Mining ZimbabweLatest Mining News, Policy and Industry Updates

South Africa’s power utility Eskom needs around 187 billion rand ($12.60 billion) to comply fully with existing legislation curbing harmful emissions, a government presentation to parliament showed on Wednesday.

Eskom, which uses mainly coal-fired power plants to generate electricity, was one of 37 top domestic polluters, including Sasol, granted a five-year reprieve by the government until 2020 to meet air emission standards.

The new minimum emissions standards for air quality laws in South Africa, which cover particulate, sulphur dioxide and nitrogen oxide emissions, came into effect on April 1, 2015.

“Complete compliance with the 2010 Minimum Emission Standard would require an estimated 187 billion rand,” the presentation by the Department of Public Enterprises said.

Africa’s biggest public utility supplies over 90% of South Africa’s electricity, relying largely on ageing, heavily polluting coal-fired power stations but does not generate enough cash to meet its debt servicing costs.

Project delays and cost overruns at Medupi and Kusile, two mega-coal plants currently being built by Eskom, largely contributed to Eskom’s debt ballooning to 440 billion rand.

“Given the current financial constraints, at this stage, Medupi will be prioritised to be retrofitted with Flue-Gas Desulphurisation (FGD technology),” the department said.

South Africa has said any new coal plants would need to have emission-reducing technology, such as FGD.

In September, Eskom said it might have to shut some plants if it fails to reduce emissions, raising the prospect of further power cuts in the county and also putting more pressure on the government which has had to bail out the debt-ridden company to keep it afloat.

Eskom has applied to the Department of Environmental Affairs for rolling postponements of its obligations under the legislation to meet the emissions and air standards.

Ageing plants and poor maintenance have triggered several power cuts throughout the year, putting pressure on key economic industries, such as mining, as the country skirts a recession.

The latest bout of nationwide blackouts come after repeated power cuts in February and March, which hit the economy and pushed the government to grant Eskom a $4 billion bailout on top of a $16 billion bailout spread over the next 10 years. – Reuters Africa

One of the artisanal miners reportedly wreaking havoc at Eureka Gold Mine in Guruve was last week shot on the leg after trying to attack security guards in a gold ore scuffle.

Chriswell Mushongahande (27) of Muroiwa village under Chief Chipuriro in Guruve is recovering at Guruve District Hospital after he was shot by a security guard Paradzai Nyamutsenga (51).

Police officer commanding Guruve district Robert Torevasei confirmed the incident.

“One of the artisanal miners was shot by guards after he tried to attack them using an iron bar. Last week, the police had to use tear smoke to disperse them as they ran amok,” Torevasei said.

He said illegal miners were slowly giving up on the mine after police intervention although the law enforcers were slowly moving away to focus on their core business.

“Illegal miners are now coming in small numbers since our intervention and most of the crushing machines were removed, but we are also slowly withdrawing our services because it is not our core business,” Torevasei added.

The mine is currently under care and maintenance, hence many illegal miners are flocking to the place, prospecting for gold.  Source: Newsday

Shots were fired yesterday at Jumbo, Metalon Mine which is now a hotspot for artisanal miners looking for a quick buck.

Our source said they were digging for gold and could not hide their happiness and some colleagues shouted they had stuck lots of gold. This attracted attention from an interested buyer who offered to buy from them.

In no time a Mercedes Benz pulled up on them started shooting and our source and his friends bolted. “Handizivi chakasara chichiitika but takamhanya” (I don’t know what happened after but we ran for it).

The place is a magnet for the criminal “Mashurugwi gangs” who masquerade as miners with the intention of robbing unsuspecting victims usually at machete point.

Former mine authorities and security are reportedly charging US$15 per head to allow the illegal gold miners into the mineshafts during the night.

lt is said they rake up to US$1 500 per night through the practice.

Mazowe Mine is one of the oldest mines in Zimbabwe, and exploration and development in this region dates back to 1890, with over 1.4 million ounces of gold produced to date. Mazowe Mine comprises two underground operations, Mazowe and the BSV sections. The mine has a total of 247 claims over 2,939 hectares of landholding. Ore is processed in a single plant which consists of conventional crushing and milling and a carbon-in-leach facility.

ZESA Holdings has disregarded an agreement with miners to ensure uninterrupted power supply, a situation which has cost the resources industry millions of dollars in potential lost output, Business Times can report.

ZESA imposed the worst power cuts in three years early this year following reduced output at its largest power plant, the Kariba South Power Station, due to dwindling water levels. The situation has been exacerbated by poor generation at ZESA’s ageing thermal power stations in Harare, Hwange, Bulawayo and Munyati.

