branches studied as individuals.
On the contrary, Prof Mlambo said venturing into entrepreneurship offers accretive opportunities to all fields in the mining sector.
“In entrepreneurship opportunities are broadened to all fields in the sector (the whole mineral value chain), by pooling together their skills,” he said.
He said given that capital is a setback hampering most entrepreneurial projects, mining graduates needed to identify opportunities in which the greatest capital is knowledge and any necessary equipment can be hired using pooled resources.
“Starting small is also strategic in this case. In principle, mining graduates can go into exploration business, consultancy, mining, and buying and selling of minerals,” said Prof Mlambo.
He said mining graduates can form exploration companies in which they produce judiciously and completely evaluated mining assets or projects for sale.
Prof Mlambo added:
“An area that requires little capital is consultancy, where the only or main requirements are brains and a computer.
“Some consultancy contracts are completely Internet-based in terms of their signing and delivery of services (without having to meet physically with clients).
“Frequent access and maximum productive use of the Internet cannot be overemphasized in broadening opportunities and capacities to deliver.”
Examples of specific areas of consultancy include environmental impact assessments, complete economic feasibility studies, geological reports, and mine planning and designs.
He said some consultancy can be done either as innovative services or responsive services and the former is based on knowledge gaps in the market identified by the consultants themselves, who then proactively develop and market knowledge products to relevant clients.
“Responsive services are based on active market demand or calls and both services can be pursued concomitantly.”
Mining graduates, Prof Mlambo noted that may form mining syndicates, acquire claims and undertake mining at a small scale for a start. “Exploitation of surface deposits and dumps, and use of custom millers or elution plants could be low-cost starts.
“With verifiable evaluated assets, they can seek financial partners or small loans from banks.
“Government’s efforts to formalise the artisanal and small-scale mining sector can never meet with greater necessity than this entrance of mining graduates into the sector,” he said, adding that mining graduates can also form buying and selling syndicates.
The mining sector is one of Zimbabwe’s economic mainstays contributing 70 per cent to the country’s export earnings.
This article first appeared in the Mining Zimbabwe July 2020 Issue