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Zimbabwe eyes international diamond tenders

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The Zimbabwe Consolidated Diamond Company (ZCDC) intends to hold 11 international sales in 2020, the news agency cited the miner’s acting CEO, Rob De Pretto, as saying. Its tenders are currently in Harare, the country’s capital, but the location does not appeal to clients, the report continued.

“We are exploring opportunities and new markets to sell our products,” De Pretto said in an email to Rapaport News Monday. “The key international markets [where] most producers are selling their goods are Antwerp, Dubai, India and Singapore,” he added, without providing details on where or when the sales would take place.

Zimbabwe’s diamond industry is centered on the Marange fields in Chiadzwa. ZCDC expects to produce 3.1 million carats this year, 24% lower than the 4.1 million carats it previously predicted, according to Bloomberg. However, the miner is predicting an increase to 6.1 million carats in 2020, the report said_Diamond.net

BNC Issue Caution To Shareholders Ahead Of New Ownership

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Listed nickel producer, Bindura Nickel Company (BNC) has warned its shareholders over trading of company securities on the Zimbabwe Stock Exchange ahead of an imminent takeover of controlling stake by a new investor who has just concluded the deal.

London based, Asa Resources sold its 74.73 percent stake in BNC to a local rm with interests in the mining and production of ferrous metals, non-ferrous metals, and precious metals.

“Shareholders are referred to the Cautionary Statement published on 29 October 2019 advising that the ultimate holding company of BNC – Asa (currently under Administration) and a third party had entered into a Sale and Purchase Agreement (“SPA”) in relation to the 74.73% shareholding held in BNC by Asa and that the transaction involving the sale of these shares to the above-mentioned third party had been successfully concluded,” BNC 0board chair, Muchadeyi Masunda said in a statement Thursday morning.

The company said the transaction by the new controlling shareholder may have a material effect on the price of the Company’s securities.

“Accordingly, Shareholders are advised to continue exercising caution when dealing in the Company’s securities until a full announcement is made in due course,” further read the statement.

Earlier this week, BNC managing director, Batirai Manhando while engaging with stakeholders at BNC’S Trojan Mine was not privy to share much detail on the deal and the new shareholders, but identified them by the name, Sortic.

BNC is currently upgrading its Trojan mine with work on the smelter plant now 83 percent complete.

The company needs about US$ 7 -10 million to complete the plant.

Other projects include the finalization of Hunter’s Road Mine in Gweru, which has been in the predevelopment stage for more than a decade_263 Chat

Joint Operations Command restores sanity in Manicaland

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Last week, the Joint Operations Command (JOC) raided artisanal and small scale miners who were operating in Manicaland in the gold-rich Odzi district in an endeavor to restore sanity after the death of four panners in bloody clashes at Odzi 1 and 2 mines.

In recent weeks, JOC has also raided illegal miners along Mutare River where alluvial gold mining is rampant.

Manicaland provincial mines director Omen Dube yesterday confirmed JOC’s intervention.

“We raided illegal miners in Odzi, especially after a recent incident where a miner was killed.
Police and the army invaded illegal miners in Odzi. I will be in office on Monday (today) so that we can conduct a meeting on how effective the operation was,” he said

“We want this operation to be continuous because with the economic hardships, we are very aware that they (illegal miners) are going to come back again.

“We have done similar operations along Mutare River, where alluvial mining is rampant. You know that it’s easy to trap gold along Mutare River, so the miners need easy money.”

Acting provincial police spokesperson Assistant Inspector Luxon Chananda confirmed the operation, but could not provide details.

Chananda said the programme was implemented by the district operations office.

“I can confirm that we carried out a joint operation with the Ministry of Mines, but I cannot provide details because this was a district operation, so I will also need to be apprised on the operation,” he said. “However, it is the mandate of the police to respond to any distress calls and ensure that there is peace in the country.”

 

Newsday

Afghanistan cancels contract to US gold, copper miner

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Afghanistan’s news agency Khaama Press informed this weekend that President Mohammad Ashraf Ghani cancelled the contracts held by the Turkish Afghan Mining Company TAMC and the Afghan Gold and Mineral Company AGMC, which allowed them to exploit the Badakhshan gold mine and the Balkhab copper mine in the northern Sar-e-Pul province.