Zimbabwe last experienced such serious blackouts in 2016 following a devastating drought. As part of diligence, the mining industry, which contributes about 15% to the country’s GDP and more than 60% of the foreign exchange earnings, signed an agreement with ZESA for uninterrupted electricity supply. Under the agreement, the miners pay for electricity in advance in US dollars, and in return, they expect to get dedicated power supply.

But ZESA has not been honouring its side of the agreement, and continue to load-shed the mining sector. This has angered the miners who say ZESA’s failure to honour the agreement will put the economy in peril. Miners are among the biggest consumers of electricity in the country and are already grappling with weak profits that could be compounded by the potential output loss due to power outages of up to 40%, according to the latest survey.

If ZESA’s continued power generation problems destabilise the mining industry, the economy will feel the pinch, especially if the power crisis forces the sector to shed jobs. The monetary authorities will also take a hit as mineral exports are one of the leading foreign currency earners for Zimbabwe.

In a survey conducted by consultants Albert Makochekanwa and Caren Pindiri, which was released last week, all mining houses indicated that despite paying for electricity in advance and in foreign currency under the agreement, ZESA has not been honouring the signed agreement, causing irreparable damage to the mining sector.

The consultants are Economics lecturers at the University of Zimbabwe. Almost all the miners said they were experiencing regular and prolonged power outages. Some had been cut off for up to three days a week, the survey showed.

“Almost 60% of respondents were facing power outages of up to 3 days a week, while 30% were facing between one and two days. About 10% were facing power outages of less than one day per week,” the survey said.

“The majority of respondents indicated they signed agreements with ZESA and were making advance payments in foreign currency for the supply of dedicated power. Almost all respondents indicated that the power outages have resulted in production stoppages and output losses of between 1% and 40%.

“About 80% of respondents also indicated that the revised tariff framework for the mining sector is high. Approximately 70% of respondents were of the view that the power situation would deteriorate in 2020 while 30% indicated that the power situation will remain the same.” Miners want ZESA to respect the signed ringfencing contract.

“Almost all respondents underscored the need for ZESA to honour and respect the contract signed with the mining houses and provide dedicated uninterrupted electricity as per the agreement,” the survey said.

Almost all mining companies also want to be allowed to import electricity directly for their consumption, according to the survey. Half of the miners have proposed a tariff between US$0.07 per kWh and US$0.09 per KWh, while 40% recommended a tariff between US$0.05 per KWh and US$0.07 per KWh. Approximately 10% recommended a tariff of between US$0.09 per KWh and US$0.10 per KWh.

Isaac Kwesu, the Chief Executive of the Chamber of Mines, said mining was a critical sector which should be spared the crippling blackouts. “Mining requires electricity for both operations 24/7 and the safety of workers. It is very costly to have production stoppages. The safety of workers also needs to be guaranteed,” Kwesu told Business Times.

Responding, Owen Mavengere, the retail manager of the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) said the power utility had prioritised the mining sector “because they have supported us to anchor electricity imports, which are very expensive. We are currently engaging stakeholders for further imports. Unfortunately, where we are coming from, we nearly collapsed, but we are now back on our feet as consumers are now paying the correct tariff,” Mavengere said.

“As far as the ring-fencing agreement is concerned, where miners have paid in advance, I will agree that we should give power to the miners 24/7. However, we have two components of imports, that is, firm where electricity is guaranteed and non-firm where it depends on availability. The firm component is the way to go. We need to correct that. To say we have reneged on the ringfencing agreement, no, we will honour that.”

Business confidence index in the mining sector now stands at +2.2 for 2020, falling from +8 in 2019. This means mining executives are slightly confident about their business in 2020. Statistics show that the 2020 index was weighed down by various variables such as access to capital, political and country risk, and economic prospects.

The mining industry is expected to record decline in output growth with the majority of respondents (80%) indicating that their output for 2019 will be less than 2018 by a range between 10% to 40% on the back of the above challenges. Gold miners expect a negative output change of between -5%, to -35%; platinum 0% to -7%; diamond -30% to -40%; chrome ore -10% to -20%; nickel -2% to -10%; and coal -10% to -40%.

Currently, most miners’ average capacity utilisation is at around 70%, compared to 75% this time last year. This is due to the power outages, inadequate foreign exchange allocations, capital shortages, high cost structure, and obsolete equipment. However, the platinum group metals (PGMs) continue to operate at 100% capacity utilisation.

Almost half of the miners projects to record marginal to significant profits in 2020, while 30% and 20% expect to post flat and a contraction in profitability respectively in 2020. At the moment, the mining industry has slightly above 35,000 formally registered employees, a figure which excludes small and artisanal miners and other unregistered mining employees.

