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Deal in Limbo as government invoices investor US$16 million rental fees

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The proposed multimillion-dollar coal-bed methane gas extraction project in Lupane by Discovery Investments is in limbo as the government has invoiced the investor US$16 million in-ground rental fees over four years.

The firm is one of the three entities which were in recent years granted a coal-bed methane concession in Matabeleland North province by the government.

Discovery Investments managing director Mr. Lloyd Hove said one of the challenges delaying implementation of the project was the ground rental fees required by the government.

“We are about to reach financial closure of the project but because of these issues (ground rentals), the investors are concerned.

“They (government) gave us an invoice of US$16 million over a period of four years,” he said.

In January 2018, Discovery Investments announced that it required about US$700 million to start commercial gas production.

Mr. Hove said they have appealed to the government to reduce the ground rental fees, which at this stage, is a logjam to the commercial methane gas extraction by Discovery Investments.

“We are still waiting for them (government) to respond and the major hurdle to the implementation of the project, is the issue relating to the ground rental fees, although there are other issues about the situation in Zimbabwe,” he said.

Among other issues, investments in the country have been scuttled by policy inconsistency and corruption.

Drilling of production wells at the concession to mark the beginning of commercial gas extraction was expected to begin in February last year.

The mining concern, which owns a coal-bed methane gas concession in the Siwale area in Mzola, Lupane recently announced the completion of exploration work with positive confirmatory results of methane gas.

According to the company, its gas reserves could be exploited over a period of 50 years.

It is hoped that through the exploitation of coal-bed methane gas, Zimbabwe could resurrect from being a net importer of fertilizer to a net exporter, and help preserve foreign currency.

Besides heating, power generation, and petrochemical production, coal-bed methane gas is also used to manufacture hydrogen, one of the major raw materials in the production of fertilizer.


This article first appeared in the June 2020 Edition of Mining Zimbabwe Magazine.

Interview: Mines Parliamentary Portfolio Committee chairman Honourable Edmond Mkaratigwa

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Despite Zimbabwe having vast mineral resources a lot needs to be done to improve the gains from the mineral wealth the country possesses.

Mining Zimbabwe had a one-on-one with the Mines Parliamentary Portfolio Committee Chairman Honourable Edmond Mkaratigwa. Honourable Edmond Mkaratigwa responded to some of the pressing issues the Zimbabwe Mining Industry currently faces. Here is how the interview went>

Who is Hon Edmond Mkaratigwa

Hon. Edmond Mkaratigwa is a hands-on electrical engineer, a businessman, and a politician who holds a Master’s Degree in Energy and Sustainability from the University of Cumbria, United Kingdom. He has also embarked on a PhD programme along the same domain. In summary, I am a hands-on engineer because some engineers cease to practically use their skills in life as they move on to other professional fields.

How is it working in the Mines Committee and what are your achievements so far.

Edmond Mkaratigwa: The Mines Committee is seized with a lot of issues that need its attention. The Portfolio Committee on Mines is one of the key committees of Parliament especially given that its domain is currently one of the strategic economic pedestals in the country. It is expected to help drive the creation of wealth for the country, miners, and communities in which mining is taking place. Therefore, the Committee is a key cog in the development of the country and its citizens. I am quite excited to be involved with the Committee business, and geared-up to tackle the associated ethical, responsibility, and sustainability challenges thereof.

The first achievement is that initially there has been animosity and playing to the gallery among members of the committee to the extent that it was boat rocking but I have managed to steer it to course.

Second, there has been poor linkages between the Committee and its key stakeholders including the Ministry but we have also managed to build back those bridges. The approach is important in that you get to understand where the stakeholders are coming from and going, help them build capacity, and then easily monitor, evaluate and punish where necessary, from a more holistic understanding of their operations. It also allows the Committee to constructively input into the Ministry’s efforts for the public good.

Third, we are 90% complete with the draft Mines and Minerals Amendment Bill. The road has not been as easy but the Committee developed and implemented mechanisms to ensure all targets set are achieved.

Fourth, we have managed to advocate and score on the upward review of foreign currency retention for gold deliveries to Fidelity Printers from 55/45% to 70/30% and we will look into other possible quick and longer-term wins as we move on.

Fifth and finally among the many, we are conducting the Gold Inquiry at the moment and have progressed very well with anticipation for yielding more positive results for the country and the different sector stakeholders at large.

Is the committee given budgets to travel countrywide seeing miners and hearing their plights?

Edmond Mkaratigwa: Sustainable Committee business financing in the country is a phantasm. We however have been getting tremendously immense support from Parliament and our stakeholders. Finances from some stakeholders are nevertheless naturally attached to specific committee business threads on which they have vested interests. Constant changes in hotel rates among others have also been gobbling the budgets set aside for the committee. Mind you, our committee is among the most populous committees of Parliament hence it is heavy on costs. On the other hand, we have been very initiatively flexible towards closing that gap through engaging in friendships, collaborations, and partnerships for committee business expediency.

Mine certificates are taking forever to come out leading to more and more individuals ending up conducting mining without the certificates as they fear someone else taking over. What could be the real bottleneck in mine certificates issuance and how can this be rectified?

