Mining ZimbabweLatest Mining News, Policy and Industry Updates

The Precious Stones Trade Act defines all rough gemstones as semi-precious except for rough emeralds and rough diamonds. There is potential in the production of coloured gemstones, its beneficiation and market demand.

By Maison Phiri, BSc Geology*MBA*GG, GD, CSTG

Amongst the coloured gemstones found in Zimbabwe, there is amethyst, citrine, aquamarine, tourmalines, chrysoberyl, euclase, apatite, ruby corundum, agates, fluorite, diopside, apatite, alexandrite, quartz, emerald and red garnets.

Coloured gemstones are dominantly mined by small scale artisanal miners who sell their produce as rough uncut stones, hence there is minimal cutting and polishing of coloured gemstones, let alone jewellery making. Local demand for coloured gemstone fine jewellery is extremely low because of the general disposable income levels, beliefs, awareness and cheap substitutes.

Gemstone mining is therefore threatened by the following factors;

Land tenure

Gemstone mining in Zimbabwe is almost 100% ASM (citizen mining), these are usually financed through their home earnings to run operations.

To this end there is no advancement in legal acquisition of the land they work on and most of them do not have proper mining claims. This adversely impacts on the seriousness of the operation, marketing of their produce and ultimately the environment rehabilitation issues.

Government Policy

It is noble to implement protective policies, but trade is trade and our policies in the gemstone value chain have to adapt to the demands in trade.

The suspicion is that, the government policies are too rigid on Gemstone mining and the subsequent value chain activities to the extent that they are the responsible factor in smuggling activities of the National gemstones.

It appears that we have pushed our own indigenous miners up against the wall with our current policies and so they fall prey to dealers and smugglers on a short-changed price.

Tanzania and Kenya have adopted the permit system to empower their own miners hence, policymakers should look into the issue of permits for our ASMs so that they are not deterred from joining the formal channels of the gemstone business.

There is a lot of bureaucracy in the administration of documents and change of policy. It is the duty of all Zimbabweans to do their part. The government should create a one-stop-shop for gemstone business paperwork and it should involve departments such as the MMMD, ZIMRA, RBZ, MMCZ and EMA.

Financing

The banking system has not been supportive to gemstone mining since most of these ASMs have no collateral and
they have no knowledge of gemstones or their potential value in our banking systems.

To this date, our banks are not taking minerals as bankable collateral or investment, but we have diamond, Gold and platinum. In India, one can walk in and exchange money for gold through their banks and they can keep their gold in that bank. Therefore, our banks require redress in the financing approach of gemstone mining.

Another avenue is to have our government vouching for all ASMs in the event that they may default in servicing loans. This is being done by the AfDB in most African Countries.

Social and environment issues

All activities should have minimal impact on society and the environment, this should be done to protect the
heritage of our future generation. However, and current gemstone mining has left a trail of pits, littering, and
erosion, siltation, and deforestation and biodiversity disturbances. The world has gone solid on green issues and
Humanitarian issues, Zimbabwe does not operate in isolation and so we have to be part of these world efforts.

This has been a serious issue in diamond mining and hence the advent of the KPCS, unfortunately, or fortunately, there is no “KPCS” as yet for coloured gemstones. Nevertheless, consumers are now requesting for the complete details of their jewellery including questions like where was the stone mined? Was it mined responsibly?

These are tell-tale signs that something is coming hence we should try and regularise on clean coloured gemstones.

Responsible mining ensures better marketing strategies of our gemstones, hence there is an urgent need of the
establishment of a responsible gemstones board that comprises of the government, industrial representatives along with the value chain and Civil Society organisations.

The development of markets

It’s been 39 Years since Zimbabwe has attained its independence and the nation has no gemstone fair, no gemstone market place, or a recognised entity that facilitates a meeting point to transact in gemstones. The private business community and the MMCZ should take note of the fact that there is need to hold a gemstone fair, agriculture has ZAS and therefore coloured Gemstones should have their own. This brings interest from investors abroad, creating a friendly environment in the formalisation of small scale gemstone mining.

Going forward, the nation should have time-framed goals on the following:

1.Quick and easy issuance of claims and permits. (MMMD)
2.Relaxation of restrictive regulations and promotion of open trade. (LEGISLATORS/MMMD/MMCZ/CID)
3.Marketing fairs, Gemstone forums, marketing platforms. (MMCZ/ Private organisations)
4.Responsible sourcing and transparency of the gemstone value chain (CSO/ All)
5. Workshops and gemology/ other technical education. (CSO/MMCZ/All)
6.Environmental protection awareness. (EMA)
7.Financing. (Banks/Zimbabwe Govt)

Have you heard of small scale mining in Zimbabwe? Well, it is a mining activity undertaken by individuals in their own personal accord.

These people are not employed by any company and they use their own resources to mine and for them to get the gold they have to usually mine it manually.

