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Chrome miners lament over lack of solid government policy

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Chrome miners lament over lack of solid government policy

Zimbabwe Chrome Producers laments over government’s failure to implement a solid policy on chrome buying and pricing which has enabled cartels to flourish, the organization which advocates for an open market system which promotes international pricing along with policies which promotes business integrity, quality control, as well as business growth for indigenous value addition laments over the current scenario where value addition is performed by foreign owned or controlled companies.

Rudairo Mapuranga

 

According to Masango Mahlahla one of the founding members of the Zimbabwe Chrome Producers, one of the major challenges faced by small scale indigenous chrome industry is the lack of a solid policy which helps to facilitate industry growth.  As a result growth within the sector is taking place at the long term detriment of the indigenous small scale miners as both domestic and export sales take place in a market which lacks transparency (no published pricing model) and has no analytical oversight with enforcement powers to help identify and address predatory buying.

 

Mahlahla further went on to say that, predatory buying on the domestic market is of major concern as buying prices are as low as $12 USD per tonne is prevalent as chrome buying cartels have been formed to suppress the domestic sales prices while preventing new buyers from entering the chrome market.

The transportation industry according to Mahlahla is also impacted as chrome buying cartels threaten to cancel contracts of local transporters who offer their services to competitor buyers attempting to enter both the domestic and export market.

 

According to the organization, the Export market is negatively impacted by the weak mineral policies on chrome.  Chrome buying cartels are systematically increasing logistics costs as few transportation companies are available to support the industry.  This is done to systematically block new buyers from entering Zimbabwe’s chrome market ensuring that the cartels continue to dominate the market.  This therefore bleeds the market dry of foreign currency earnings as most foreign currency remains in foreign hands.

Another critical negative impact of the low buying prices according to the organization is that it leaves small scale miners undercapitalized and unable to efficiently increase production.  Noticeably absent from the mineral market is the aspect of mineral financing via banking as well as the insurance services designed to cover mineral transactions.  Internationally both are key to facilitate trade in both domestic and export markets.

 

Zimbabwe Chrome Producers also laments over foreign currency allocation to chrome producers in Zimbabwe which they say is not viable for business.

“Foreign currency availability for equipment purchases and maintenance upkeep on equipment is also of key concern.  The current RBZ allocation of forex disempowers our indigenous miners as miners require foreign currency to reinvestment back into their operations, Chrome mining is a capital intensive industry where a single piece of equipment can cost over one hundred thousand United States Dollars” said Mahlahla.

 

In response to the Ministry of Mines industry’s policy requirements, the organization drafted a chrome Producers Policy which was presented to the Ministry of Mines and Mining Development for review on March 5th 2019.  The organization is waiting for follow up meetings with the Ministry to further discuss implementation.  It is the organization’s expectation that by implementing the proposed policy, Chrome Producers will experience sustainable growth which will enable our indigenous Chrome Producers to enter the value addition industry.

“We believe the policy will also address both the future domestic consumption needs while rapidly increasing production to support increased exports to help generate the much needed foreign currency required to grow both the mining industries as well as our nation’s economy as a whole” said Mahlahla.

MMCZ in chrome investment pitch

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MMCZ in chrome investment pitch

THE Minerals Marketing Corporation of Zimbabwe (MMCZ) has assured international stakeholders that demand for chrome ore, ferrochrome and other chrome related products remains very high, thus investing in the sector remains lucrative.

Presenting at the just- ended 35th International Chrome Development Association (ICDA) conference held in Victoria Falls last week, MMCZ general manager Mr Tongai Muzenda told prospective chrome investors at the oversubscribed conference that investing locally was compelling as demand is high.

Mr Muzenda said while prices have taken somewhat of a knock this quarter, pointers on the market are that they will firm in the next quarter, and in future.

MMCZ was established through an Act of Parliament, MMCZ Act Chapter 21:04, and is the exclusive agent for marketing and selling of all minerals produced in Zimbabwe, except silver and gold.

Zimbabwe holds the world’s second largest chrome ore resource of 900 million tonnes, which translate to approximately 12 percent of global reserves, with South Africa leading the pack on the world’s total reserve that are estimated at 7, 5 billion tonnes.

But based on 2018 statistics, Zimbabwe produced just about 1,4 million tonnes of ore, which signify 4 percent of global output largely due to underutilisation of chrome rich deposits.

Zimbabwe, thus, took advantage of the just-ended ICDA to make an investment pitch in the chrome sector and its subsector.