About 60% of respondents indicated that they had lost some critical skills during 2019, citing erosion of incomes because of inflation as well as government policy that disallows payment of salaries in forex. About 60% of supplies and consumables were sourced off shore and 40% were locally procured. Of the 40% sourced locally, about 30% were manufactured in Zimbabwe_Business Times

Gold inched up on Wednesday after U.S.President Donald Trump threatened to raise tariffs on Chinese imports if no deal is reached with Beijing and as the U.S. Senate passed a bill backing human rights in Hong Kong.

Spot gold rose 0.1% to $1,473.98 per ounce by 0341 GMT. U.S. gold futures was flat at $1,474.40 per ounce.

The U.S. Senate also passed a second legislation to ban the export of certain munitions to Hong Kong police forces. China condemned the moves and said Washington should stop interfering.

Trump on Tuesday threatened an escalation of the U.S.-China trade spat that has damaged economic growth worldwide. “There are concerns that the latest bill passed in the U.S. in support of the Hong Kong protesters might derail the progress in the U.S.-China trade deal,” Ilya Spivak, a senior currency strategist at DailyFx said.

However, gains in gold are limited as investors are “not quite prepared to take a firm bet ahead of the U.S. Federal Reserve’s minutes, which will probably confirm that the Fed is on hold for now and that’s not good news for gold,” Spivak added.

Investors are awaiting minutes from the Fed’s October policy meeting, due at 1900 GMT, for further cues on the monetary policy outlook.

The U.S. central bank cut interest rates thrice this year to help sustain U.S. growth, but had signalled last month that there would be no further cuts unless the economy takes a turn for the worse.

Lower interest rates reduce the opportunity cost for holding the non-yielding bullion.

Asian shares moved lower on conflicting messages on the trade front, in contrast to the strong rallies seen recently in global equities markets. “The precious metal, though facing bearish pressures over a strong rally in the equities market, will remain vigorous over subdued global growth and geopolitical uncertainties in Q4,” Phillip Futures analyst Benjamin Lu said in a note.

In Hong Kong, the last band of anti-government protesters trapped inside a besieged Hong Kong university were weighing a narrowing range of options as police outside appeared ready to simply wait them out. Spot gold may rise into a range of $1,480-$1,485 per ounce, according to Reuters technical analyst Wang Tao. Elsewhere, silver was unchanged at $17.14 per ounce, while palladium fell 0.1% to $1,760.80 per ounce. Platinum was down 0.6% to $904.52 per ounce_Reuters

THE Zimbabwe Consolidated Diamond Company (ZCDC) recently fulfilled pledges made in 2016 to the Zimunya and Marange community of Manicaland to improve their area after it finally constructed two modern courts for traditional leaders in the area.

The 2019 construction of traditional court premises is in fulfilment of pledges made early on in 2016 by the company to improve the livelihoods of the local community and traditional leaders after it took over diamond mining operations there.

Seven companies, among them Marange Resources, Diamond Mining Company, Gyn Nyame Resources, Kusena Diamonds and Mbada Diamonds, who were licenced to mine alluvial diamonds in 2016, had failed to meet their pledges to develop the communities.

In 2016, these companies were collapsed and consolidated into State-owned ZCDC.

’The new state-of-the-art courts will now see traditional leaders moving from presiding over their cases under trees to the new courts with modern facilities,” Killian Ukama, ZCDC spokesperson, said at a recent ceremony to mark the handover of the modern courts.

“This social responsibility project has been on the cards for a long time, but I am happy that ZCDC has now delivered on its promise,” Ukama said.

“ZCDC will continue to work with traditional leaders to improve the lives of the communities, as stability and development in rural communities can bring about economic opportunities,” he added.

After diamonds were discovered in Marange communal lands in 2006, many people, especially those living in villages around Chiadzwa, expected their living standards to undergo positive transformation.

The diamond mining companies had promised them decent housing, employment and compensation for loss of quality livelihoods, but had until their disbandment failed to fulfil their undertakings_Zimmorning Post

Fuel prices marginally go up by an average 0.145 percent effective Monday, 18 November, pushed by a slight depreciation of the local currency, the energy regulator said on Sunday.

According to the Zimbabwe Energy Regulatory Authority (Zera) the price of petrol will go up by 30 cents to $17.07 while that of diesel increased by 21 cents to $17.74.

“Operators may, however, sell at below the cap depending on their trading advantages,” Zera said.

From August this year, Zera has been reviewing fuel prices weekly in tandem with the floating exchange rate and international price movements, much to the chagrin of motorists.

This was after the government stopped subsidising the price of fuel,  allowing sellers to buy foreign currency on the open market to import the commodity.

But in spite of the constant price reviews, the commodity has remained scarce, with winding queues a common feature at most fuel stations.

The government blames foreign currency shortages for the fuel shortages which have persisted for years. – New Ziana