Both TAMC and AGMC are JVs formed by US-based Central Asian Resources Limited, better known as CENTAR.

According to the news report, the country’s economic council, which is chaired by the president, made the decision arguing the companies have not fulfilled their contractual commitments.

In the missive, the companies say they have completed a baseline environmental and social survey for the Badakhshan gold project area; developed an exploration plan for Badakhshan with a project schedule, detailed description of the proposed activities, a justification for why those activities are being proposed and a detailed budget that corresponds to the schedule and our proposed activities; designed an environmental impact mitigation plan related to the activities proposed in the exploration plan; and outlined an environmental remediation plan related to the activities proposed in the exploration plan and their impacts. However, in a letter sent to the Large-Scale Mining Committee of Afghanistan to which Khaama Press got access, TAMC and AGMC said that they have fulfilled four key obligations in their contracts.

The one thing the miners haven’t done is the provision of a performance bond. In their correspondence, they say this is due to the unknown political situation in Afghanistan, where people are still waiting for the delayed results of the September 28th presidential election.

Within this context, TAMC and AGMC asked for a six-month extension to provide the bond.

“Our investors are committed to making this a reality. In order for that to happen, they, like any experienced mining investor will need an environment that is supportive of mining project development. Granting an extension of the performance bond obligation until May of 2020 at this time, will help maintain their belief that Afghanistan still holds the same promise it did when they invested in 2011 and will be a concrete example of the level of support of the Government of Afghanistan,” CENTAR’s CEO, Bradley Barnett, wrote in the letter, according to Khaama.

The mining companies involved in the projects since the signing of the final contract in October 2018 have said that they had planned to start exploring before the end of 2019.

For decades, the 1,000-square-kilometre Badakhshan gold project has been the source of the yellow metal for hundreds of artisanal miners. In the 1970s, Russian geologists documented a series of gold-bearing occurrences on the site and generated a small indicated resource.

The Balkhab copper project, on the other hand, is an early-stage exploration project covering a 500-square-kilometre area. It is marked by occurrences of sulfide and oxide copper ores, the latter of which has a history of mining and processing at the site that stretches back an estimated 3,000 years.

Mining [dot] com

Gold Prices likely to fall further

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The most sort after special mineral, Gold has disappointed investors lately and is likely to continue doing so.

According to Forbes here’s what’s happening and why you should be happy about it.

Gold Prices Melting

The SPDR Gold Shares exchange-traded fund (Ticker: GLD), which closely tracks the price of bullion, has fallen 4.1% in the three months through Friday, compared to a gain of 7.3% for the SPDR S&P 500 (SPY) ETF, which tracks the S&P 500 stock index, according to data from Yahoo. The latter figure excludes dividends.

The bad news for anyone holding substantial quantities of bullion is that for the foreseeable future things aren’t likely to get better. In other words, gold prices will either languish where they are now, at around $1,465 a troy ounce or drop further.

Part of the reason that will likely happen is that investors are still overly bullish on gold.

“The specs (speculators)keep increasing longs, not decreasing them,” writes Rick Bensignor, author of the Bensignor Investment Strategies financial newsletter.

What he means here is that traders, or ‘specs’ in his vernacular, are placing more and more bets on the price of gold going up. He knows this because the Commodity Futures Trading Commission, which regulates futures markets, produces a weekly report detailing which way fund managers are betting.

Expansion work at Hwange thermal now at 25%

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The Expansion work at Hwange thermal power station now stands at 25 per cent, 14 months into the project which will add 600 megawatts into the national grid by 2022.

The $1,5 billion project, being carried out by Chinese firm Sino Hydro, entails the addition of two power generating units, unit 7 and 8 to the existing 6 units that were commissioned between 1983 and 1987.

Along with many others at various stages of implementation, the project is part of Zimbabwe’s efforts to find sustainable solutions to power shortages that are retarding industrial growth and bedevilling the economy at large.

In an update, the Zimbabwe Power Company (ZPC) said most excavation work had been completed including for the cooling tower, the boiler house and the chimney.

“We have completed all the excavations up to foundation level for  Hwange 7 and 8,” the ZPC said.