Edmond Mkaratigwa: Our main thrust as a committee is productivity. Lack of these certificates has mostly led to unsustainable mining due to conflicts, loopholes in mineral disposal, and unguaranteed ownership with negative effects on our main thrust. We have advocated at every platform, for computerisation of the Cadastre System in Zimbabwe and we have achieved positive responses towards that while we remain relentless on it. Attending to the Cadastre System is identified as one of the solutions to the certificates problem and it was included in the 2020 budget. His Excellency the President recently reiterated Government’s commitment to have the project funded. The main challenge has been around mobilisation of the foreign currency component partly needed for the project. Another problem that has been impinging the Ministry’s service delivery capacity is understaffing. Nonetheless, we have further advocated for the Ministry to get reasonably enough resources for its efficiency as that has been its major scapegoating ‘challenge’ always mentioned previously. We achieved on that and I understand there has been an advertisement of vacancies among other aspects and since we have resumed our sittings, we will follow-up and unclog the channel if need be.

How is the ministry going to speed up mines inspections for regular miners and new applicants in light of provincial shortages of manpower (surveyors, geologists, etc)?

Edmond Mkaratigwa: The answer to this question resonates well with the one already given above. We have advocated for resources including for recruitment of more personnel and that has been provided for. In the meantime, we have advocated further for more decentralisation models for the Ministry into other districts that previously had no offices and we are making good progress. The main pragmatic solution however lays in the recruitment of more staff as things stand.

In light of dwindling mining land due to allocations by the Ministry of Agriculture and Local government, what’s the future of mining in Zimbabwe?

Edmond Mkaratigwa: It is not true that mining land is to a greater extent dwindling in Zimbabwe. In fact, there are tracts of unexplored and underexplored lands. The challenge is the nature of our miners especially small scale miners. They lack exploration resources and also, usually gather where others are already mining and in particular sometimes closer to residential areas and other areas where minerals are closer to the surface for different reasons. In addition, a few people are holding Exclusive Prospecting Orders (EPOs) yet underutilising them or holding them for speculative purposes but denying access to those with an immediate need for using them. In that regard, the future of mining in Zimbabwe is very bright subject to proactive reforms; some of which are already underway.

What is the mines portfolio doing to directly empower locals to fully understand the mineral value and engage in fair trade with foreigners who are exploiting them in minerals like Chrome, gemstones etc

Edmond Mkaratigwa: It is true we have many minerals in the country although some are less publicised yet gaining more traction at modern-day mineral markets. The main roles of Parliament are legislative, oversight, and representative. As members of the Committee, our role is both individual and collective. Individually we are ambassadors to our constituencies and the broader citizenry of Zimbabwe and we always encourage our membership to support local miners to realise value out of their efforts.

The Committee as a collective independently has fewer avenues but to initiate, share the idea, and reinforce existing institutions to ensure they empower the citizenry. In that regard, we are engaging the Ministry as well as the Minerals Marketing Corporation of Zimbabwe (MMCZ) whose mandates fall within that administrative arena. We have started doing that particularly as part of our Gold Inquiry and anticipate to come up with brilliant recommendations which we will add to our monitoring dashboard for early and effective implementation because if MMCZ becomes efficient enough, those predators are unlikely to perpetually have fertile breeding ground but withers.

Why are miners (mainly foreign) being given access to mine at national heritage sites without share structure with locals and traditional leaderships?

Edmond Mkaratigwa: That was going to be better if I had got specific examples of such mines. However, we are trying to address that through the Mines and Minerals Amendment Bill especially given that heritage sites are naturally property that has to be protected in line with the national laws. This is also among the reasons the Mines and Minerals Amendment Bill was recently not assented to by His Excellency the President of Zimbabwe Cde E. D. Mnangagwa. Share structure may not be the solution to the preservation of these sites and it cannot legalise the illegality of trespassing into heritage sites for mining purposes unless I am not getting you well. On a different issue of sharing proceeds from mines, that area is currently in fog and the visibly existing model is rooted in philanthropy that is voluntary and manifested in Corporate Social Responsibility or Investment. The nature of philanthropy is a matter of debate but the country has been focusing on building a strong industrial base for the sustainability of national development as its initial priority. Noting that, the attributed father of philanthropy Andrew Carnage (1901) advances that no country, people, or race living on alms will develop as sometimes that will encourage vice over virtue, hence the need for us to rethink the model within the national development thrust and laws.

Is there any policy measure being implemented to bar foreign nationals from engaging in small-scale mining and reserve it for locals?

Edmond Mkaratigwa: Currently, there has not been any threshold set at policy level and the expectation has been that any fortune seeker can start at any level as long as they have the ambition to grow within existing legal parameters. Zimbabwe is currently courting more investors, the land is vast and the task ahead of us is high. As a result, we may have to embrace those who share the same aspirations with us until a time it will become unnecessary. Laws can however be initiated by the citizens and such need has to be identified, justified, and advocated for with backing scientific data so that it gets a voice in the policy black box earlier. If there is any related unmerited illegality or exploitation in our society as a result of those involved in whatever level of mining, it should be raised, reported, and denounced including through legislation, system processes, and procedures.

What is being preserved for our future generations in mining?

Edmond Mkaratigwa: The question of what is preserved for our future generations and progenies in terms of minerals was going to be easily answered if we are able to give an answer on how much we actually have in terms of resource quantities as a country. In that perspective, it basically means our mining sector still has to be developed. In trying not to appear skating the question, I perceive it to be double-barrelled.

