Minister of Mines and Mining Development, Winston Chitando and Zimbabwe is Open for Business Forum (Pvt) Ltd, Represented by Nyaradzo Tongogara signed yesterday signed a MoU towards increased investment for the mining sector.
According to Mines and Mining Development Ministry, the MoU seeks to unlock the mineral value in Zimbabwe and increase revenue and foreign currency inflow as the Ministry works towards a US$12 Billion mining Industry by 2023.
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CALEDONIA Mining Corp. registered a strong showing in the first quarter of its 2020 financial year as operating and market circumstances combined favourably – perhaps for the first in a long time for the company.
The importation of more reliable and cheaper power had reduced the potential for operational disruptions at the firm’s Blanket mine which reported a one-fifth increase in gold production of 14,233 oz (Q1 2019: 11,948 oz).
Conditions also improved for Blanket’s employees with the adoption of interbank rate introduced by the Zimbabwean government early in 2019 which eases inflationary pressure on the country.
The market overlay was also supportive. The higher dollar gold price year-on-year contributed towards a 48% increase in gross revenue. The upshot was after lower all-in sustaining costs the company booked 57.3 cents in adjusted basic earnings per share compared to 44.2c/share in the first quarter of its 2019 financial year.
Net cash from operating activities was $10.7m, a two-thirds increase on the $6.3m a year ago taking net cash and cash equivalents to $13.8m as of end-March which compares to the $8.9m position as of December 31.
Caledonia announced a 7.5c/share dividend, a 9.1% increase on the previous dividend paid in October. Future dividend payments would depend on production – which the group did not think was especially vulnerable to the COVID-19 pandemic – and whether new investment opportunities turned up elsewhere in Zimbabwe. During the quarter, the firm bought an additional 15% shareholding in Blanket increasing its stake to 64%.
Steve Curtis, CEO of Blanket, said the future looked positive for the company, but plans to expand Blanket to 80,000 oz/year by means of the Central Shaft project had been complicated by travel and border restrictions brought on by COVID-19.
“Work on Central Shaft continued throughout the lockdowns; however, completion of the project requires specialised equipment and contractors to travel to Blanket from South Africa which under the restrictions is not currently possible,” said Curtis.
“This has not yet resulted in a significant delay to the project and we are receiving a high level of support from the Zimbabwe government to address these issues with the relevant authorities in South Africa,” he said.
GOLD production in the small-scale mining sector is projected to drop by 29% to 12 tonnes this year due to disruptions caused by COVID-19, an official has said.
The sector, which accounts for more than 60% of gold deliveries to Fidelity Printers and Refiners — an arm of the Reserve Bank of Zimbabwe — last year produced 17 tonnes of gold while major gold producing mines produced 10 tonnes.
In total, the country’s gold output fell 17% in 2019 to 27,66 tonnes, down from 2018’s 33,29 tonnes, according to the central bank, contributing about 37% to mineral exports, down from 43% recorded in the previous year.
The decline was attributable to electricity shortages, gold leakages and inadequate equipment for small-scale miners.
Zimbabwe Miners’ Federation (ZMF) chief executive officer Wellington Takavarasha told NewsDay Business that the miners were struggling to source critical consumables such as explosives due to the COVID-19-induced lockdown.
“We are not sure as of when the COVID-19 will end. At the moment, small-scale mining companies are operating but at low levels while on the other hand prices of gold are not good,” Takavarasha said.
“Some of the miners are not operating. Last year, small-scale miners managed to produce 17 tonnes of gold and in March this year, they produced only one tonne. From these statistics, we are likely to close the year at 11 or 12 tonnes, thereabout,” he said.
Takavarasha said miners were struggling to get consumables such as explosives due to restrictions effected by supply countries such as China and South Africa.
ZMF is an umbrella body for small-scale miners in the country.
Countries around the world have enforced lockdowns and travel restrictions to combat the spread of COVID-19, crippling economies in the process.
The disease has so far killed more than 285 000 people from 4,2 million confirmed cases with Zimbabwe recording four deaths from 36 confirmed cases.
Gold is one of Zimbabwe’s biggest foreign currency earners, having accounted for US$1,3 billion in annual forex receipts in 2019, translating close to a third of total export earnings.
Last year, President Emmerson Mnangagwa launched a strategic roadmap to propel the country’s mining sector to a US$12 billion industry by 2023.
However, the target is under threat due to COVID-19.