“Demand for now is actually very good, while prices may have come off a little bit in this quarter, we foresee prices going up in the next quarter and in the future, and the demand for chrome will remain,” Mr Muzenda told over 200 international delegates attending the 35th ICDA.

“. . . because we know there is no other way of making stainless steel without chrome unless there is some new technology and substitution doesn’t seem to be anywhere nearby.

“Prices obviously are dependent mostly on the demand side of things, supply is not (a problem) much because we have all the chrome which may be required in the world. While the supply side of chrome owe is in abundance . . . the demand side needs to be stable,” said Mr Muzenda.

“When we have stability in the demand of chrome ore, ferrochrome and other chrome-related products, it helps on planning and also helps on proper investment planning.

“Also stability of the market in terms of prices is a big factor which helps in planning of what we need to produce in the future,” he said.

Mr Muzenda also noted that technology and skills have been developing rapidly in the sector and Zimbabwe stands to benefit substantially if it taps into the new trends.

New furnaces, bulky handling, among other interventions, are coming on board and efforts are being made to make sure that these also come to Zimbabwe, with Zimasco and Afrochine already taking the lead.

The MMCZ boss also called on investors to tap into the chrome exploration sub-sector as only about 5 percent of the country’s chrome reserves have been extensively explored._The Sunday Mail

Chrome policy ready by July

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Chrome policy ready by July

GOVERNMENT expects the Chrome Development Policy to be ready by July this year, raising expectations this might steer development and attract additional investment in the key mining sub-sector.

Zimbabwe holds the world’s second largest chrome ore deposits estimated at 900 million tonnes, approximately 12 percent of the global resource.

Zimbabwe last week hosted the 35th International Chromium Development Association (ICDA) Conference in Victoria Falls, which was officially opened by President Emmerson Mnangagwa.

Speaking at the event, the President assured foreign investors that the country had liberalised investment conditions to the extent that they are free to partner local businesses of their choice and can access their dividends.

Mines and Mining Development Minister Winston Chitando told The Sunday Mail that stakeholder consultations will be prioritised in crafting the policy.

“We would like to finalise the Chrome Development Policy by July so that it guides development of the chrome sector,” said Minister Chitando.

“Again, as part of that policy, we also would like to see capital coming in to assist the (local chrome) title holders to be able to produce.

“We are going to have a consultative workshop with stakeholders like Chrome Producers Association and Chamber of Mines, where we will discuss the framework (of the policy) and we will hear their views; then thereafter the process of formalising it will be put in place.

“The projections we spoke about will be met – the 950 000 tonnes per annum of ferrochrome – and that is threefold increase to current production.”

Minister Chitando said hosting the just-ended 35th edition of the International Chrome Development Association (ICDA) conference in Victoria Falls last week will help drive investor interest.

“We managed, through this conference, to put the Zimbabwean chrome industry on the international map.

“I am sure most of the attendees knew, prior to the conference that Zimbabwe has a significant stake or the second largest resource of chromium. . . but by coming here and us interacting with them and also seeing the investment opportunities that Zimbabwe offers, without doubt there will be increased inflows of investment into the sector.”

Going forward, he said, Zimbabwe will ensure active participation at future ICDA conferences as a way of ensuring continued interface with international stakeholders.

Ferrochrome production stood at around 350 000 tonnes last year._The Sunday Mail

Massive growth expected in chrome mining sector

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Massive growth expected in chrome mining sector

THE 35th International Chromium Development Association (ICDA) conference ended on a higher note here yesterday with Government optimistic of better prospects for the sector going forward.

Zimbabwe boasts of 12 percent of the world’s chrome ore deposits being second after South Africa but extraction has not been commensurate with the available resources.

The three-day conference, which was officially opened by President Mnangagwa, was an eye opener for the country as it seeks to entice more investors into the mining sector.

In an interview after the closing ceremony, Mines and Mining Development Minister Winston Chitando said the country’s mining sector will not be the same again.

“This is a historic conference and the Zimbabwe chrome mining industry will never be the same again after this. We’re looking at massive growth of up to 960 000 tonnes a year by 2022, which is a huge jump from last year’s figures of about 350 000 tonnes,” he said.

Minister Chitando said the conference, which was attended by more than 250 mining experts and potential investors from across the globe, had put the country’s industry in spotlight.

“Investors are excited,” said the minister who noted that Government will now start working towards growing the sector and has already lined up a mini-conference in September to deliberate on how new smart technology can be harnessed into mining.