One, minerals are finite and as I have said, without knowing the quantity on and under the ground, it becomes very difficult to devise a formula for their preservation for posterity in their raw state and definably to which future temporally.

Two, we can preserve the value of the minerals we have extracted today for future generations. In our context as Zimbabwe, to me, that is more practical and that is where the question of corporate social responsibility or investment becomes handy and relevant. Let us share our current exploitations with our future generations because what we have exploited is quantitatively known. We have better control in that approach and, the present generation is not also limited in the enjoyment of the national endowments by postponing its development maximization to unknown future generations alone; which will perceivably ultimately cumulatively enjoy the fuller benefits whose potential their predecessors would have been exploiting partly. What is important is, therefore, being responsible and ethical in our current conduct to ensure the sustainability of the benefits into our future generations.

Some mining houses are not fulfilling their company corporate social responsibilities for example many Chinese owned haven’t even fixed roads to their mines, no workers’ houses as they come from their residences, no schools nor clinics let alone transport. Is the committee monitoring this or holding the mines or responsible authority to account?

Edmond Mkaratigwa: Reinforcing what I said atop, radical redistribution of wealth from those who have is tantamount to criminality and muzzling the goose that lays the golden egg in modern democracies. By the same token wealth accumulation without redistribution is ethically unfair as much as only a few people in our societies have also mastered the art of sustainably gathering wealth. Those two ideas to me, need to be thought through and merged for the common good of all and for the mutual continuity of society in a manner that the divergent self-interests are served without suppressing the virtues of handwork and innovation. In many instances, philanthropy comes later after a company has managed to fulfill legal obligations and core purpose which is profits hence we need to understand that although we can do better as the government to ensure in all big business plans especially before approval, corporate social responsibility plans which can be monitored and evaluated for total adherence are also received and approved. At the moment, corporate social responsibility or investment is more quasi voluntary hence the need for us to innovate and make it more obligatory using social and business models than the former radical approach. Because of the lack of a definite definition of corporate social responsibility or investment framework at law, it is difficult for Parliament to monitor hence, there is greenwashing to a greater extent currently at play in that regard in Zimbabwe. Also, the best corporate philanthropy is one that sustainably provides levers for the current poor and future generations to realise, maintain, and grow their own potentials often denied by poverty through virtuous means.

Are there any plans for beneficiation plants or local trading markets for our minerals and industrial produce?

Edmond Mkaratigwa: There are plans, yes and they are part of the pathways to the broader US$12 billion mining investment mark that has to be realised as scheduled. Implementation of the plans is urgent as that is expected to have huge potential for upstream and downstream economic and social benefits for the country and the broader citizenry although several other contributory primary factors have to be concurrently and sequentially harnessed as critical paths to the successful accomplishment of the conundrum.

Schools both primary and secondary are not majoring in our vast mineral resource, research, innovations, usage, extraction, rehabilitation, trade, and values. Should this not be included in the school curriculum

Edmond Mkaratigwa: That is a very important thought although it is very debatable. We have those aspects in our curriculum although the perceptions around content depth can differ. On the other end, it is also a brilliant idea to introduce mining as a standalone subject in high school but our science has been equipping our people largely to process minerals and not really to be miners. I know of some universities teaching entrepreneurship as a compulsory course to all their students who become part of the university for the first time and maybe that can be part of the launch pads. It looks a brilliant idea and that can be shared with colleagues in the education sector as they know better in terms of current curricula gaps and how the content can be fused for the greater benefit of Zimbabweans if it does not already exist adequately.

Is it appropriate for the Permanent Secretary in the MMMD to carry out his recent notice to do a wholesale forfeiture of all claims that had not been inspected by the 1st of January 2020, in light of the Covid-19 induced crisis and when in fact the mining industry, especially the ASGM is looking for supportive measures from the Ministry that would provide a stimulus? What is the ministry’s motive for taking such a retrogressive action will this not result in killing off struggling small scale mining projects?

Edmond Mkaratigwa: Government business appropriateness is normally judged within the context of theory and practice of bureaucracy, administrative law, and existing national policy guidelines. The Permanent Secretary may have acted in line with the law and official duty expectations as failure would be attributed to him as relegation of duty in-spite of surrounding circumstances such as the COVID-19 state of disaster. He therefore may have effectively played his part. On the same note, it is the thrust of government to make sure that mines are productive hence in that mood, mines must be inspected although other external environmental factors can be taken cognisant of in terms of the decisions around forfeiture. I am happy to say we have already successfully made many breakthroughs in terms of the stimulus package for the ASGM although the wheels of government sometimes move slowly though surely. The motive of government and the Ministry never being independent of the government, is to prosper the country than to harm; hence, all serious and like-minded ASGMs shall not drown. A raft of changes and efforts toward addressing those loopholes are already with us. Therefore let the ASGMs cheer-up. However, we expect them to be more productive, responsible, ethical and ambitious in conduct as Zimbabwe can only be built by Zimbabweans and with supports from its well-meaning friends and partners.

What is the role of MMCZ and the chamber of mines in the dissemination of information on the other minerals that are mined but miners are clueless in terms of evaluation and the marketing like amethyst?

