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Why gold delivery to FPR is declining

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Why gold delivery to FPR is declining

Last month the president of Zimbabwe Miners Federation (ZMF) Henrietta Rushwaya reportedly said that gold output to FPR in 2019 production had drastically dropped from 500kg to 20 kg a week. Fidelity used to average 1- 2 tonnes per month, end of February stats showed a paltry delivery of 20kg.

Rudairo Dickson Mapuranga

The drastic decline in gold delivery to Fidelity printers and Refiners (FPR) is as a result of many factors, last year miners were advocating for foreign currency retention of 90 to 100 percent because the 70 percent they were receiving was not viable and re-investing the money for operations and development was always a challenging to the them considering the fact that consumables are sold in USD or at a market RTGS dollar amount that reduces the real gold value.

FPR is the sole gold buyer, refiner and exporter of gold in Zimbabwe and subsidiary of the Reserve Bank of Zimbabwe (RBZ). Following the announcement of the new monetary policy in February, gold delivery to FPR extremely declined due to many factors chief among them is the lowering of forex retention percentage from 70 to 55. The following are the major reasons why gold delivery to Fidelity Printers and Refiners continue to decline despite increases in gold mining activities.

Miners suspended operations

Small scale and artisanal miners have been protesting over the reduction of foreign currency retention by the Reserve Bank of Zimbabwe, this has led some reportedly suspending their operations. However, representatives of small scale miners who refused to be named said that artisanal miners are only saying that they have suspended operations in a disguise to decoy the fact that they have only suspended delivering gold to FPR.

Fuel shortages

Following the high popular fuel shortages and price hikes, the delivery of gold to Fidelity Printers and Refiners have been on a precipitous decline, this is due to the fact that many small scale and artisanal miners who were delivering more gold to fidelity usually operate with machineries that uses diesel or petrol. ZMF even applied a license for the importation of fuel in order to improve production among small scale and artisanal miners, however, the association is complaining that, fuel import fees charged by the Zimbabwe Energy Regulatory Authority (Zera) are excessively high and prohibitive.

Gold milling centres under declaration

The deputy minister of Mines and Mining development Polite Kambamura was quoted by The Sunday News saying that, around 60 percent of gold millers in Zimbabwe were not declaring their production to Fidelity Printers and Refiners. The deputy minister went further saying that those gold milling centres will be forced to shut down. However this did not go well with some miners who accused the government of seeing ghosts.

One miner advised the government to withdraw unscrupulous licenses issued to private individual most of them he accused of being connected to top politicians and also advocated for the government through Fidelity to pay gold producers their money without delaying.

“The government should start by withdrawing the gold buying licenses, it issued to private individuals who are obviously the chief culprits in gold leakages, and then carry out a self-introspection of itself by making good the outstanding payments to various mining houses for gold delivered to Fidelity but not yet paid for, which is causing gold mine closures and therefore affecting a lot of working miners and their families. Government should not look at the speck in the eye of the milling houses ignoring the logs in its own eyes” he said.

Miners selling on the Black market

Following the announcement of the new monetary policy, gold delivery to FPR declined due to the fact that the RTGS to USD value being offered by the Reserve Bank of Zimbabwe is too low thereby in actual sense decreasing the value of gold in the hands of miners. This has reportedly caused miners to abandon formal channels of exporting their productions to informal channels that are reportedly paying a reasonable price.

Following an outcry by miners after the lowering of the foreign currency retention threshold from 70 to 55 percent by Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya in his recent Monetary Policy Statement, the deputy minister reportedly said that the government is considering reviewing the RTGS incentive from 1:2,5 offered by banks to 1:3,5 for small scale and artisanal miners, “Initially there was a lot of noise before we engaged the RBZ Governor. After engagement he did not review the retention figure as such but put an incentive instead of 45 percent being in the ratio of 1:1 he reviewed to 1:3.50. So a lot of miners are happy and they are quiet and we actually expect our March production to improve,” he said.

However this did not go well with other miners who accused the government of being inconsistent in policies and being one sided instead of solving problems for every exporter.

“Another lopsided idea. Why not all gold producers? So the RTGS$ is not market driven if RBZ has to pay more? Zimbabwe’s problem is policy inconsistencies” Kennedy Mtetwa said.

Anti-mining activists in South Africa face harassment, death — report

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Anti-mining activists in South Africa face harassment, death — report

Community activists who oppose mining projects in South Africa live in constant fear as they are often harassed, threatened and sometimes killed, a group of human rights advocates says.

