Mining ZimbabweLatest Mining News, Policy and Industry Updates

Coal producers and Zesa Holdings come face-to-face at a crunch meeting next week to thaw frosty relations amid revelations the power utility is struggling to pay for coal deliveries with its debt growing by more than half to ZWL$103m.

The debt was ZWL$68m in November and there are fears the failure by Zesa to honour its obligations threatens the generation of electricity. Hwange Power Station is a key generator as low water levels at Kariba have affected generation capacity.

Coal Producers Association chairman, Raymond Mutokonyi, told Business Times that a crunch meeting convened by the ministry of energy and that of mines is expected to bring finality to the deadlock.

“The reason why the debt is ballooning is that Zesa only pays ZWL$2.5m weekly instead of ZWL$10m we have agreed upon,” Mutokonyi said.

“Instead of honouring its obligation, Zesa executive chairman Sydney Gata is dismissing our coal as useless, a move which we are not taking lightly as coal producers.”

Last week, Gata told state media the power utility was paying coal producers notwithstanding that some of the supplies were sub-standard and damaging equipment.

“I was in Hwange and everyone is complaining about the quality of coal.

Only Hwange can complain, not all those makorokozas,” Gata was quoted as saying. When asked if the coal producers can cut supply to Zesa,

Mutokonyi said dialogue between coal producers and Zesa is the only solution to the problem.

Zesa is owed over ZWL$1.2bn by its customers including mining companies that owe the power utility over $200m.

The country is grappling with serious power outages after Kariba downed production to 360MW from the installed capacity of 1050MW, leaving the country to be dependent on thermal power stations and imports.

Zimbabwe, which is generating 464MW, requires 1,400MW daily with the rest of the megawatts coming from imports from South Africa and Mozambique.

Thermal power stations, which are powered by coal, are not producing enough due to lack of diesel for the excavators for coal mining.

As of January 20, Hwange was generating 64MW due to flash floods that have affected the area but the thermal power stations returned to normalcy on Tuesday.

Mutokonyi said since Zesa is ordering mining companies to pay in foreign currency, it should also pay them in forex the equivalent of ZWL$103m at the interbank rate.

However, according to coal producers, Zesa is not willing to pay anything, later alone in forex. Mutokonyi said although Treasury has allocated fuel to the mining companies, the diesel is not enough for the extraction of coal.

Resultantly, production has gone down by a big margin making it difficult to generate electricity for other thermal stations besides Hwange.

Most of the coal extracting machines including excavators require diesel to function and in the absence of the precious liquid commodity some mines are operating at a very low level.

When contacted for comment, Gata said he does not do interviews over the phone instead he referred this reporter to the public relations department for interview booking.

Business Times

Zimbabwe Consolidated Diamond Company has been urged to upscale investments in renewable energy as a solution to power shortages that has depressed its productivity.

This is contained in a recent study released by the Chamber of Mines which highlighted that mining executives were wary of the recurrent and prolonged power outages.

“Executives of mining companies operating below full capacity mentioned acute power outages, inadequate foreign exchange allocations, capital shortages, high-cost structure and obsolete equipment as the major constrains weighing down capacity utilization in the mining industry.

“The majority of respondent (80%) mining executives indicated that mining companies are facing regular and prolonged power outages resulting in production stoppages….” reads part of the report.

Such regular and prolonged power outages have resulted in depressed productivity in the mining sector, as it is heavily reliant on the availability of electricity to power machines used in processing minerals.

Minister of state for Manicaland Dr. Ellen Gwaradzimba is on record chiding the Zimbabwe Consolidated Diamond Company (ZCDC) for being subject to power rationing saying this was a manifestation of failure to invest in renewable energy.

“It is surprising to hear that ZCDC is also not operating at full capacity because it is subjected to power rationing and it cannot meet the cost of fuel to run the plant when there is no electricity.

“This is an anomaly the mine should run without a stop and they should consider investing in renewable energy to solve the problem of power, this would be a long-lasting solution because mining should not stop,” said Gwaradzimba.

Zimbabwe Environmental Law Association (ZELA) deputy director Shamiso Mutisi says big mining concerns should make tangible investment which can not only benet the sector but the community at large.

“ZCDC should invest in national project which a can leave a legacy, like setting up a solar power plant or farm for renewable energy that can also feed into other sectors besides mining,” said Mutisi.

