Mining ZimbabweLatest Mining News, Policy and Industry Updates

Reserve Bank of Zimbabwe (RBZ) governor, Dr. John Mangudya, yesterday said the bank found a sustainable way to manage funds required to make consistent US dollar cash payments to small gold miners.

This came after RBZ unit, Fidelity Printers and Refiners, failed to pay small scale gold miners in the last two weeks, as limited flights into Zimbabwe, due to Covid-19, had affected the smooth importation of hard currency cash required to pay the miners.

Covid-19, a viral disease first detected in Wuhan, China, has killed hundreds of thousands and infected millions across the world, forcing Governments globally to enforce lockdowns to contain its spread, which has grounded airline operations and shuttered most economic sectors.

“The challenge has been resolved. We have found a sustainable solution to manage the availability of cash to be used to purchase the gold,” Dr Mangudya said.

Dr Mangudya also said paying for gold in forex will address issues around excessive money creation, which harms the exchange rate.

“The immediate benefit of paying in US dollars is that there would less creation of Zimbabwe dollars to purchase the gold, which means less pressure on the exchange rate.

“Less pressure on the exchange rate translates to its stability which results in price stability,” he said.

It was not immediately clear how much was owed to the small gold miners, but industry sources said the miners were owed significant amounts following at least two weeks of unpaid for gold deliveries.

This also comes as FPR said yesterday small scale and artisanal gold miners will now be paid 100 percent of their sales proceeds in hard currency cash, while primary producers will receive 70 percent of sales in hard currency into their nostros and the balance will be paid in local currency.

Small scale gold miners, many of whom are artisanal miners and do not have Nostro or ordinary bank accounts, will now get paid entirely in cash to entice them not to smuggle out the bullion at the expense of the country. Although they are small and use rudimentary and less sophisticated mining techniques and equipment, the miners account for 60 percent of Zimbabwe’s gold output.

Zimbabwe’s gold output dipped to 1 464,3kgs in April compared to 2 126,35kgs a year earlier.

During the period under review, small-scale miners produced 728,9 kgs, while large-scale miners produced 735,4 kgs. Zimbabwe targets 35 tonnes of production this year against 27 tonnes last year when earnings dropped to US$946 million.

Gold is Zimbabwe’s single largest foreign currency earner, accounting for nearly 30 percent of total annual foreign currency earnings (US$1,3 billion in 2019) and together with platinum generate over 60 mineral exports.

Zimbabwe Miners Federation ZMF chief executive Wellington Takavarasha, said in a letter to members last week that he had been told that limited inbound flights had affected importation of cash to pay miners.

“Due to the Covid- 19 pandemic, there has been a limited number of flights into the country and this has adversely affected their operations,” Mr Takavarasha said.

A LOCAL businessman has been sentenced to 10 years imprisonment by a Bindura magistrate for swindling his Singaporean business partner of an investment worth US$517 000.

Fradreck Utsiwegota (38) fraudulently changed the shareholding structure and sold the mining company’s assets using a fake writ of execution order.

He will spend seven years in jail after magistrate Tinashe Ndokera suspended three years on condition of good behaviour.

Ramason Bupedra, the Singaporean, had initially stopped his partner Utsiwegota from further selling company assets through his lawyers Augustine Borerwe and David Ngwerume.

The court heard that Utsiwegota had sold several assets which include mining stamp mills valued at US$81 000, generators valued US$25 000, vehicles valued US$102 000, motorbikes, water pumps and electric motors worth thousands of dollars.

Bupedra told the court that he formed Decade Mining in 2012 with Utsiwegota and David Barnett Silver, whose whereabouts are unknown.

On June 27, 2013, due to differences among the directors, Silver was barred by the High Court from acting as a director.

The company went on to acquire several assets that included trucks, mills, generators, compressors and water pumps.

In July of that same year, Bupedra left Zimbabwe for Singapore to attend to other business interests, leaving Utsiwegota in charge of their gold mill in Shamva.

During Bupedra’s absence, Utsiwegota would send him messages, urging him not to come back, claiming their mining business was facing political interference and that his life would be in danger.

Out of fear, Bupedra stayed away and only returned to the country in February 2018, following a change of government.

Upon his return, Utsiwegota allegedly told him that he had done a share swap deal with Silver and now owned 76%.

Bupedra went to the Registrar of Companies to verify the purported change, but the company file could not be located.

Bupedra then went to the company premises and discovered that several assets had been sold.

On enquiring, Bupedra was told that a fraudulent company called Utsi Mining Syndicate, purportedly owned by Utsiwegota’s brother, Emmanuel obtained an order against Decade Mining Company under a High Court matter which he did not know.

The Singaporean then went back to the Registrar of Companies to verify the Utsi Mining Syndicate shareholding and found out that the registration number used at the High Court was for a company called Dual Holdings whose directors are Denford Juru and Monalisa Chipatiso.

That is when he discovered that he had been duped by Utsiwegota and his brother Emmanuel who used a non-existent company to fraudulently obtain a court order used to strip Decade Mining of its assets.

Source: Newsday

AngloGold Ashanti Ltd. has reported 164 cases of the novel coronavirus among its workers at a gold mine in South Africa, raising new questions about how to prevent the virus from spreading in deep underground mines.

The cases were discovered at Mponeng, the world’s deepest mine, where operations extend as far as four kilometres beneath the Earth’s surface.

In response, the company has temporarily closed the mine and begun tracing the contacts of those who tested positive, using an electronic tracking system. It says the “vast majority” of those who tested positive are showing no symptoms of illness.