In a joint report and video released on Tuesday, the Centre for Environmental Rights, groundWork, Earthjustice, and Human Rights Watch say locals who mobilize to raise concerns about potential environmental and health risks arising from mining and coal-fired power plants have reported intimidation, violence, damage to property, use of excessive force during peaceful protests and arbitrary arrest.

Community activists opposed to mining face violence, intimidation, as well as legal and bureaucratic hurdles while trying to express their rights — report

South Africa has one of the world’s biggest and oldest mining industries. The country is a top producer of platinum, palladium, and it also has significant gold and coal operations.

All those activities tend to trigger divided positions. While mining operations and projects bring jobs and other opportunities to locals, they often also clash with locals because of the impact they have on land use ranging from traditional burial grounds to grazing land.

Municipalities frequently block attempts by communities to protest against projects by using reasons that have no basis in law, the 74-page report entitled “We Know Our Lives Are in Danger” contends. Peaceful demonstrations are repeatedly violently broken up by police, it reads.

The joint report documents threats and attacks in four provinces between 2013 and 2018, acknowledging that their origins were often unknown. Activists, however, believe they were instigated by the police, government officials, private security companies or other groups acting on behalf of mining companies.

Hoping to find their own answers, the authors conducted interviews with more than 100 activists, community leaders, environmental groups, lawyers representing activists, police, and municipal officials. They also wrote to government agencies and several mining companies with a presence in the research areas.

Four out of eleven companies responded, the report shows. The Minerals Council of South Africa, representing 77 mining companies, also replied, noting it was “not aware of any threats or attacks against community rights defenders where [its] members operate.”

Mining companies also have concerns of their own. Canada’s Fraser Institute ranks South Africa as the tenth-worst country in the world in which to own mining interests, out of 91 mining nations.

Most miners report that regulatory uncertainty, the taxation regime, labour relations and employment law, and political instability are deterrents to investment in the sector._Mining.com

Katanga Mining resumes cobalt exports from DRC

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Katanga Mining resumes cobalt exports from DRC

Katanga Mining Ltd, a unit of Glencore Plc, said on Monday it resumed exporting and selling a limited quantity of cobalt from its Kamoto Project in the Democratic Republic of Congo (DRC).

The company said in November it had temporarily suspended the export and sale of cobalt from the project after uranium was found in levels above the acceptable limit for export.

Katanga said on Monday it produced about 930 tonnes of contained cobalt since January through interim operational solutions.

The company also said it will focus on processing an ion exchange plant, which will help remove the excess level of uranium.

In November, Katanga had said it expects the plant to be completed by the end of the second quarter.

Analysts have said that they did not expect any material hit to Glencore from the temporary halt in exports.

Glencore’s shares were down 0.5 percent in afternoon trading on the London Stock Exchange._Reuters

Two soldiers killed in violent altercation with gold panners in Bindura

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Two soldiers killed in violent altercation with gold panners in Bindura

Suspected illegal small scale gold miners popularly known as “Mashurugwi” allegedly killed two soldiers while one is battling for life at Bindura Provincial Hospital following a dispute over sex workers at Chiwaridzo, Bindura yesterday morning.

Mashonaland Central police spokesperson Inspector Milton Mundembe confirmed the incident, but could not give details.

“Yes, two soldiers were killed by machete-wielding gold panners, but investigations are still in progress and we are yet to establish what really transpired,” Mundembe said.

A witness, Nyasha Muwomba alleged that the soldiers clashed with artisanal miners who thought they would lose out on some commercial sex workers at a local bar, resulting in a bloody fight that claimed the life of the two soldiers.

“These soldiers were killed by jealousy gold panners who did not want them to snatch their commercial sex workers. They were fatally struck on the neck, faces and back and died on the spot. The survivor is in critical condition,” Muwomba said.

Another source who declined not to be named said that after the killings, a team of police and soldiers went on the rampage, harassing sex workers and force-marching them to the police station for questioning as they hunted for the culprits.

The soldiers were allegedly part of the team that was taking part in rehearsals for Independence Day celebrations to be held in the town tomorrow.

Names of the deceased could not be establish by the time of going to print._NewsDay

Rifle-wielding robbers up for Diamond theft

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Rifle-wielding robbers up for Diamond theft

FOUR suspected rifle-wielding armed robbers appeared in court facing accusations of stealing diamond ore in Chiadzwa where Zimbabwe Consolidated Diamond Company (ZCDC) is operating.

Foaster Mukwada, Amato Zivanai, Munyaradzi Charakupa and Brian Marungamise appeared before Mutare magistrate Mr Lazarus Murendo charged with 10 counts of robbery.