Edmond Mkaratigwa: MMCZ is the government’s minerals marketing arm and it naturally has to secure markets for the country’s minerals such as vermiculite and amethyst you have rightly mentioned above among others. It is its role to communicate related mineral value information to the miners. The Chamber of Mines is an institution registered under the private voluntary organisations Act of and in Zimbabwe. Unfortunately, the Chamber mainly serves its membership but it is a key stakeholder to Parliament and in particular, the Portfolio Committee on Mines and Mining Development that I currently preside over. Both institutions work hand in glove as the Chamber represents interests of its membership. Unfortunately, though it is being addressed, the Chamber has been mainly working with large scale mining houses as opposed to small scale miners but it is lately positively working closely with the small scale miners associations. Minerals education is more possible where the miners are well-coordinated and, where the Ministry of Mines as the coordinating arm is decentralised to the people interacting with the minerals at the lowest level as is happening with the agricultural sector. Those are some of the gaps in the Ministry we are helping to identify and have them sealed off mainly through constant advocacy for the Ministry and its parastatals to be fully capacitated so that we can strongly whip it for results. We are for production and as a Committee, we are advancing that cause, hence we are working with all progressive forces be they big and small or critics and antagonists as long as that will help us achieve the common interest of having Zimbabwe’s industry sustainably ticking again by 2023.

Is the 12 billion targets by 2023 achievable and what is the strategy and what are the anchoring minerals that form the thrust of that contribution to the GDP.

Edmond Mkaratigwa: My mind is still anchored on the certainty that the US$12 billion mining industry gross domestic product contribution target is achievable by 2023 as scheduled. The strategy is there and entails the motivation of production and delivery of minerals to the government. It further encompasses research and innovation, opening up the country for business through the reduction of legislative and administrative bottlenecks, creation and promotion of harmony among miners and farmers, allowing time for the young mines to lay their eggs and grow their chicks with the certainty of the operating environment security and, flexibility reminiscent of capital growth among other aspects. Ahead in anchoring the strategy is cooperation among all stakeholders involved in mining, capacitation of key institutions and capitalisation of the miner, loyalty to the country’s vision and commitment to sustainable partnerships that benefit the capitalist and the social contractors. Whereas minerals such as gold and platinum have been at the forefront, other minerals are not very visible locally but they are of late fetching much more than those traditionally dominating the market. Those include palladium which is part of the platinum group of metals basket, vermiculite, tantalite, lithium, rare earth among others.

Mines Ministry seems to be lagging on information dissemination. Emails are never responded to as we speak the Mines website has been down for over 2weeks. Only recently has the Mines Ministry twitter account been active. Can we say miners’ concerns are being listened to?

Edmond Mkaratigwa: It is unfortunate but if it is for the past two weeks let us assume it was not prepared for the COVID-19 wake-up call for being prepared for any eventuality in our operations since we are living in this increasingly risky society. It is commendable that they have quickly adapted and initiated a twitter handle in response to novel challenges although that was supposed to have been innovatively initiated long back in line with modern trends. Delays in replying to emails might also have been due to the same challenge that forced most operational staff to stay away from the office for a while due to COVID-19 but since most facilities should be ready to operate now, we want all hands on the deck as time and tides wait for no men. There are no sacred cows to inefficiency and let me reemphasise that the committee will never tolerate corruption, excessive bureaucratic formalism that hinder development and efficiency in any of the departments and agencies that it oversees.

There has been talk of Vast Resources (AIM Listed) which is well known in Zimbabwe about them beginning operations in Chiadzwa. We have written articles that have gone viral online in Australia and there has been optimism about them beginning operations as far as 2018. That deal is yet to go through and now it is 2020. Why are deals taking too long to be completed? Doesn’t this frustrate investors? Doesn’t this go against Zimbabwe is open for business Mantra? How can the processes be fast-tracked?

Edmond Mkaratigwa: It is true that there has been talk and there is talk of Vast Resources (AIM Listed). The general challenge with business is that it involves negotiation and renegotiation sometimes. At the same time, mining is a huge enterprise that involves due diligence and long term contracts. I want to reiterate though that the country needs to achieve targets and the committee treasures the will of the masses, hard work, transparency and accountability over corruption, unnecessary bureaucracy, and hedonism. Therefore investment by Vast Resources (AIM Limited) has to be slowed down only by the company through doctrines of capital than from our part as a government unless their investment framework interests are legally proscribed by the law rather than persons. Laws should dictate the investment framework in every sector of the economy in this new dispensation as in all progressive nations. Thank you for complementing the efforts of government as its fourth estate and we are doing our best in a satisficing manner to get to the bottom of those matters for the public good and it is also our anticipation that 2020 will end with good news in that regard. Investors can be frustrated and deals can take long indeed as a result of delays in fully amending our key legislation as talk cannot replace protection and or risk that comes with written laws. The onus is on us to make our institutions more professionally independent, transparent, and accountable through the development and implementation of a professionalisation inclined legislative framework that self-markets in all sectors of the economy as we have already orally marketed the country as an attractive investment destination. Processes cannot just be fast tracked for the sake of quantity as due diligence that leads to the sealing of business deals which are above board is equally key for investment security and sustainability. Remember, mining sector investments are usually reasonably longer term.

The 55/45% gold retention has been revised!