263Chat

MINING communities around Zimbabwe are under siege. Marauding gangs of machete wielding thugs are roaming around gold rich districts unleashing violence and brutal murders on a scale never seen before. 

They have seemingly become a law unto themselves and have struck fear into communities in the countryside. From Mazowe in Mashonaland Central right through the Great Dyke in the Midlands province into Matabeleland South, gangs of men armed with machetes, axes, guns and other deadly weapons have of late been on a warpath, committing heinous crimes such as armed robbery, murder and attempted murder. Small gold mines, gold buyers and stamp mills are their prime targets. With the body count on the rise, the Zimbabwe Republic Police has come under immense pressure to contain these gangs – commonly known as maShurugwi. 

Over the weekend, we reported on the latest incident involving machete gangs. A mine worker was shot dead while several others were injured when about 10 robbers armed with a gun and machetes went on the rampage attacking people in Maphisa, Matobo District. The armed robbers who targeted a mining compound and shops, randomly fired shots. Corgen Moyo (42) who was employed at Antelope Milling Stamp, died on the spot after the armed robbers shot him while forcing their way into his room at the mine compound. 

After raiding and shooting Moyo dead, the robbers moved to Falcon Complex, about a kilometre away, where Zanu-PF district offices are also housed and attacked workers at the shops. There, the armed robbers also randomly fired shots and got away with R4 000 and US$80. The victims revealed how the armed robbers randomly fired at people while attacking some with machetes. 

“These people arrived just before midnight and it’s not like we had gone to bed. Some of us were still killing time at a fire place. They invaded the compound carrying a gun that we suspect was an AK47. They were also armed with machetes and started shooting at random. Some of us managed to escape as we were outside,” said one of the survivors. 

Antelope 12 Milling Stamp manager Mr Taurai Vengesai said everyone at the mine compound was now living in fear following the raid by the robbers. “We are all terrified by this attack on innocent people who were going about their business. How safe are we in mining areas when armed robbers can just pounce on us any time? We have been told that they also raided the Complex where they attacked several people and got away with cash,” said Mr Vengesai. 

He said police should swiftly react to reports of armed robberies. Indeed, police need to be on top of the situation to arrest the scourge of machete gangs. It appears they have become emboldened by the apparent incapacitation of the ZRP to deal with machete gangs. 

Mining is one of the country’s top foreign currency earners with minerals accounting for the bulk of Zimbabwe’s export receipts. We therefore cannot afford to have lawlessness disrupting activities in mining areas. We feel it is time the ZRP adopted a hardline stance towards machete gangs. 

Clearly these criminals have now become a threat to national security and all agencies should be mobilised to deal with them. Our intelligence apparatus should be ahead of these thugs and provide information that will help to stop their nefarious activities. In mining communities, these people are known and their activities are in the public domain. 

While locals may fear retribution if they out them, it is the duty of the police to ferret out information about these gangs and hold them to account for their dastardly deeds. Zimbabwe cannot be held to ransom by a bunch of thugs who seek to reap where they did not sow. We posit that the scourge of machete gangs can be eradicated but this requires the collective efforts of mining communities and law enforcement agents. Mines should put in place stringent security measures around their premises while the police should respond promptly to distress calls from the mines. There should be random roadblocks and checkpoints around mining areas with the police on the lookout for people carrying dangerous weapons. 

We note that more than 1 800 members of machete-wielding gangs have been arrested in the past month around the country. This is commendable but more should be done. As efforts to turnaround the economy gather momentum and the mantra, “Zimbabwe is Open for Business” gains traction, the country can ill afford to have its image tarnished by machete gangs. 

In this vein, we are glad that the Government has prioritised the elimination of violence in mining communities through capacitating the ZRP to clamp down on these gangs. It is also gratifying to note that the fight against machete gangs has the backing of the highest office in the land — that of the President.

The Chronicle

A coalition of extractive sector non-governmental organisations have called for adoption of legal reforms which foster transparency as a long lasting panacea to rampant violence in the artisanal and small scale mining.

In press statement released by the Publish What You Pay (Zimbabwe), the civic groups called on government to embrace transparency reforms, saying the opaque nature of mining operations and governance are part of the root cause of Machete violence.