They denied the charges when they initially appeared in court before being remanded in custody to April 17 for trial.

Prosecuting, Mr Brighton Shamuyarira, alleged that on March 24 last year at around 3am, Mukwada and Zivanai armed themselves with AK47 rifles.

They then called about 100 illegal miners and went into ZCDC mining concessions.

Reports are that they cocked their rifles and ordered security guards to lie down before tying them up.

Further allegations were that they, along with the illegal miners, stoned policemen who were at the gate.

It is said that they stashed diamond ore into sacks and vanished.

Mukwada was in possession of US$1 320 which he intended to pay the illegal miners.

Mr Shamuyarira said on April 4 this year, the quartet connived and hatched a plan to rob ZCDC of diamond ore again.

In pursuit of their plan, they proceeded to the mining concessions with their vehicles along with some illegal diamond miners.

Police detectives who were on patrol received information and swiftly reacted, leading to their arrest.

In a separate, but related matter, a general worker at Lead Mine, Patrick Nkoma, appeared in court after he allegedly stole 10kg of gold ore from his employer.

Nkoma denied the charges when he appeared before Mr Murendo who remanded him to April 17 on $100  bail.

Vast resources ready for Zimbabwe diamond mining

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Vast resources ready for Zimbabwe diamond mining

Vast Resources Plc (Vast) says it has raised US$393 130 through a placement and subscription of shares as it prepares for the signing of a joint venture contract at Chiadzwa.

This comes as the Aim-listed diversified miner last week announced it is disposing its gold business in the country to enable the group to refocus on its two growth opportunities – the Heritage diamond concession in Zimbabwe and Baita Plai polymetal mine in Romania.

Meanwhile, Zimbabwe’s exports to the UK have increased by 276 percent to US$112 million in 2018 from US$30 million in 2012, according to ZimTrade, with Harare now working on strengthening bilateral and trade ties with London in preparation for BREXIT.

The UK is preparing to leave the European Union in the next few months and Zimbabwe has already drafted a bilateral trade agreement in preparation for BREXIT to strengthen the already existing trade relationships, ZimTrade said yesterday.

Mzi acts to save Mazoe and Shamva

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Mzi acts to save Mazoe and Shamva

Former Zimbabwe largest gold producer Metallon Corporation’s owner Mzi Khumalo, has reportedly filed for business rescue for two of its subsidiaries, Goldfields of Mazowe Limited and Goldfields of Shamva Limited, in order to protect the companies’ assets from being seized by creditors.

The Business rescue process, as established by the South African Companies Act 2008, provides a company experiencing financial distress with an opportunity to restructure its operational model and improve cash flow by offering a temporary suspension on legal actions or liquidation measures against the company, giving it an time to cut down its debt and produce the best outcomes for all the company’s stakeholders – creditors, employees and shareholders.

Both Goldfields of Mazowe Limited and Goldfields of Shamva Limited have struggled to remain afloat over the last two years in the face of a hostile Zimbabwean economy. Mining executives in Zimbabwe have recently complained about issues affecting their operations such as exchange rate disparities causing a mismatch between revenue and costs, as well as high-interest rates on the market making it challenging for mining companies to raise capital. Khumalo has struggled to raise $400 million in order to expand Metallon’s gold mines four-fold in order to scale and attain critical mass.

Metallon’s companies owe tens of millions of dollars to some of its service providers. In February, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) took Metallon Corporation to court to compel the gold miner to settle a $9.3 million bill for power supplied to three of its mines. Last September, Metallon announced it was considering paying mining-equipment suppliers in gold because a cash shortage in Zimbabwe was hindering its plan to expand output. In the same month, Goldfields of Mazowe announced a plan to retrench hundreds of employees after the company was put under care and maintenance. Production at Metallon’s mines have since been halted in order to allow creditors to attach property and mining equipment. A representative for Metallon declined to respond to a request for comment.

Metallon is Zimbabwe’s largest gold mining company, operating four gold mines throughout the country. The company, which is headquartered in London, was founded in 2002 when Mzi Khumalo acquired Lonmin’s Zimbabwean gold assets for $15.5 million. Khumalo, 63, is one of South Africa’s most recognizable businessmen and a former anti-apartheid activist. Apart from Metallon, Khumalo owns extensive business interests in the financial services and infrastructure industries.

Forbes

Chinese mine employees protest over poor working conditions and low remuneration

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Chinese mine employees protest over poor working conditions and low remuneration

PRODUCTION at Chinese firm, Ming Chang Sino-Africa Mining Investments’ lime factory in Bubi District, Matabeleland North came to a halt last week after an acrimonious row between management and its employees over poor working conditions and low remuneration.