Edmond Mkaratigwa: Let us celebrate in that regard. We advocated for 20/80% and we have won the 70/30% which is quite plausible. The committee will continue to fight for a more reasonable, holistic and wholesome stimulus package for the mining sector.  For example currently following this win, some miners are still not confident and therefore unhappy with having their foreign currency component compulsorily deposited and held in Nostro accounts. They prefer self-transfiguration of the market in terms of driving determination of how they should best handle money within their choices and environmental considerations. That is a good demand. Nonetheless, understanding that government works within systems, processes and procedures, the committee will take it up while miners need to think about it deeper for their own security and the security of those hoarding the cash, especially that the economy is bound to be transforming for the better as more motivations are initiated and advanced across sectors.

The Zimbabwe Chrome market is full of predatory buyers who purchase chrome at an average price valued at 15% of export sales prices! How can chrome producers be protected from such unscrupulous buyers?

The best way Chrome miners can be protected is through opening up local markets by the government in terms of competitiveness so that miners are compelled to deliver their minerals. Another option is for miners to form cooperatives or associations which can make their challenges collectively known, solutions collectively sought and bargaining power on the market increased. In that manner government through the Ministry and with the support of Parliament can collectively map a way to help them out.

Besides the committee what does Hon Mkaratigwa do?

Edmond Mkaratigwa: I am a businessman, a family man, an academic, a philanthropist, and a politician. I am the founder of a flagship organic company called MKE Holdings. MKE Holdings has subsidiaries focussing on electromechanical engineering projects and manufacturing, safari, entertainment and redemption gaming, textile, and real estate business among others.

Thank you very much for taking the time to engage us. There are so many questions and so little time and space. We hope to carry on with the interview in the future.

Edmond Mkaratigwa: You are welcome and on my own behalf and that of the Committee I preside over, I appreciate this opportunity. I am always available for the magazine and I cherish our cordial relationship. I will also knock at your door more frequently with our committee business updates since you have the capacity to reach out more specifically to the greater part of our audience. Thank you.


This article first appeared in the Mining Zimbabwe June 2020 Issue

Gold price hike: A closer look

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Zimbabwe’s mining industry is regarded as one of the major economic centrepieces with the sector exponentially contributing to the Gross Domestic Product through foreign currency earnings and employment creation.

To demonstrate commitment towards improving the mining sector’s contribution to the economy, the Government under the new political order which came into being in November 2018, has made inroads in trying to stimulate production in the sector and unlocking investment through policy reforms.

Such efforts include the repealing of the Indigenisation and Economic Empowerment Act, which was widely viewed as draconian and scared away investors.

Last week, the Reserve Bank of Zimbabwe through the country’s authorised sole gold-buyer, Fidelity Printers and Refiners (FPR) reviewed the gold trading framework.

Under the framework, large miners now receive 70 percent of the gold sale proceeds in US$ and 30 percent in ZWL$ at the prevailing interbank exchange rate.

In addition, small-scale and artisanal miners now receive a flat rate of US$45 per gram against the prevailing international price of US$54,8.

By and large, the pronouncement by the Central Bank, adds impulsion in boosting the production of the yellow metal in the country.

Prior to the review of the gold trading framework, FPR was paying the producers 55 percent in US$ and 45 percent in ZWL$ at the prevailing interbank rate.

The miners prefer payment in hard currency to the Zimbabwe dollar as the local dollar is unstable, production equipment, and products are priced in USD.

Moreso, large mining houses have in the past appealed to RBZ to consider raising the retention thresholds to improve their foreign currency base and be able to meet their procurement needs for imported consumables.

A market analyst, Mr. George Nhepera said:

“In my view, both policy reviews for large and small miners reflect our gradual phasing out of subsidies in the gold sector.

“This is a good step in the right direction as already advised by IMF (International Monetary Fund) in their latest report on Zimbabwe.

“The subsidies were already contributing  to the creation of money supply hence fueling inflation.” He said now that the small-scale miners are being paid 100% their receipts in foreign currency, this was again a good thing as it reduces pressure on the exchange rate.

“As a  country, we have to use all possible policy options to increase our exports, and this among other options is intended to achieve a positive outcome.

“In my view, the IMF recent report is a very frank and candid report on our current economic and financial status as a country.


This article first appeared in the Mining Zimbabwe June 2020 Issue

Zambezi Gas exceeds 200 000 tonnes of Coal per month

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MATABELELAND North-based coal miner, Zambezi Gas, has ramped up production to above 200,000 tonnes per month from less than 100,000 tonnes underpinned by continued investment in mining equipment.

The colliery’s chief executive officer Mr. Thomas Nherera said due to improved output, they are now exporting in the region to countries such as the Democratic Republic of Congo (DRC), Zambia, and Botswana.

“We are now producing upwards of 200,000 tonnes of coal per month from under 100,000 tonnes.

“We are attributing the improvement in production to investment in more machinery which has seen us increase our efficiency in the past few months,” he said.

Recently, Zambezi Gas announced a US$15 million mining machinery investment.

Zambezi Gas began coal mining activities in the Hwange district in 2014 with an output of 20,000 tonnes per month.

Three years ago, the colliery secured a 25-year mining license to undertake mining operations at its Entuba concession, which cover 19,200 hectares with more than 200 million tonnes of coal reserves.

Mr. Nherera said Zambezi Gas would continue increasing production levels as long as there is a demand for their coal.

“We are increasing our production from time to time and our target depends on the market.

“When we have a wider market like at the moment, there is a market to DRC, Zambia and at times to Botswana, we will endeavour to increase our production to meet coal demand,” he said.