They also urged government to decriminalize the artisanal and small scale mining by regulating their activities.
“As the government of Zimbabwe takes action to contain machete gangs who have wreaked havoc in almost every key gold producing areas in Zimbabwe, mining sector transparency reforms must not go under the policy radar.

“To a large extent, Publish What You Pay-Zimbabwe believes that opacity, the secretive way in which the mining sector operates and governed is the root cause of violence in artisanal and small-scale gold mining (ASGM),” noted PWYP.

The grouping added blamed the absence of adequate geological data which said prevents the government from containing gold rushes.

PWYP also called for the adoption of international and regional standards of business to promote accountability in awarding of mining titles.

PWYP, Zimbabwe is part of a worldwide campaign for an open and accountable extractive industry to ensure that revenues from oil, gas, and mining are used to drive development.

Locally it includes organisations like the Zimbabwe Environmental Law Association (ZELA) Action Aid, Centre for Natural Resources Governance, Centre for Research and Development, Chiadzwa Community Development Trust, Institute for Sustainability Africa (Insaf), National Association for NonGovernmental among others.

263chat

BINDURA Nickel Corportaion’s (BNC), Freda Rebecca Gold Mine has approved the payment of salaries for its employees in United States dollars , becoming one of the few employers agreeing to settle salaries in a functional currency.

In a statement signed by the company’s manager , Eliakem Hove and seen by NewZimbabwe.com Business, the employees were assured that from this month, salaries shall be paid in US$.

“Kindly be advised that negotiations for US$ salary approval have been concluded and we have the requisite from January 2020 to December 2020.

“Henceforth payroll is being readjusted to US$ and let us expect our salaries early next week. Management wishes to advise that this offer is a privilege and any form of abuse will lead to its withdrawal,” the statement said.

However, efforts to get a comment from BNC chairman, Muchadeyi Masunda were fruitless.
Commenting on the development, Zimbabwe Congress of Trade Unions (ZCTU) secretary-general, Japhet Moyo said the company’s decision was noble.

“There is nothing wrong or amiss with paying wages and salaries in US$, especially when you are in an inflationary environment and you are liquid enough. This currency is a very stable currency that is internationally used by businesses like Freda Mine,” he said.

Workers in the country are surviving under harsh economic conditions as they are receiving similar salaries they used to get during the multi-currency era despite the fact that the local currency continues to depreciate against the US$ on both the interbank and parallel market exchange rates.

According to a 2016 report titled; “Working Without Pay: Wage Theft in Zimbabwe” by the ZCTU’s think tank, the Labour and Economic Development Research Institute of Zimbabwe (Ledriz), an estimated 80 000 workers have not received their wages and benefits on time.

New Zimbabwe

LISTED mining group, Falcon Gold Zimbabwe (Falgold) has again issued a cautionary statement advising that it is still contemplating a capital raise initiative which if concluded may have a direct impact on the price of its shares.

Of late, the gold mining concern has been issuing cautionary statements to that effect and in August last year it announced that it was considering options for an additional US$2,5 million to recapitalise its operations.

In a cautionary statement posted on the Zimbabwe Stock Exchange (ZSE) website on Friday, Falgold company secretary Mr. Qubeka Nkomo said: 

“The directors of Falcon Gold Zimbabwe Limited wish to advise its shareholders and members of the public, that the company is still contemplating a capital raise which, if successfully concluded, may have an effect on the price of the company’s shares. 

“The directors, therefore, advise the shareholders of Falcon Gold Zimbabwe Limited, and the public, to exercise caution and to consult their professional advisors when dealing in the shares of the company.”

In September last year, ZSE lifted the seven-month suspension in trading of Falgold shares after the gold miner fulfilled listing requirements of the bourse.

Falgold volunteered to be suspended from trading its shares in February 2019 after they had failed to publish their audited financial statements for the period ended September 30, 2018.

The local bourse has now lifted the suspension after the company took corrective measures to meet the obligations.

Falgold is a gold mining and exploration company in Zimbabwe founded in 1991.

It primarily explores for gold, base metals, and precious metals and has an operational processing plant and ancillary infrastructure which supports a central processing plant that treats ore from Pickstone.

Falgold is a subsidiary of New Dawn Mining Group.

New Dawn owns Dalny Mine in Chakari, Venice Mine in Kadoma and Golden Quarry Mine in Shurugwi.

The Chronicle