Workers at the lime plant staged a two-day sit in on Monday and Tuesday protesting against lack of proper protective wear, harassment and poor remuneration. The company extracts limestone for the production of lime and also does quarry stone mining for the production of construction aggregate.

“We had been complaining for some time to the management to address the issue of PPE (Personal Protective Equipment). We are being forced to work without proper protective wear exposing ourselves to hazardous fumes and risking losing our limbs or being burnt. We are constantly subjected to insults and sometimes assault by some management staff, as if this is not enough we are receiving a paltry $7,50 per hour per shift of nine hours, which is way below the prescribed lawfully rates,” said one of the workers on condition of anonymity in fear of victimisation.

Lawfully prescribe rates for the lowest paid miners are pegged at $18,00 per hour per shift of nine hours.

The workers said after their two-day sit in management barred them from operating any equipment or carrying out duties at the plant for three days. 

Zimbabwe Diamond and Allied Minerals Workers’ Union organising secretary Mr Tarisai Mhiko confirmed receiving a report from workers at the lime manufacturing plant.

“We received a call from Bubi Rural District Council that employees at the mine had staged a two-day sit in at the company’s premises in protest against poor remuneration and inhuman working conditions as well as lack of protective clothing wear. 

“The workers are claiming that they are being forced to work without protective gear such as dust mask, overalls and safety shoes. We registered the issue some time last year with the National Employment Council but the date for the sitting hasn’t been set yet,” he said.

When Sunday News Business visited the plant on Friday workers could be seen milling around near the factory’s entrance and one of the Chinese management staffer referred all questions to the company’s lawyer Ms Gamuchirai Dzitiro of Mutumbwa, Mugabe and Partners.

Contacted for a comment Ms Dzitiro refuted the allegations levelled against her clients but stated that the employees had embarked on an unlawful collective job action. 

“What I am aware of is that there is a pending labour dispute against employees, which is pending. There is an unlawful strike, which matter the Ministry of (Public Service) Labour and Social Welfare is seized with . . . An employer is complaining here that these people have stopped work and I am losing money because of this unlawful job action. At this point what we will just advice our client is not to make any comment on this matter because it’s sub judice, it’s now before a court, a competent labour tribunal,” she said. 

Ms Dzitiro said she was unaware of the ill-treatment being perpetrated by the company’s management as no formal complaint has been filed against them.

“We don’t have a single labour case, which is pending in which they (employees) complained of ill-treatment but if they have a case number of the pending case whereby they placed such grievances before a labour officer, I would be pleased to go through it but to our knowledge the company never received any such form of complaint,” she said.

The company started operation in June last year and employs over 70 people._The Sunday News

Rushwaya bounces back

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Rushwaya bounces back

A ZIMBABWE Miners Federation (ZMF) Special General Council has pledged its  support for under-fire president Ms Henrietta Rushwaya and unanimously passed a decision to rebrand.

The rebranding of the association was the major decision made during a meeting held in Kwekwe on Thursday with more than 20 affiliate associations from across the country unanimously supporting the motion. Among other decisions, the general council also unanimously declared Ms Rushwaya the legitimate leader of the federation, dismissing another structure led by Mr Ishmael Kagoro as null and void.

The decision comes amid the ZMF leadership led by Mr Kaguru challenging Ms Rushwaya’s leadership accusing her using “unorthodox” means of taking over the leadership of the ZMF. Last week the High Court declared the results and proceedings of the elections which brought Ms Rushwaya  to the helm of the small-scale miners’ body invalid.

But Ms Rushwaya, has since appealed to the Supreme Court against a recent High Court order which stripped her of the presidency of the small-scale miners’ body. 

Chair of the general council, Mr Makumba Nyenje said the council had agreed to rally behind Ms Rushwaya. He said until the Supreme Court rules otherwise (after Ms Rushwaya’s appeal), Ms Rushwaya would remain the legitimate leader.

Speaking to journalists after the meeting, Ms Rushwaya said the rebranding had nothing to do with the ongoing leadership wrangle but it came after the realisation that the organisation needed to be all encompassing.

“As ZMF, we had been requested by the general council as of 26 September 2018 with regards a proposal requesting that we rebrand from ZMF and come up with a new name. We are not totally divorcing ourselves from the functions of ZMF but we are only widening our scope to become an all-encompassing body.

“We are coming up with an all-inclusive approach where we are taking on board small-scale miners, artisanal miners, gold buyers among other smaller groups who have not been given due recognition in the past. We want to bring people together under one roof under umbrella representation where they can all be represented,” she said.