“As of this month of November we have done fourteen months into our schedule. Our current progress is around 25 percent and we are on target in terms of what we had planned to achieve up to month 14, we are  currently on schedule.”

The whole project will take up to 42 months to complete, but unit 7 is  expected to start firing by April 2021 while unit 8 would follow later on. Hwange Power Station is Zimbabwe’s largest coal-fired power generator with production capacity of 920MW. But because of old age, the plant’s current dependable capacity is around 600 megawatts. — New Ziana.

Increase forex retention – BNC

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Bindura based Nickel producer Bindura Nickel Corporation (BNC) says the Reserve Bank of Zimbabwe must allow mining companies to retain at least 80% of their export earnings in foreign currency as they spend a lot of the money paying electricity bills.

The government early this year gave mining companies and hotels permission to pay their electricity in foreign currency to allow the Zimbabwe Electricity Supply Authority (Zesa) to pay for power imports from South Africa and Mozambique.

On Friday, the government extended the dispensation to all exporters and partial exporters following the gazetting of new regulations through a statutory instrument.

Statutory Instrument 249 of 2019 known as Exchange Control (Payments for Electricity and Related Services in Foreign Currency by Exporters and Partial Exporters) sets the parameters for the new arrangement.

BNC MD Batsirai Manhando, however, said the current 55% foreign currency retention thresholds meant that companies were left without adequate foreign currency to pay for other essential imports.

“As an industry, we agreed to pay for power in foreign currency and in advance for us to guarantee uninterrupted power supply,” Manhando told Standard business.

“However, this has constrained the foreign currency, which is available to us for other imports.

“The 55% retention threshold is clearly no longer adequate and we are lobbying government so that it increases the retention threshold.

“We are looking at a retention of 80% for us to remain viable.”

RBZ governor John Mangudya recently indicated that the central bank was willing to review the foreign currency retention levels for the mining industry.

Companies in the tourism sector are already being allowed to retain 80% of their earnings in foreign currency.

Manhando revealed that the arrangement between Zesa and Eskom for the prepayment of electricity supplies to miners was working smoothly so far.

“There is an account, which we pay into. Zesa has got sight of that and Eskom has got sight of it so that the money goes straight to Eskom without being transitory,” he added.

“When Eskom sees the payment, they can then supply the power. “They have to see the money first before they supply the power.”

Manhando said BNC had not experienced any power cuts since the arrangement was put into place.

“Interruptions are there when there are problems on the grid,” he said.

“By and large when we started this, there has been a steady supply of power.”

power cuts have crippled businesses, which now have to spend more on alternative sources of fuel such as generators amid an acute shortage of fuel.

On Friday, Zimbabwe was only producing 514 MW of electricity against the peak demand of 1 400 MW.

The power utility has been battling to pay legacy debts owed to South Africa’s Eskom and Hidroelectrica De Cahora Bassa (HCB) of Mozambique.

Since his appointment in September, Energy minister Fortune Chasi has been negotiating with the two power producers to increase their electricity supplies to Zimbabwe, but the Zesa debts have proved to be a stumbling block.

The Standard

Threats to Gemstone Mining in Zimbabwe

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The Precious Stones Trade Act defines all rough gemstones as semi-precious except for rough emeralds and rough diamonds. There is potential in the production of coloured gemstones, its beneficiation and market demand.

By Maison Phiri, BSc Geology*MBA*GG, GD, CSTG

Amongst the coloured gemstones found in Zimbabwe, there is amethyst, citrine, aquamarine, tourmalines, chrysoberyl, euclase, apatite, ruby corundum, agates, fluorite, diopside, apatite, alexandrite, quartz, emerald and red garnets.

Coloured gemstones are dominantly mined by small scale artisanal miners who sell their produce as rough uncut stones, hence there is minimal cutting and polishing of coloured gemstones, let alone jewellery making. Local demand for coloured gemstone fine jewellery is extremely low because of the general disposable income levels, beliefs, awareness and cheap substitutes.

Gemstone mining is therefore threatened by the following factors;

Land tenure

Gemstone mining in Zimbabwe is almost 100% ASM (citizen mining), these are usually financed through their home earnings to run operations.

To this end there is no advancement in legal acquisition of the land they work on and most of them do not have proper mining claims. This adversely impacts on the seriousness of the operation, marketing of their produce and ultimately the environment rehabilitation issues.