Under the mining roadmap, gold is expected to contribute US$4 billion, platinum US$3 billion, while chrome, iron, steel, diamonds and coal contribute US$1 billion.
Lithium is expected to contribute US$500 million and US$1,5 billion will come from other minerals._Newsday
Chegutu reported Covid-19 case #36 has been confirmed to be a small scale miner. Sources told Mining Zimbabwe the mine worker tested positive to Covid-19 after being tested at his workplace in the Pickstone area of Chegutu district.
The Ministry of Health and Child Care (MHCC) in its daily reports yesterday stated that a 30-year-old male resident of Chegutu district had no recent history of travel or any known contact with a person with respiratory symptoms. The man was referred for (Polymerase Chain Reaction) PCR testing after testing positive on a screening test conducted at his workplace using a Rapid Diagnostic Test (RDT).
Sources who are mine owners confirmed the aforementioned was a worker from one of the claims close to them. They reported the 30-year old tested positive and had to be referred to MHCC for more tests.
Zimbabwe Miners Federation President Ms Henrietta Rushwaya applauded efforts by mine owners for carrying out RDT tests on their workforce and advised miners to adhere to stipulated WHO guidelines.
“We encourage mine employers to take it upon themselves in ensuring that lockdown stipulated rules are adhered to and all WHO guidelines are followed. We are not out of the woods yet and we need to continue maintaining the social distance, wash hands with soap, wear masks and stay at our workplaces. We applaud the efforts made by fellow miners who are carrying out RDT tests at workplaces. We are in this together and we can only overcome this novel pandemic by adhering to regulations”.
MHCC reported that the man is asymptomatic, self-isolating at home with mild disease. Following the Covid-19 diagnosis, the Ministry said that it is now seized with contact tracing being assisted by the patient himself. The Ministry identified 7 of his contacts and these will be tested for Covid-19 in line with MHCC intensified surveillance strategy.
The Pickstone area is an active mining zone with one of Zimbabwe biggest gold producers Pickstone Peerless. The gold-rich area also has a lot of small-scale gold miners.
Zimbabwe like most countries globally is currently fighting to contain COVID-19 virus. To date, Zimbabwe has 36 confirmed cases, including nine recoveries and four deaths. The public is, therefore, being encouraged to adopt a number of behaviours that prevent contracting COVID-19.
• Avoid close contact with anyone with a cold or flu-like symptoms.
• When coughing and sneezing cover mouth and nose with tissue paper or flexed elbow- throw away the tissue immediately and wash hands
• Maintain a distance of at least a meter from the next person
• Use of Protective clothes at all times in workplaces.
We at Mining Zimbabwe wish each new day brings the miner closer to a full and speedy recovery. Get well soon Comrade!
A Vumbachikwe mine leader fell to his death at Vumbachikwe Mine this afternoon. Mr Mlazi the general manager confirmed the development but could not divulge more information.
“Yes it is true someone passed away but I cannot comment further please call tomorrow morning,” he said.
Reports coming through say the miner fell into ore pass and died.
More to follow…
This was heard by Bulawayo magistrate Shepherd Mjanja on Wednesday when Samson Ncube (29) appeared in his court charged with murder.
He was not asked to plead and was remanded in custody to May 20.
The court was told that Andrea Moyo (36), now deceased, and Ncube were employed at Central Sourdale Mine, Douglasdale in Bulawayo.
It is alleged that sometime in April this year, the two had a misunderstanding over sharing money, resulting in a fist-fight.
On May 3, Ncube and Andrea were in the company of five workmates and went to Siphilazima shops to convert US$20 into local currency so that they could share.
Andrea and Future Moyo later returned to the mining site and retired.
Ncube and the four co-workers followed the duo to the mining site. Ncube axed Andrea once on the head, killing him instantly. Future, who was sharing the cabin with the deceased reported the matter to the police, leading to Ncube’s arrest.
All employers of reopened businesses have 14 days from today to have themselves and their staff screened and tested for Covid-19, in terms of an amendment to the lockdown regulations gazetted yesterday that implement Tuesday’s Government policy of allowing testing to be postponed.
The Health Ministry will arrange the times and places for testing if contacted by employers.
The testing was postponed after most employers reported at the beginning of the week that there were problems in finding test kits or arranging testing, hence the more central role the Government is now taking to help arrange tests.