“We now have smaller furnaces in place with capacity to process more fines. We need to give attention to technology so we deal with these fines, which make 40 percent of the deposits. We need to put effort on value addition because we have quality chrome ore and as such we compete favourably with other markets,” he said.

Zimasco general manager marketing and administration, Mrs Clara Sadomba who was representing the Chamber of Mines, said the country’s next step should be infrastructure development and capacitation of producers.

“The discourse at the conference was healthy for Zimbabwe’s chrome industry considering that we have the second largest reserves in the world yet production has not been matching. 

“It’s good that we are getting appreciation and now there is need for supporting infrastructure, significant exploration, beneficiation, introduction of smart technology, transport networks improvement and alternative cheaper energy sources,” she said.

Zimasco is the country’s major chrome producer alongside Afrochine Smelting with a combined capacity of 80 percent leaving the other 20 percent to small producers. 

Earlier, Ms Neusa Monjane Saranga from Port of Maputo told the delegates that plans were underway to expand the chrome terminal at the port in light of expanding chrome industry. 

Managing director of Steel and Metal Market Research Mr Markus Moll said there is profitability in the chrome value chain. _The Chronicle

Colliery FY loss shoots to $78million

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Colliery FY loss shoots to $78million

HWANGE Colliery Company Limited (HCCL)’s ability to continue operating as a going concern remains elusive after the ailing coal miner plunged deeper into a loss of $78,4 million for the year ended 31 December 2018 from a $43,8 million loss posted in the prior comparable period.

Although revenue increased by 27 percent to $69,1 million from $54 million in 2017 due to growth in sales volumes from 1,2 million tonnes to 1,5 million tonnes in 2018, the company’s overall performance was poor against the comparable period.

Its asset base also dropped to $158 milliom from $198 million as liabilities ran riot resulting in a negative equity position of $290 million compared to $211 million in 2017. 

“This is attributable to recurring losses, which eroded the capital and reserves”, management said in a statement accompanying the financial report for the period. 

The company’s performance for the period under review also ‘fell short of budgetary targets’ due to low production levels attributable to working capital constraints. 

In that regard, monthly production average halved to 150 000 tonnes compared to the budgeted monthly production of 300 000 tonnes. 

“As a result the company failed to meet the market demand,” company administrator, Mr Bekithemba Moyo, said. 

Total sales tonnage was down at 1,5 tonnes against a budget of 3,5 tonnes. According to the report, cost of sales increased by 36 percent in the year as a result of increased input costs driven by parallel market exchange rates that were being used by most suppliers to charge their products in RTGS dollar terms. 

Impairment of assets amounting to $27 million as well as subdued coal prices against increased input cost, also compounded the company’s woes. 

Despite acquiring new equipment under the $32 million deal a few years ago, the report indicates the company has been experiencing low machine availability as a result of technical challenges faced in operating the equipment.

Government placed HCCL under reconstruction late last year in terms of the Reconstruction of State-indebted Insolvent Companies Act (Chapter 24:27) as a way of rescuing the company from the doldrums, which has seen its liabilities outstripping assets, making the former giant miner technically insolvent. 

Mr Moyo hoped the reconstruction path was going to give a professional and fresh approach to “try and give the company a chance to overcome the bottleneck, which were centred on poor production and sales volumes”.

He said there was still hope for Hwange and announced a string of operational review strategies that are expected to yield the desired transformation. 

These include increasing production and sales, optimising underground mining operations, pursuing coke production, reducing costs as well as improving efficiencies and competitiveness. These are expected to result in a brighter outlook including increasing the volume of exports.

In November last year the Zimbabwe Stock Exchange (ZSE) suspended Hwange Colliery from the local bourse following its placement under administration. 

It said the suspension would be for the duration of the administration.

According to the Reconstruction Act, every disposition of the property, including rights of action, of the company and every transfer of shares or alteration in the status of its members, made after the commencement of the reconstruction, shall, unless the administrator otherwise orders, be void._The Chronicle

Zim targeting exponential growth in Chrome production

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Zim targeting exponential growth in Chrome production

Zimbabwe is targeting exponential growth in the production of ferrochrome and will leverage this on the International Chrome Development Association (ICDA) conference starting today until Thursday this week in Victoria Falls. President Mnangagwa is scheduled to officially open the prestigious conference, which brings together key global chrome ore and ferrochrome producers, customers, financiers and entities.

The coming of the conference to Zimbabwe is a culmination of an investor luring whirlwind by the new dispensation led by President Mnangagwa himself under the “Zimbabwe is open for business” mantra. Many key global economic players have fallen in love with President Mnangagwa’s  pro-business policies and the secure investment environment obtaining in the country.