Government Policy

It is noble to implement protective policies, but trade is trade and our policies in the gemstone value chain have to adapt to the demands in trade.

The suspicion is that, the government policies are too rigid on Gemstone mining and the subsequent value chain activities to the extent that they are the responsible factor in smuggling activities of the National gemstones.

It appears that we have pushed our own indigenous miners up against the wall with our current policies and so they fall prey to dealers and smugglers on a short-changed price.

Tanzania and Kenya have adopted the permit system to empower their own miners hence, policymakers should look into the issue of permits for our ASMs so that they are not deterred from joining the formal channels of the gemstone business.

There is a lot of bureaucracy in the administration of documents and change of policy. It is the duty of all Zimbabweans to do their part. The government should create a one-stop-shop for gemstone business paperwork and it should involve departments such as the MMMD, ZIMRA, RBZ, MMCZ and EMA.

Financing

The banking system has not been supportive to gemstone mining since most of these ASMs have no collateral and
they have no knowledge of gemstones or their potential value in our banking systems.

To this date, our banks are not taking minerals as bankable collateral or investment, but we have diamond, Gold and platinum. In India, one can walk in and exchange money for gold through their banks and they can keep their gold in that bank. Therefore, our banks require redress in the financing approach of gemstone mining.

Another avenue is to have our government vouching for all ASMs in the event that they may default in servicing loans. This is being done by the AfDB in most African Countries.

Social and environment issues

All activities should have minimal impact on society and the environment, this should be done to protect the
heritage of our future generation. However, and current gemstone mining has left a trail of pits, littering, and
erosion, siltation, and deforestation and biodiversity disturbances. The world has gone solid on green issues and
Humanitarian issues, Zimbabwe does not operate in isolation and so we have to be part of these world efforts.

This has been a serious issue in diamond mining and hence the advent of the KPCS, unfortunately, or fortunately, there is no “KPCS” as yet for coloured gemstones. Nevertheless, consumers are now requesting for the complete details of their jewellery including questions like where was the stone mined? Was it mined responsibly?

These are tell-tale signs that something is coming hence we should try and regularise on clean coloured gemstones.

Responsible mining ensures better marketing strategies of our gemstones, hence there is an urgent need of the
establishment of a responsible gemstones board that comprises of the government, industrial representatives along with the value chain and Civil Society organisations.

The development of markets

It’s been 39 Years since Zimbabwe has attained its independence and the nation has no gemstone fair, no gemstone market place, or a recognised entity that facilitates a meeting point to transact in gemstones. The private business community and the MMCZ should take note of the fact that there is need to hold a gemstone fair, agriculture has ZAS and therefore coloured Gemstones should have their own. This brings interest from investors abroad, creating a friendly environment in the formalisation of small scale gemstone mining.

Going forward, the nation should have time-framed goals on the following:

1.Quick and easy issuance of claims and permits. (MMMD)
2.Relaxation of restrictive regulations and promotion of open trade. (LEGISLATORS/MMMD/MMCZ/CID)
3.Marketing fairs, Gemstone forums, marketing platforms. (MMCZ/ Private organisations)
4.Responsible sourcing and transparency of the gemstone value chain (CSO/ All)
5. Workshops and gemology/ other technical education. (CSO/MMCZ/All)
6.Environmental protection awareness. (EMA)
7.Financing. (Banks/Zimbabwe Govt)

Polite Kambamura Deputy Minister of Mines Interview

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Inside Mining Zimbabwe with Rudairo Dickson Mapuranga (RD) met the Deputy Minister of Mines and Mining Development, Polite Kambamura (PK) (aged 42). Polite Kambamura is also a Member of Parliament for the Sanyati constituency. They discussed mining matters and answered pertinent questions which have frequently been asked by miners.


RD: Good day Hon. Polite Kambamura, welcome to Inside Mining Zimbabwe with Rudairo. Miners would like to know about your brief mining background before you became Deputy Minister. Can you please share in brief?