The amendment, in Statutory Instrument 102, the seventh amendment to the original lockdown regulations, and issued by Minister of Health and Child Care Obidiah Moyo, states that the tests must use the rapid results diagnostic test or any other test approved by the minister.
The regulations assume that businesses open from today, although the 14-day clock starts from a later re-opening date if a business can prove to an enforcement officer that they did open after today.
Employers may arrange, said the amendment, with enforcement officers for the testing to take place at an agreed time at the workplace or at any other agreed place, and to make these arrangements they may contact the Ministry of Health Call Centre or the Ministry of Information Call Centre;
The Health Minister can also order retesting done at intervals of not less than 30 days.
In the meantime, employers have to ensure that staff entering their premises have their hands sanitised and their temperature checked.
Evidence of tests has to be documented and produced on demand to enforcement officers. Businesses which fail to prove staff were tested within 14 days from today, or from the actual re-opening if this was later, can be closed and staff sent home within the hour. The business cannot then re-open until all staff deemed exempted from the lockdown have been tested and proof can be given.
Anyone hindering an enforcement officer, or any employer staying open after being ordered to close, is guilty of an offence and this can attract the standard lockdown breach penalties of a fine up to level 12, imprisonment up to a year, or both.
Former Kenyan Prime Minister Raila Odinga has said that the post-COVID-19 era should teach Africa to be innovative and business-minded that it won’t export raw minerals but processed ones.
By Rudairo Mapuranga
Speaking through his official Twitter handle the High Representative for Infrastructure Development in Africa said although on paper Africa is the richest continent, the reality is the saddest one which needs to be addressed.
“Africa is the richest continent on earth with regard to raw materials.
The paradox is that it is also the poorest in terms of the living conditions of its people.” He said.
The former Kenyan head of cabinet said that Africa instead of exporting raw minerals and importing processed ones, it should start to export minerals in their processed form.
“Instead of exporting iron ore, copper ore, bauxite, we must export steel products, copper cables, bars, sheets and aluminium.
Even gold, diamonds and crude oil should never leave Africa as raw materials for industry in other continents.
Africa has a historic opportunity, born out of historic tragedy, to put an end to our tradition of importing everything and producing nothing.” Odinga Said.
According to Odinga, the post-Corona Virus pandemic era should awaken Africa from being a consumer to a producer.
“The post-COVID-19 era creates opportunities for job creation in manufacturing, service sector including ICT, food production and infrastructure development.” He said.
As the calls for processing of raw materials get louder in 2015 a Congolese researcher Kambalé Mirembe made similar points during an address, also highlighting dependency on raw materials as a source of vulnerability. In his presentation, entitled “Does growth contribute to development?”, he pointed to the stable macro-economic situation in his home country, the Democratic Republic of Congo. The figures show that, despite an average growth rate of 5% over the last five years, predicted growth in the region of 8.4% in 2015, and an abundance of mining resources, inequality remains persistent in DRC.
As well as stressing the importance of local processing, Mirembe also called on all countries that receive an income from mining activities to come together to form a dedicated grouping similar to the Organization of Petroleum Exporting Countries (OPEC), with a view to influencing global prices and markets for these materials. “Why has nobody considered this before?” he asked.
The current Covid19-related economic challenges both locally and throughout Africa starkly highlight the need for pan-African companies and governments to support African supply chains, and in so doing, to boost economic activity on the continent.
This can be achieved by procuring the production of goods and services for infrastructure and industrial projects via the mechanism of ‘Team Africa’, which is a concept in which local suppliers and manufacturers collaboratively supply mining, industrial, power generation, and other sector projects.
“Covid-19 provides further impetus for Africa to support its own supply chains which will stimulate business in a myriad of upstream and downstream supply chains,” says Nicolette Skjoldhammer, Managing Director of South African steel fabricator and erector Betterect.
“While the new intra-African trade agreement provides opportunities and incentives for African stakeholders to procure from local businesses, the effects of the Covid-19 pandemic have shown industry just how dependent Africa has become on the Asian supply of goods and services, and prices of Asian consumables – to name but one supply chain item among many – are rising exponentially,” she advises.
Skjoldhammer says that one of how industrial supply chains on the continent can collaboratively drive growth is when companies focusing on the supply, processing, fabrication, and erection of steel structures join forces to deliver pan-African infrastructure projects in the mining, power generation, petrochemical, and other industries.
“These companies are able to form a cooperative and synergistic ‘Team Africa’, which supplies and processes the steel, or fabricates and installs the finished steel structures,” she explains.