Government has declared natural resources, mainly minerals, will play a major role towards economic turnaround as the country moves to achieve middle income status by 2030.

In a wide ranging interview with The Sunday Mail Business ahead of the conference, Mines and Mining Development Minister Winston Chitando, said the conference comes to Zimbabwe at the opportune time when Government is out to revamp the chrome sector.

“Zimbabwe had over the last few years been witnessing decreasing ferrochrome production,” said Minister Chitando. “While 2018 production of around 350 000 tonnes was significant for the country, new capacity  being commissioned and planned for commissioning within the year could see a 20 percent increase of ferrochrome production capacity to 418 000 tonnes in 2019.

“Most of the smelting technology in the country is old and there is need to invest in new technology, especially technology that can process fines. In the medium term, further expansions will see Zimbabwe ferrochrome capacity increase to at least 956 000 tonnes by 2022,” he said.

For this to be achieved, Minister Chitando, said Zimbabwe will make the most of hosting ICDA conference and place its chrome investment opportunities on a global pedestal. This, he said, will give the sector the much needed push to play a significant role towards the attainment of the ministry’s 2023 target by which Zimbabwe should generate at least US$12 billion in annual mineral exports up from US$3, 2 billion in 2018. Zimbabwe is endowed with over 40 minerals of which analysts are unanimous will provide quick start to the economy if they are beneficiated and value added before export.

“More than 200 international delegates from mining and related sectors will attend the conference which has been oversubscribed. The conference will highlight the importance of Zimbabwe in the chromium industry and will provide an opportunity to promote Zimbabwe’s rich mineral resources and the opportunity for development and investment in Zimbabwe’s mining sector,” he said.

Announcing the coming of the conference to Zimbabwe last month, ICDA president, Mr Phoevos Pouroulis, who is also a representative of Tharisa Minerals (Pty) Ltd at Karo Resources that is investing US$4, 2 billion in a platinum project in the country, said his organisation’s hope was that this will stimulate investment.

“Zimbabwe has numerous natural resources with huge potential particularly within the platinum group metals and chrome mining sector, which play a major role currently and future of this economy,” said Mr Pouroulis._The Sunday Mail

Miners in Congo face subcontracting limits under new rules

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Miners in Congo face subcontracting limits under new rules

Companies in the Democratic Republic of Congo will have to ensure subcontractors they hire are domestically owned under rules being implemented by the government.

The requirement adds to the raft of new measures mining companies have had to contend with over the past year, after the state in March 2018 raised taxes and other costs. Investors including Glencore Plc, Randgold Resources Ltd., China Molybdenum Co. and Ivanhoe Mines Ltd. operate in Congo, the world’s largest source of cobalt and a major producer of copper and other metals.

Congo’s subcontracting regulator, known as the ARSP, “will launch very soon a campaign to identify all companies that want to participate in subcontracting activities” before licensing them, according to a statement signed by Director-General Ahmed Kalej Nkand. All unauthorized companies “will be totally excluded from the market place.”

The reforms will require companies to verify that their existing subcontractors have made the necessary adjustments to their ownership structures, Vincent Rouget, senior Africa analyst at Control Risks, said in an emailed response to questions.  “The reforms are designed “to promote the emergence of the Congolese middle class and protect the national workforce,” — Kalej

“We expect inspections to start in the next few months,” he said. “Several provisions of the law are still ambiguous, and it is very possible companies could be found non-compliant and subject to fines despite their best efforts.”

Congo adopted a law in February 2017 that reserved the subcontracting market in all sectors of the economy for companies majority-owned by Congolese nationals and headquartered in the central African nation. The legislation hasn’t been implemented until now because its oversight body, the ARSP, wasn’t established until last May, and management not appointed until December.

The reforms are designed “to promote the emergence of the Congolese middle class and protect the national workforce,” Kalej, who headed Congo’s state-owned mining company Gecamines from 2010 to 2014, said in the statement dated April 26.

The ARSP will be part-financed by a 5% levy on the value of every subcontracting agreement, according to a decree signed by Prime Minister Bruno Tshibala last year. The fee is to be paid by the company commissioning the work, which can pass the cost on to the subcontractor, Kalej said by phone from Congo’s capital, Kinshasa.