Mr. Nherera would not be drawn into revealing the volumes of their coal exports as he was not in the office and thus could not provide such details off hand but said Zambezi Gas is supplying regional customers in different sectors such as agriculture and industry.

Locally, the mining firm also supplies coal to the Zimbabwe Power Company, tobacco sector, domestic and industrial customers as well as public institutions such as hospitals.

Currently, Zambezi Gas is undertaking opencast mining operations and would be embarking on underground operations at the “appropriate time”.

“When we are still getting the coal on the surface, there is no need to rush underground.

“Underground mining comes at a point when you are no longer getting sufficient coal on the open cast, so our opencast pit still has a lot of coal that we are mining and we’ll be going underground at the appropriate time,” said Mr. Nherera.

In 2007, the government issued Zambezi Gas a special grant for the coal concession.


This article first appeared in the Mining Zimbabwe June 2020 Issue

Tighten administration of Exclusive Prospecting Orders

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The Zimbabwe Prospectors Association says the government should expedite the tightening of rules and regulations
governing the administration of Exclusive Prospecting Orders (EPOs) to foster the establishment of commercially viable mines.

Of late, concerns have been raised over the continued grip of under-utilised mining titles by speculators. The Zimbabwe Prospectors Association (ZPA) secretary-general Mr. Timothy Chizuzu said prospecting should not be segregative and held for speculative tendencies.

“As such where an applicant or holder of prospecting rights or title cannot prove his capacity to carry out prospecting work especially in the case of EPOs, the rights should be forfeited for the benefit of potential players who can explore the mineral potential.

“Thus we are exhorting the government to expedite the tightening of rules and regulations controlling prospecting.

“Currently, there is the issue of lack of harmony between the Mines and Minerals Act and the Ministry of Lands and this has created confusion on whether the ground is open for prospecting and pegging or not,” he said.

Mr. Chizuzu said there were also instances where some landowners fail or are unwilling to cede idle ground when approached by prospective miners.

They (landowners) instead immediately want to do the prospecting for their own benefit and we think the ngovernment should quickly move in to tighten the rules and regulations controlling the administration of prospecting and EPOs to protect prospective miners, he said.

ZPA was established in 2018 to advance the interests and rights of prospectors in the issuance and administration of mining rights.

Presently, the association which has over 100 members dotted across the country believes the above objective will be achieved through advocating for the rights and interests of the members.

ZPA also seeks to technically capacitate prospectors through consultancy and training in sync with the advent of the latest technology.

Said Mr. Chizuzu: “So far, we have over 20 prospectors who have graduated with diplomas in Geo-Information System (GIS). “And prospecting as an initial stage of exploration needs to be carried out by highly qualified personnel who can marry the technical aspect of mineral prospecting (identification, classification, or staking) with the legal arm on acquisition rights.”

Zimbabwe is endowed with vast mineral deposits but these remain untapped due to lack of exploration.


This article first appeared in the June 2020 issue of Mining Zimbabwe

Mining communities need Covid-19 support

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MINING communities are also exposed to the COVID 19 pandemic and need social safety nets in the form of financial support and personal protective clothing (PPE), the Zimbabwe Environmental Law Association (ZELA) has said.

STAFF WRITER

In an interview with Mining Zimbabwe, Mutuso Dhliwayo the ZELA executive director said a recent study by his organisation (ZELA) has revealed that the livelihoods of people that live in mineral resource-rich communities are threatened as there is inadequate assistance given to them from the resources mobilized to combat COVID 19 despite them living in resource-rich areas.

These include financial bailout packages from the government as well as mining companies extracting mineral resources from their communities.

For instance, apart from environmental degradation that mining activities can cause to their communities, people living in such areas can be susceptible to dust and other finely powdered materials which can lead to respiratory illnesses to miners and mining communities, hence the need for adequate support and preventative measures during the COVID 19 period.

“We have been to Marange communities which is a place blessed with diamond resources, but people are struggling there in terms of adapting to the COVID 19 pandemic because they are not getting any financial and other support,” Dhliwayo said.

“At Arda Transau where people displaced from diamond mining areas were relocated they did not have running water and electricity despite that water is pivotal to combat COVID 19.  We are talking of a pandemic where effective hand washing using clean water is emphasized, but it was not available at Arda Transau,” he said.

ZELA had to get a Court Order granted last week to compel the Zimbabwe Electricity Supply Authority and the Zimbabwe National Water Authority (ZINWA) to reconnect electricity and water to ensure supplies for the community.

“We need the country to be able to use mining revenues to mitigate the pandemic and those communities in mining areas should benefit.  The mineral resources should do a lot in terms of assisting communities during disasters such as COVID 19 as part of corporate social responsibility,” he said.

Dhliwayo said a good approach would be for the government to come up with policies such as Community Share Ownership Trusts (CSOTs).  The aspect of CSOTs had all along been included in the Indigenisation law were businesses extracting minerals were supposed to avail 10 percent of shares to CSOTs.

“There is need for policies that ensure that CSOTs get percentage shares.  Unfortunately, that has been repealed from the Indigenisation law through amendments to the Finance Act.  If mining communities can get money from CSOTs, they will be able to manage those resources to use them in times of disasters such as COVID 19.  These pandemics or natural disasters might be on-going or recur, but if we manage our natural resources like minerals well we will be able to provide social safety nets for communities,” Dhliwayo said.