“South Africa and its counterparts like Nigeria and Ghana certainly have the expertise to successfully undertake the design, fabrication, and installation of large steel structures throughout the continent. We have not only proven this over years of successfully participating in new and expansionary mining, power generation and other infrastructure projects; but also by supplying the core expertise in large structural steel projects under the auspices of European and Asian companies,” says Skjoldhammer.
“In fact, if you peel away the various levels of project supply, frequently you will find that South African and African expertise and capabilities remain at the core,” she asserts.
What is admittedly still standing in the way of opportunities for ‘Team Africa’ to grow its business on the continent is the perception that Asian goods and services are more cost-effective than those locally available; and the fact that project financing is often provided by Asian companies.
However, according to Skjoldhammer, the truth of the matter is that when potential clients and their estimators look at sourcing costs, they often do not consider the cost of a fully erected steel fabrication project, for example.
“Our experience has shown us that equipment fabricated in China is on average about 30% more expensive on landing in Africa, and approximately 20% more expensive at this point when it is imported from Turkey,” she comments.
The goal, says Skjoldhammer, is for African companies to be instrumental in growing the local and pan-African market for African companies –- and thereby set up a virtuous cycle of stimulated economic growth throughout the continent.
“To achieve this aim, companies, and stakeholders must identify their own ‘Team Africa’ to collaboratively participate in projects during the conceptual and design stages thereof. However, she points out, when it comes to the procurement criteria in the context of Team Africa, it is more a question of ‘dangling a carrot’ than ‘waving a stick’ as requirements to include local content often hamper the undertaking of new projects.
“The intra-African trade agreement is evidence that key stakeholders are already thinking and engaging along the lines of procurement in terms of a ‘Team Africa’ concept and mechanism. Furthermore, ACFTA’S current implementation means that pan-African countries will not pay tariffs when they trade with each other.”
There are still various logistical obstacles to working in African countries, such as moving equipment and fabricated structures across borders, dealing with customs ‘red tape’ and delays, and obtaining the necessary permits to work in-country.
However, the intra-African trade agreement is geared to address some of these challenges, such as improving inadequate transport infrastructure, and this could also help to get more projects off the ground.
Skjoldhammer explains: “Undertaking more projects on the continent will create and drive the core growth that in turn generates further growth. The use of the African supply chain for projects across Africa will open up an even deeper supply chain on the continent: from, for example, a local steel fabricator buying locally-rolled steel, to the support industries which specialise in galvanising, corrosion-protecting and painting that steel, and the range of businesses both up and downstream in the supply chain which supports the steel fabricator with telecommunications, IT, transport and a host of other items such as PPE (personal protective equipment) and stationery.”
She concedes that the continent as a whole also still faces challenges such as corruption and – in certain countries – political instability which may hinder efforts to bolster the local supply chain.
“However, for ‘Team Africa’ to thrive, only a few African countries need to support the ‘Team Africa’ supply chain. The rest will soon follow,” she asserts.
“The company that I lead recently formed a ‘Team Africa’ alliance with a steel supplier and processor, to supply a Zimbabwean gold mining operation with large steel tanks for a processing plant. This highly successful collaboration and synergistic project demonstrate that there is no limit to what a ‘Team Africa’ can do. The knowledge and experience in the industry is such that we can deliver any project throughout the continent.
African companies and countries must take the long-term view of ‘sowing the seeds for the future’: supporting one another, combining their resources, skills, and experience to realise this amazing and well-timed opportunity to transform our continent into an economic powerhouse,” Skjoldhammer concludes.
World over, Zimbabwe is regarded as one of the countries with rich mineral wealth that can sustain its economy into one of the finest.
Rudairo Mapuranga
Like many African countries, Zimbabwe is no exception in failing to attract Foreign Direct Invest (FDI) due to various factors. It is Mining Zimbabwe’s view that Zimbabwe can soar to greater heights by pushing its mining industry alone without inviting external firms as this is exporting the much-needed jobs locally.
Without a doubt, the economic resuscitation rests in the mining sector. The failure by the government to put to life the open for business mantra outside Zimbabwe is an open cheque that the push should be focused on local firms and individuals to invest in the mining sector.
Mining experts believe that it was not the government’s duty in the first place to go around looking for investors, they could have simply opened up policies so that businesses can invest.