PK: Thank you Mapuranga. I’m an engineer by profession, graduated from the University of Zimbabwe in 2002 with a BSc (Hons) in Mining Engineering. I worked in several mines in Zimbabwe which include Trojan Nickel Mine, Shamva Mine (LONRHO) and Ashanti Goldfields. I went to South Africa where I increased my knowledge in mining, working in several mines starting from junior positions to management. Then I came back to Zimbabwe where I joined politics. In 2018 I was duly elected Sanyati constituency legislator, then His Excellency, the President of Zimbabwe, Cde Emmerson Mnangagwa, appointed me to the position of Deputy Minister where I’m serving right now.


RD: Hon. Kambamura, farmers have been complaining that their land is being destroyed by illegal miners, and sometimes they lose land to unscrupulous people who come with fake mining titles. By the time they discover the claims are fake, the damage would have already been done. Have you ever come across such reports, and what advice can you give to farmers?

PK: It is very unfortunate that such things are happening in the mining sector. The reports haven’t reached my desk yet, but my advice is that farmers should report such cases to our provincial offices so that they can verify if the mining titles brought by the miners are real. This should also be reported to the police because we might have a cartel amongst us that is working on creating these fake concessions. Reporting to the police might lead us to something that we are unaware of.

So I urge farmers to work closely with law enforcement agents so that the whole issue of this scam may be brought to light as soon as possible.

Regarding illegal miners who come secretly to mine on the farmers’ land, I urge farmers to tighten their security and report such incidents to the police. Farmers also need to come up with associations to deal with these illegal mining activities.


RD: Gold delivery to the country’s sole gold buyer and exporter, Fidelity Printers and Refineries, took a knock in the first half of the year compared to last year, receiving only 15 tonnes of gold. Last year Fidelity received 33.2 tonnes of gold and 17 tonnes in the first quarter. Are you still hopeful that the target of 40 tonnes this year can be reached?

PK: We are very hopeful that the gold production target of 40 tonnes will still be reached. We haven’t lost hope. However, the challenge is we are only recording gold delivery to Fidelity Printers and Refineries, yet on the ground, in the small-scale mining sector, the real prospecting hasn’t stopped. As the Ministry, we are working on policies that will attract artisanal and small-scale miners to sell their production to Fidelity, so that we curb leakages which are reportedly very rampant.


RD: Hon Deputy Minister, Fidelity Printers and Refineries appears to be selling their gold at a better price than most illegal buyers, according to my research. Nevertheless, small-scale and artisanal miners still sell their gold to illegal buyers, avoiding Fidelity. What could be the problem?

PK: There is not much that needs to be done in order to attract small-scale and artisanal miners to sell their gold to Fidelity Printers and Refineries. The sole gold buyer should know that sometimes it is about creating a relationship between the buyer and the seller. That is why black market gold buyers are winning. Also, in terms of strategy, Fidelity needs to give licences to many gold agents who will actually be on the ground where mining is taking place. Some miners do not care whether they are paid in US dollars or not; what they want is the true value of their production, paid immediately without delay.

For example, in Makaha, there is small-scale mining activity taking place, but there is no Fidelity agent near the area or at nearby Mutoko Centre. The miners are therefore expected to board a bus to Marondera, the capital of Mashonaland East province. Can we expect a miner to go that far to sell only a gram of gold?

I also suggest that Fidelity should pay small-scale and artisanal miners in cash because the majority don’t have bank accounts and some want to use their money instantly as they are paid. It is therefore advisable to pay small-scale miners all their balances in cash. By doing so, Fidelity would curb gold leakages.

We have discovered that small-scale miners actually sign equipment agreement deals with buyers, and sometimes they are given money upfront for food and other consumables. That is why we are going to establish gold milling centres right where mining is taking place, so that we can create a mutual relationship with the miners, selling equipment at very affordable prices. This will encourage miners to do business with us, therefore we will be able to record a high gold delivery and may even surpass our gold target.


RD: Small-scale miners are advocating for the removal of EPOs so that mining production takes place. Do you, as the Minister, think it is wise for the government to stop gazetting EPOs?

PK: Exclusive Prospecting Orders are a large area of ground targeting selected minerals for exploration. The maximum is 65,000 hectares, and the tenure currently for these EPOs is three years. Firms doing high technical exploration are required by law to drop most of the EPO ground after three years.

It is not advisable for the government to drop EPOs because small-scale miners are saying so. These EPOs are very crucial for the country to discover new mineral deposits.