The new mining code that Congo passed last year confirmed that subcontracting in the mining industry will be limited “to companies of which the majority of capital is held by Congolese.” The 2017 law permits companies to contract foreign-registered or foreign-owned local subcontactors when they can demonstrate “an unavailability or inaccessibility of expertise” to the ARSP, as long as the work doesn’t last longer than six months._Bloomberg News

Sibanye says platinum mine shaft shut until official probe

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Sibanye says platinum mine shaft shut until official probe

Sibanye Gold Ltd. was ordered to shut down the shaft at its Rustenburg platinum mine where 1,800 workers were trapped for as long as 10 hours on Tuesday after an accident with an underground transport system.

South Africa’s Department of Mineral Resources issued a so-called Section 54 notice, barring the company from resuming operations at Thembelani shaft until a government mines inspector is satisfied that it’s safe to do so, said James Wellsted, a spokesman for Sibanye.

“We will not be producing today and, depending on our engagement with the department, hopefully we will resume very soon,” Wellsted said. While there hasn’t been “significant damage” to the shaft’s underground hoist system, Sibanye must also get an independent expert to certify it’s safe to restart operations, he said.

Sibanye shares slumped as much as 7.4 percent to the lowest since Feb. 5, paring this year’s gain to 25 percent.

All 1,800 trapped Sibanye miners are rescued, government says.

The incident 1.5 kilometers (0.9 miles) underground at one of Rustenburg’s four shafts revived concerns about safety at Sibanye’s operations. Last year, there was a spike in fatal accidents at the company’s gold mines, some of the world’s deepest._Bloomberg News

Miners not guilty of soldiers’ murder charge

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Miners not guilty of soldiers’ murder charge

The two Bindura suspected illegal miners popularly known as “maShurugwi” who were recently arrested for allegedly killing and assaulting two members of the Army in a scuffle over girlfriends, heaved a sigh of relief after the charges were on Thursday withdrawn before plea at the Bindura Magistrates’ courts.

Alexio Gumbato (36) and Job Chitsvimbo (age not given) were released by magistrate Maria Musika after the State failed to link the two with the charges.

Charges against the duo were that on April 19, the pair had a misunderstanding with three soldiers at a bar in Chiwaridzo high–density suburb, Bindura, over girlfriends.

The soldiers, Shaw Tizora (33), Tawanda Garega (35) and Pumulani Khuumani (30), were part of a team that was taking part in rehearsals for Independence Day celebrations in Bindura; they were camped at Chipadze Secondary School.

Khuumani was headed for the bar in the company of female friends, Lesley Chitabura (25) and Nyasha Ngozo (19), both from Chipadze suburb, when a scuffle allegedly broke out.

Khuumani allegedly assaulted Chitabura, who screamed for help, attracting the attention of Gumbato and Chitsvimbo, who rushed to the scene armed with knives and attacked the
soldiers.

Tizora and Garega are said to have died from the injuries, while Khuumani was rushed to a nearby police station, where he filed a report, before being taken to Bindura Provincial Hospital. He was treated and discharged.

Tariro Janhi appeared for the State._NewsDay

Mine owner shot 4 times

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Mine owner shot 4 times

A MINER from Filabusi has been arrested for allegedly fatally shooting a mine owner four times following a dispute over a pool ball that went missing during a game.

Xolani Ncube (35) of Mlenja area allegedly shot Samuel Donga, who was the owner of Marvel Mine in Filabusi, three times in the chest and once on the arm with a Ross revolver.

Ncube fled from the scene after committing the crime but handed himself to the police after five days.

He was not asked to plead when he appeared briefly before Gwanda magistrate, Miss Lerato Nyathi facing a murder charge and was remanded in custody to May 16.

Prosecuting, Miss Glenda Nare said Ncube surrendered himself at the police station on Tuesday after he had been on the run for five days.

She said Ncube had an altercation with Donga’s employees after a black ball went missing during a pool game.

“On 24 April Ncube was playing a pool game at Marvel Compound with Donga’s employees when the black ball went missing and he accused them of stealing it which resulted in a misunderstanding,” she said.

“Donga later heard about the matter and went to Ncube’s home in a bid to resolve the dispute. Donga arrived at Ncube’s home and accused him of attacking his workers. This didn’t go down well with Ncube who drew a Ross revolver from his waist and shot Donga three times in the chest and once on the left arm. Donga died on the spot and his body was taken to Filabusi District Hospital Mortuary.” 

Miss Nare said Ncube fled from the scene and went to his rural home where he hid the firearm and proceeded to Gwanda. She said on Tuesday, Ncube surrendered himself at the Gwanda Urban Police Station CID department. She said he led police to his rural home in Filabusi where he had hidden the firearm and it was recovered._The Chronicle

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