Last year, former Minister of Industry, Mangaliso Ndlovu told Parliament that after the amendments on the Finance Act, it will no longer be mandatory for investors in the mineral or other natural resource extractive industries to remit 10 percent of shares to CSOTs.

Ndlovu said even with the Indigenisation regulations in place, there was no adherence to supporting CSOTs as companies only paid US$39 million to CSOTs against assurances they had made to pay US$129 million.

Dhliwayo said there is a need for transparency and openness on mineral revenues so that the country’s resources can cushion mining communities and the country at large during disasters such as COVID 19.

Centre for Alternative Development coordinator Melania Chiponda said good corporate social responsibility by mining companies towards communities can actually generate social acceptance of their mining activities.

Chiponda said women living in mining communities were the worst affected by the COVID 19 lockdown and needed urgent financial and social support.

“Women in the mining sector are disproportionately affected by the COVID 19 lockdown and the pandemic in general.  Firstly; because a lot of the women’s livelihoods depend on the informal mining activities.   Therefore, the ‘shutting down’ of their places of work has resulted in increases in poverty levels.  They need financial support during the lockdown period,” Chiponda said.

She said since most mining activities take place in rural areas, other problems that women in mining communities suffered include transport to get to healthcare centres where they can get medication and healthcare facilities.

While more assistance is needed for mining communities, a recent report by ZELA on COVID 19 Mining Sector and Communities Situational Report stated that some mining companies such as UNKI Mine in Shurugwi, Mimosa Mines, Zimplats, Blanket Mine, South Mining and the Chamber of Mines have given financial and other support in kind to government and their communities as assistance to prevent against COVID 19.

In their recommendations, ZELA said ‘mining companies must extend their corporate social responsibility activities and assistance on COVID 19 to mining communities in which they are operating from and where some of their workers might be living.  Help must be given to the local hospitals and clinics in the form of equipment, PPEs, and other resources so that the local clinics have the capacity to prevent and contain the virus’.


This article first appearedin the June 2020 Issue of Mining Zimbabwe

Chinese firm stalling US$1,4 billion Lithium project

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Zimbabwe Lithium Company is suing a Chinese firm, Beijing Pinchang for stalling progress on the development of US$1,4 billion lithium project in Kamativi, Matabeleland North province.

In 2018, Zimbabwe Lithium Company was involved in a legal wrangle with Beijing Pinchang over mining rights at the tailings dump in Kamativi.

The Chinese company had shown interest in taking over operations at Kamativi after the suspension of operations at Kamativi Tin Mine by the Zimbabwe Mining Development Corporation (ZMDC) in 1994 due to subdued international prices of tin.

But the Zimbabwe Lithium Company argued that through an agreement their subsidiary, Jimbata has with ZMDC,  that gives the lithium producer mining rights to the tailings dump.

Jimbata had projected to resume operations at Kamativi last year but the deadline had been missed on account of the legal battle.

Jimbata managing director Mr. John McTaggart said:

“We are suing the Chinese firm in the Supreme Court. We are taking them in the Supreme Court for having prejudiced ourselves and Zimbabwe from going forward with this project.”

Early this year, the High Court ruled in favour of Zimbabwe Lithium Company over mining rights at the tailings dump, further consolidating the firm’s initiatives to re-open the mine.

Meanwhile, Mr. McTaggart said they had started the process of importing a pilot concentrate plant from South Africa before the main plant worth US$10 million is installed at the mining site.

“We haven’t started production as yet mainly because of Covid-19. We are unable to import the pilot plant and soon as we start having things moving across the border, we’re ready to go,” he said.

It is envisaged that 250 people will be employed under the first phase of the project while thousands of other jobs would be created across the downstream industry.

In March 2018, Jimbata embarked on an evaluation exercise drilling holes to depths of 1 500 metres and sampling to ascertain the lithium resource in the tailings dumps at the defunct mine.

The results were used for the production of the NI 43-101 Compliant Resource Estimate for the Kamativi Tailings Project.

Jimbata is also looking at beneficiating spodumene to lithium carbonate.

Of late, lithium production is fast surfacing as a potential game-changer for the local mining sector with investors showing determination towards the exploitation of the resource.


This article first appeared in the Mining Zimbabwe June 2020 Issue

Zimbabwe deadliest mine disaster turns 48

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Today marks 48 years after the Kamandama disaster at Hwange Colliery mine that claimed 427 lives when a series of explosions occurred underground.

The disaster remains the deadliest mine accident to date in the country’s history.

Kamandama

The disaster took place at the Wankie No.2 Colliery in Hwange, in the province of Matabeleland North, when several gas explosions ripped through the mine. It was initially believed that 468 miners were trapped, but the number was lowered after the owners at the time found a number of people had not shown up for work.

Eight men were pulled alive from the mine after the initial explosions. Two new explosions on 7 June of 1972 poured clouds of poisonous gas into the 4.8 kilometres of tunnels, making further rescue attempts impossible.

On 9 June 1972, the general manager of the Wankie (Hwange) colliery, Gordon Livingstone-Blevins, decided to leave the 424 bodies where they were. Three bodies had been recovered after the initial explosions. A mass memorial service took place on 11 June at a nearby football stadium, where a crowd of about 5,000 people paid tribute. “This has cast a gloom over the whole country,” Rhodesian Prime Minister 1972 Ian Smith said during the service.