She said there was need to unite all miners so that they play their key role in economic development role and help achieve vision 2030.

“We are coming up with an approach that is in line with Vision 2030 as enunciated by President Emmerson Mnangagwa where we are targeting a middle-income economy by 2030. As miners, we should put all these squabbles aside and set our eyes on achieving our goal. Last year we managed to surpass our 30 tonne gold target, and if we unite again this time, nothing can stop us,” she said.

Although a new name was yet to be adopted, Ms Rushwaya said there were a number of names that were being toyed around with.

On the ongoing leadership wrangle, ZMF legal advisor Advocate Tapson Dzvete told the members that Rushwaya was still in charge as long as the Supreme Court was yet to make a ruling._The Sunday News

RioZim posted significance milestone towards Sengwa power plant preparatory works

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RioZim posted significance milestone towards Sengwa power plant preparatory works

Zimbabwe has edged closer to getting its first major independent power station following revelations that diversified miner, RioZim, has posted significant milestones towards completing preparatory works for its longstanding US$2,2 billion Sengwa power plant to be built in Gokwe North.

The 2400 megawatts project is an integral part of Government’s goal to guarantee security of power supply and ensure self-sufficiency on electricity by facilitating investment in power generation by independent producers such, as RioZim.

Zimbabwe needs an average of 1 600 megawatts at peak periods of demand for power, but is currently only able to deliver an average of 1 400MW to 1600MW due to constrained generating capacity caused by old and antiquated power infrastructure, especially base-load plant Hwange.

Power shortages are bridged with imports, which require the elusive foreign currency and power rationing, which disrupts industry and household activities.

Sengwa is among several independent power projects (IPPs) licensed by the regulator, Zimbabwe Energy Regulatory Authority (Zera) over the past few years, as Government took deliberate steps to placate the crippling power shortage in the country.

Significant progress has been made since the gold and diamond miner, RioZim, signed an exclusivity agreement with Power China in September last year, paving way for the start of preparatory works for construction of the plant.

Power China was among six shortlisted prospective investors that included United States electrical systems behemoth General Electric (GE), for the project.

A company source, who sits on the RioZim board, told The Sunday Mail Business that the contractor for the project, Chinese State owned firm, Power China — a sister company of Sinohydro-had already completed the plans for the water pick up site in Kariba. Further, Power China has reportedly completed mapping out the route for the water pipeline that will transport water needed for cooling at the coal fired power station in Sengwa.

Efforts to get a comment from RioZim Limited group chief executive officer Bheki Nkomo, were unsuccessful by the time of going to print, but sources privy to the developments said that everything on Sengwa power project was on full throttle and the relationship with Power China had been smooth.

“Things are moving. We are working very well with Power China on the project in Gokwe. We have almost completed the plans to pick up water in Kariba.

“Our target is that by end of June this year we should have completed drawing up the Bill of Quantities for the project, so we are getting under the radar,” the source said, adding plans were afoot to start developing a town in the area.

The source also said RioZim had engaged the Ministry of Local Government, Public Works and National Housing to facilitate with the planning of the residential town and all other critical infrastructure that will be required by workers and the company once the power station comes to fruition.

Further, RioZim has also initiated the process of getting a special economic zone status (SEZ) for the Sengwa power project, which will bring a number of benefits for the project. “Everything pertaining to the project, we are on full throttle,” the source said.

Officials of Power China are reportedly already on the ground and in the process of preparing the Bill of Quantities on the water pipeline and evacuation power lines. They are also updating details on two issues as required by financiers of the project in China.

Power China  is a sister company of Sinohydro, which undertook the US$533 million expansion of Kariba South and also landed the contract to carry out the US$1,4 billion Hwange Power Station’s Unit 7 and 8 extension.

“The bank wanted to know the cost of the water pipeline from Kariba to Sengwa, so they are currently costing out that, then the cost of evacuation lines from Sengwa to Sherwood, they wanted proper costing,” said another source.

Upon completion, Sengwa will be among Zimbabwe’s three biggest power plants, including the 2 400 MW Batoka being jointly pursued by Zambia and Zimbabwe, 900MW Hwange plant (under expansion) and 1050MW Kariba South station.

Further, the envisaged thermal power project will be fed from RioZim’s coal claims, which are understood to hold more than 1,3 billion tonnes of the commodity.

Over the years, the company has been struggling to secure funds for the project. But the pro-business administration of President Emmerson Mnangagwa has renewed investor interest, which open the gates for Sengwa._The Sunday Mail

 

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