It is not a secret that miners who have claims acquired those claims with geological knowledge that there are areas rich in certain minerals.

As the government, we are also working towards reviewing these EPOs to accommodate small-scale miners, for example (not in all circumstances) allowing mining operations of 1 hectare to take place.

We will also ask EPO holders to release some land after exploring it, even after six months, so that mining can take place if there is any mining to do on the land. We will also raise our taxes for an EPO holder after one year if they fail to give us geological results for some of the land under their exploration zone.

We will also raise the taxes if the holder does not release the land under his watch. As the government, we are going to make sure that exploration does take place and at the same time production does not stop. Therefore, we have come up with these measures and others to keep our mining sector mobile.


RD: Zimbabwe is reportedly losing a lot of revenue through predatory buying of gemstones. What do you think needs to be done to curb predatory buying?

PK: Zimbabwe lost quite a sum in gemstone leakages where foreign buyers would come and buy gemstones that might cost over USD 2,000 for only USD 20. The buyers would ask villagers to mine gemstones of different types and pay them very little because the villagers lack sufficient knowledge about these gemstones. MMCZ is therefore working on a model that is going to help Zimbabwe secure gemstones by liberalising the mining of these stones and spreading knowledge about the stones.

Major points towards turning the Chrome sector to yesteryear’s fortunes

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Veteran miners in the Chrome sector are of the view that the sector has been constantly declining in production and
development. And therefore this has led to the sector being under looked and underrated which has made recent chrome miners unaware of the flourishing old times in the sector.

By Rudairo Dickson Mapuranga

There are two groups of chrome producers, those under Smelters (Tributors/Contractors) and independent
producers. It used to be independent producer’s obligation to select miners under a Tribute Agreement which was a tripartite arrangement among the tributor, smelter, and ministry of mines. This was the best arrangement which saw the chrome sector producing unquestionable volumes due to capital and operational support rendered by
the smelter. In this agreement, if any problems arise the ministry would step in.

Funding

Chrome is one of the minerals that is placed by the government as a strategic mineral therefore it is miners belief that the government should set aside capital to fund the sector. According to one veteran in chrome mining Martin Chitohwa, the common issue of funding and cash flows is rampant and effectively crippling the sector.

“I still wonder why the government positioned the mineral as strategic if not being funded. There is totally no access to capital. It’s long overdue otherwise what the meaning of making it a strategic mineral. Look at what is happening to the gold sector? Simply because it is funded, it is flourishing” said Chitohwa.

Liability

Experts are of the view that the government need to make smelters liable to fund there tributors/contractors and
make sure they utilise their chrome claims which they have been holding for many decades – fire up their smelters and meet their production quota. They believe that chrome miner’s claims should be heavily audited. According to one former worker.

“Zimasco surrendered 50% of their claims to the government but 40-45 of those are not viable to mine. And most of those were taken by none miners (companies & individuals) who do not even know the elements of the rock/mineral itself “she said.

ZMF should create chrome branch Zimbabwe Miners Federation (ZMF) is believed to have emphasized on gold shunning other sectors. Therefore it is miners’ belief that ZMF should have a subdivision or branch only responsible for the chrome sector (run a program or centre that looks into operational needs of the sector, lobby the government and investors for funding. This will help in reducing the heavy york ZMF have to lobby for the wishes of miners of different categories.

Infrastructure access

Experts are of the view that, lack of “infrastructure access” has become a big problem which is creating bottlenecks
in getting the mineral to market in many areas along the great dyke. If the government and smelters don’t push infrastructure development for now, they will have trouble accessing the mineral in the not so distant future. Therefore the government need to find a way to help the chrome sector revive flashing back to the yester age’s glories help miners build modern infrastructure and create a conducive environment for the miners to develop the sector into a super wonder.

Energy problem

Mining and smelting is energy (electricity) intensive and requires reliable, sustainable and efficient energy supplies. Use of generators has had interruptions in the supply of the product to market due to unavailability of fuel, generators breaking down and so on. Miners are of the view that Zimbabwe Electricity Transmission and Distribution Company (ZETDC) should create a partnership with miners.


This article first appeared in the Mining Zimbabwe magazine March 2019 issue