The Kamandama accident claimed 391 men from different Southern African countries and 36 Europeans.

1. 1 from Botswana
2. 13 from Namibia
3. 30 from Tanzania
4. 37 from Malawi
5. 52 from Mozambique
6. 91 from Zambia
7. 167 from Zimbabwe.

Hwange Colliery Company Limited indicated in a statement this year’s event, scheduled to be staged yesterday and today, has been shelved due to the outbreak of the coronavirus pandemic.

“As the public is well aware that the COVID-19 pandemic has ravaged not only Zimbabwe but the world at large, thereby disrupting the normal functioning of the community at large.

“This deadly virus has necessitated the need for social distancing; this requires us as organisations to adhere to Government regulations limiting gatherings in an effort to stop the spread of the disease.

“In light of this, (the) Hwange Colliery Company Limited will not be conducting the Kamandama Golf tournament together with the memorial which is normally held annually on the 5th and 6th of June respectively,” HCCL said in the statement yesterday.

The company, however, said they will continue with their philanthropic efforts to ensure the surviving spouses (widows) of the miners, who were killed in the 1972 disaster, are well taken care of “especially in these trying times”.

Fidelity agent Bank disowns illegal forex dealers

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Fidelity Printers and Refiners agent bank, ZB Bank has castigated as impostors some illicit foreign currency dealers who are claiming to be buying foreign currency on behalf of the bank.

In a press statement released Thursday afternoon, the ZB chief executive Ron Mutandagayi said the bank was concerned at the claim by the purported agents, saying it only conducted foreign exchange transactions at official exchange rates.

“ZB Financial Holdings Limited has noted with concern some social media posts alleging that there are “agents” who are conducting illicit foreign currency transactions on the parallel market, representing ZB Bank or on behalf of ZB Bank.

“We would like to unequivocally inform our valued customers and the public in general that there allegations are false and malicious.

“The ZB Bank conducts all its foreign currency transactions at the official exchange rates, which we publish at our branches and on our website,” ZB Bank said in a statement.

Mutandangayi further said any irregular transactions should be reported to the authorities so that justice could take its course.

The Press statement by ZB Bank comes after President Emmerson Mnangagwa told members of the Political Actors Dialogue that there were some banks which were withholding cash from withdrawers to release it on the black market.

“Banks have been stashing foreign currency which is then used on the market to spike exchange rates and prices,” Mnangagwa said.

The government appears to have failed to control the black market exchange rate, with some activists accusing its officials of fronting the black market rate in connivance with bank officials.

Zim Morning Post

ZCDC repossessing vehicles from former bosses

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The Zimbabwe Consolidated Diamond Company (ZCDC) is repossessing luxury vehicles worth US$2m from its former executives as the diamond miner moves to reclaim its assets.

The vehicles were controversially bought in 2018 despite a directive by President Emmerson Mnangagwa for government and all parastatals to cut on spending.

The top executives including former chief executive Moris Mpofu were dismissed over corruption allegations.

Mpofu was subsequently cleared of the charges.

“The actual dismissing letter involved surrendering company property and those vehicles were part of the company property.

The dismissal letters were clear and some of those vehicles have since been recovered,” said a source close to developments.

Contacted for comment, ZCDC spokesperson Sugar Chagonda promised to come back with a response but could not respond by the time of going to print.

ZCDC’s multi-million-dollar vehicle purchase was made using part of the US$80m investment by the government into the diamond producer. ZCDC at the time said it desperately needed to build capacity and to enable the exploration and mining of conglomerates.

The US$80m came after the diamond producer benefited from a US$35m PTA Bank facility. Similar questionable moves around vehicle procurement and expenses have been made at the Ministry of Mines and Mining Development where at least US$1.2m is being blown on vehicle hiring annually for directors.

The latest move comes as ZCDC is currently undergoing a forensic audit aimed at ensuring transparency at the state diamond miner. The diamond producer has been running under the stewardship of Roberto De Pretto in an acting capacity while the board was in the process of searching for a new CEO.

This came after the company fired seven executives last year including then CEO Moris Mpofu as it moved to rebuild public and market confidence following allegations of rampant corruption and abuse of office by the executive team.

Last month, the ZCDC board resigned en masse in alleged protest over the government’s decision to award part of Chiadzwa diamond fields to Chinese firm, Anjin, citing lack of consultation. The former board consisted of Killian Ukama (chairman), Ellah Muchemwa, Elizabeth Nerwande Chibanda, Zenzo Nsimbi, Esau Chiadzwa, Alexander Mukwekwezeke, and Niya Mtombeni.

The debt-ridden ZCDC has been haunted by scandals and under-performance ever since its formation leading to perennial losses of more than US$50m in the period between April 2015 and May 2016 alone. According to the AMG Global audit report on the diamond firm, the company has been operating at a loss since its inception in 2015.

At its peak in 2012, Zimbabwe produced 12m carats, but in 2018 production was low to 2.8m carats.

Zimbabwe is believed to have the potential to account for 25% of the global diamond production and it is targeting to expand its diamond industry to 10m carats by 2023.

ZCDC was formed in March 2015 after a government decree to consolidate all diamond mining companies in Zimbabwe to form a wholly-owned State firm.

Business Times