According to renowned Geologist, Kennedy Mtetwa for the country to attract both local and foreign investors there are a lot of policies that need to be adjusted for the investor to see the value of his/her investment.
Mtetwa said, investors are not persuaded to invest but are attracted to invest because what’s important is for one to get profit after investing.
For the government to attract local investment in the mining sector monetary fiscal policies should be transparent to the miner.
“First no government goes to look for investors. Only our lot tried that and now they are surprised that they were not taken seriously. Investors simply read about the country’s mining policies and also the monetary and fiscal policies to decide whether to go and invest in a particular country. They don’t need a minister or president to tell
them to come and invest. Investors by their nature get into business to make money right across the globe. If as you say no investors came it’s up to the government to simply align our policies from mining to monetary to fiscal with those countries where these same investors go to invest” said Mtetwa.
This means that for the government to attract local investment, it has to relax issues to do with the monetary policy as a major issue. The current forex retention threshold of 50 percent for other minerals and 55 percent for gold is an elephant in the room. The retention threshold among other factors is believed to be the main push factor that led to the closure of African Chrome Fields and the partial closure of Metalon Gold mines. Zimbabwe at the moment is
producing zero consumables used in the mining industry thus, everything used should be imported yet the forex paid to the miners does not sustain its imports, this, therefore, means that companies would be operating at a loss.
The monetary policies again that are very tight when it comes to a company withdrawing money from the bank are also questionable and should be addressed for local firms to consider mining business.
The government in order to attract local investors should also not try to liquidate foreign currency in-corporate banks due to the instability of the local currency.
Some small scale or medium scale mining firms might want to save to buy expensive mining machines like dump trucks, liquidating of their forex reserves would put them out of business.
Takaedza said there is uncertainty concerning the administration, interpretation, or enforcement of existing regulations and uncertainty concerning environmental regulations, the stability of regulations, consistency and timeliness of regulatory process, regulations not based on science. Takaedza said, there are a lot of grey areas when it comes to the issue of Exclusive Prospecting Orders EPOs.
Application for an EPO takes up to 5 years before they are gazetted. This drains investment because the country is then left without clear geological data.
“At the international level, if a policy does not support exploration (e.g EPOs) then we cannot attract any foreign investment. We have EPOs that we applied for in 2008 and were gazetted in 2013 but they haven’t been issued. So imagine we are a local company being frustrated, what more of a foreign investor” said Takaedza.
There are a lot of inconsistencies when it comes to the enforcement of laws and regulations in the mining sector. There is what can be called the selective application of policy concerning environmental regulations for example most small scale miners are left to mine without complying with full regulations. However, those who would
want to invest as medium scale mining firms or large scale are forced to permit and comply even before they start any operation.
Regulatory duplication inconsistencies can also strain or frustrate investors from in the Mining sector, therefore, should be addressed. It is largely bureaucracy. The office of the District Administrator or local governance would come with their own regulations, while the Ministry of lands would also want to have a say, the Ministry of Agriculture also is sometimes very much involved in the mining business and the traditional leaders also would come with the same laws but different certificates. This can frustrate investors not to invest in the sector.
Investment avenues should be in a One-Stop-Shop to minimize overlaps, bureaucracy, permitting times, and corruption.
For example, RioZim had claims in Devuli which was later turned into the Save Valley Conservancy that keeps wild animals. The company is of late being denied entry and permission to work in the claims even though they are prior peggers and the Ministry of Mines has not intervened as of late.
Takaedza also said that the taxation regime in the country is also another course of concern when it comes to investing in the mining sector in Zimbabwe. The forex retention threshold is another form of taxation which is very painful.
“Our tax is a bit on the high side to attract investment. For example, gold which is partly paid in forex then rest in RTGS. That’s a heavy tax to attract investment. On top of that, there are other taxes in the industry. What we need is to increase the forex allocation to the investor. What we need are exemptions to attract investment” said Takaedza.
The government needs to look at how an investor would gain profit legally without going the way of smuggling minerals out of the country to survive in business. The government should consider the fact that all machinery and other consumables in the mining sector are imported that’s it is cheaper for a mining firm to buy them directly from South Africa than to buy loyally. This is, therefore, a clear indication that the government should relax its taxes, especially on forex retention in order to allow local firms to grow.
The quality of the geological database is also of importance for investors to have easy access to information. The country needs a proper cadastral system. At the click of a button, one should be able to get Geology and Tenure info. This will reduce corruption and the illegal disappearance of geological data or maps.
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