The new outbreak is by far the largest number of cases detected at any South African mine so far. It has tripled the total number of cases in the country’s mining industry, which until Sunday had reported 85 cases.

South African union leaders, worried about the difficulty of physical distancing in underground mines, have called for the testing of all workers before they return to work. But the industry says this would not be feasible because of a shortage of test supplies.

About 450,000 people are employed in South Africa’s mining sector. The country is among the world’s biggest producers of gold and platinum.

To help protect workers from the virus that causes COVID-19, South Africa’s underground mines were limited to 50 per cent of normal capacity when they were allowed to reopen in mid-April after the first phase of the country’s lockdown. But many mining companies have been pushing for a full reopening, saying they cannot be profitable at half-capacity.

In a speech Sunday night, President Cyril Ramaphosa announced that mining and most other economic sectors will be allowed to reopen fully on June 1, as long as they screen their workers and take other precautions. But he also warned that the risk of a “massive increase in infections” in South Africa is now greater than ever.

Other outbreaks of coronavirus in South Africa’s mining sector have included 34 cases at the Dwarsrivier chrome mine, owned by Assore Ltd., and 19 cases at the Marula platinum mine, owned by Impala Platinum Holdings Ltd.

AngloGold Ashanti, in a statement on Sunday, said it detected its first coronavirus case last week. Since then, the South Africa-based company has conducted 650 tests among its workers, with only a handful still awaiting results. This means that about one-quarter of the tests were positive – a much higher rate than anywhere else in South Africa’s mining sector.

At the Dwarsrivier mine, for example, about 6 per cent of tests were positive. For the industry as a whole, 85 cases were reported from 3,035 tests, for a 3-per-cent positive rate. One death has been reported among those who tested positive.

Nearly 200,000 mine workers have been screened before returning to work so far, according to the Minerals Council South Africa, which represents the industry.

Screening, however, is a process that checks primarily for illnesses or other symptoms of the virus and has difficulty in detecting asymptomatic cases, unless they are contacts of someone who tested positive.

Thuthula Balfour, head of health at the Minerals Council, told a media briefing on Friday that the testing of all workers would not be a “panacea” to protect mines, since a worker who tests negative could be infected the next day. It would be impossible to test 450,000 workers every day, she said.

There are limited testing resources in South Africa, and it would be unfair for the mining industry to monopolize those resources, Dr. Balfour said.

The industry, however, is searching for ways to expand its testing capacity, she said.

South African media have reported that some mining industry leaders are frustrated in the delays in obtaining coronavirus test results from South Africa’s health laboratories and are looking for ways to speed up the process with their own testing processes.

The National Union of Mineworkers, one of South Africa’s biggest unions, said last week that it was worried by the growing number of COVID-19 cases in the mining industry.

“Workers cannot be sacrificed for profits during the crisis,” the union said, urging its members to refuse to work in any mine where strict measures are not imposed to protect them from the virus.

South Africa’s Labour Court, in a ruling this month, has expressed similar concerns. “Whether in moving between entrances or exits to different parts of a mine, in underground cages, in transport to and from mines, or in mine dormitories, it is impossible for mine workers to avoid contact with others who may be infected,” the court said.

THE Reserve Bank of Zimbabwe yesterday announced that forex retention for gold had been revised up from USD 55% and 45% rtgs to USD 70% to 30% rtgs. The Apex bank also revealed that Miners will be paid 100% USD for fine gold.

In a statement, FPR general manager Mr. Fradreck Kunaka said the new gold trading framework was with effect from 26 May 2020.

“Gold producers shall be paid under a 70/30 payment arrangement scheme in terms of which 70 percent of the gold sale proceeds shall be paid into the producer’s Nostro account and the balance of 30 percent shall be paid in local currency at the ruling exchange rate into the producer’s ZW$ account,” he said.

The move was received with mixed feelings but overally miners agreed it is a step in the right direction.

Legendary miner Eng Chris Murove said it was a positive move and it is plausible that government heeded miners, call.

“Its a step in the right direction and the government has finally heeded our call and I foresee deliveries to Fidelity improving”, Murove said.

Another miner said,” While I welcome the increase, there is still a catch why cap the Price at a flat fee of us$45/g when world prices are soaring on the world market.

Another added, “World price is (currently) 55usd per gram. We are getting 45usd per gram, which is in reality 80% of the world price. While we appreciate the efforts they are still a far way off 100%, no matter how it is worded”.

The most outstanding question yesterday was what is fine gold and can small-scale miners produce fine gold?

What is fine gold and can ASM produce it

Fine gold is the total weight of gold without any impurities and it is only attainable by refining. ASM produce gold raw bullion which has to be refined to produce fine gold. A gold refinery receives the raw bullion and re-liquefies the metal in a hot furnace, then adds various chemicals to the molten substance to separate the gold from the other metals.

We have written a lot of articles about this and finally, someone has listened. The Elephant in the room has finally been addressed however the area of concern now is the 30% rtgs payment. The disparity between the official USD rate and bank rate vs the parallel market rate needs to be fixed to solidify Fidelity’s market share.

Fidelity Printers and Refiners, (RBZ’s gold buying unit) has adjusted gold buying rates to 70%usd and 30%rtgs. The RBZ announced that Fidelity will be paying 100%usd for fine gold pegged at a flat fee of 45usd/gram.

Mining Zimbabwe could not get a comment from Mr. Kunaka as he is currently in a meeting.

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