In fact, Zimbabwe has one of the largest known mineral deposits lying around in different parts of the country. It was ranked among the top ten countries with the largest mineral deposits and above that this has seen most people opting for small scale mining methods especially in chrome and gold.

Even though small scale mining in Zimbabwe is an activity that has been ongoing since the pre-colonial times, it was legalized in the 20th Century.

There was no rule as to how to start small scale mining until the process became legal. Legalization came with its own challenges, one of them being the issue on how to manage small scale mining now that it had the force of law.

According to the World Bank, Zimbabwean youth unemployment rate stands at about 48 per cent. Therefore, being a small scale miner offers much-needed employment opportunities to the youth as it employs almost double the number of miners employed by mainstream mining. It also slows down the rural to urban migration Small scale mining projects are mostly located in rural areas. Therefore, people who want to benefit from the trade will have to live or move into in the rural areas and this will help in the decongestion of major cities.

The money that is derived from small scale mining activities is mostly used in the country as opposed to the money made by multinational organizations who send the money to their country of origin.

In addition, this somehow controversial practise of artisanal and small-scale mining has managed to offer millions of marginalised people a sustainable livelihood despite serious knowledge gaps in the sector that hinder effective and inclusive policymaking.

It has also been proven that artisanal and small-scale mining employs 10 times more people than large-scale mining, providing jobs and income for 20-30 million of the world’s poorest people and supporting the livelihoods of five times that number.

In Zimbabwe, this industry plays a pivotal role in providing much-needed employment in an economy that is
currently battling massive job losses and a foreign currency squeeze.

The sector is partly driven by increasing global demand for minerals such as tin and tungsten together with chrome which are used widely in the construction of high-technology gadgets.

But the sector also involves poor and vulnerable people, including women and children, and is renowned for its harsh working conditions and severe pollution: it is the world’s second-biggest mercury polluter (mercury is used in small-scale mining for gold).

There is a perception that ASM is a “get-rich-quick” activity. This has misinformed legislation and extension
programs and led to the application of one-size-fits-all policies. However, people working in ASM are far from the same.

They range from those whose livelihoods rely on subsistence farming to skilled workers who migrated from urban areas in search of work. Despite its low productivity, ASM is an important source of minerals and metals. It accounts for about 20 per cent of the global gold supply, 80 per cent of the global sapphire supply and 20 per cent of the global diamond supply.

Small scale mining is also a major producer of minerals indispensable for manufacturing popular electronic products, such as laptops and phones. For example, 26 per cent of global tantalum production and 25 per cent of tin comes from small scale mining.

On the global front, small scale mining is recognized as a considerable source of revenue for millions of people in about 80 countries worldwide. Small scale mining takes place in diverse regions of the world, mostly in the global South—Sub-Saharan Africa, Asia, Oceania, Central and South America.

In conclusion, the term “small-scale” has been defined in various ways, often characterized in terms of the number of miners, the production capacity of a mine, the level of mechanization or size of capital investments.

This article first appeared in the Mining Zimbabwe magazine March 2019 issue

Precious metals were generally subdued in 2018 despite them being the top-grossing minerals in Zimbabwe mainly occasioned by weak safe-haven demand and a generally stronger dollar owing to interest rate hikes by the Federal Reserve during the year 2018.

These developments significantly raised the opportunity costs of holding precious metals such as gold and platinum. Furthermore, a general waning in global tensions diminished safe-haven demand for precious metals.

Zimbabwe remains one of the countries in Africa which are grossly endowed with natural resources specifically minerals. In a run down to the contribution of the minerals to the national GDP, platinum which mostly makes up the Great Dyke has proven to the most grossing mineral followed by gold and diamonds.

Ranked by value of output in 2018, Zimbabwe’s top 10 mineral commodities are as follows: platinum and other PGMs, gold, diamonds, nickel, coal and chromite.

In the year 2018, platinum consolidated its position as the leader of the group despite growing demand for chrome and lithium on the global market.

PLATINUM

Platinum output has been increasing since 2002 when Zimplats and Mimosa resumed operations and the subsequent entry of Unki in 2010 added further impetus for increased output.

The platinum sector is one of the few sectors that survived the hyper-inflation crisis where the rest of the mining sector recorded significant declines in output.

There are three existing players in the PGMs industry (Zimplats, Mimosa and Unki).

Potential new projects include ENRC, Ruschrome (Rostec) and Zimari Platinum. These projects are listed as Joint Venture projects under ZMDC.

PGMs producers share a vision of growing platinum production and sharing benefits with all stakeholders.

For every dollar created in the platinum industry, an estimated 73cents will be created in other sectors of the
economy arising from the multipliers.

The indirect multipliers include the indirect and induced impacts of the mining sector to the economy of the group despite growing demand for chrome and lithium on the global market.

PLATINUM

Platinum output has been increasing since 2002 when Zimplats and Mimosa resumed operations and the subsequent entry of Unki in 2010 added further impetus for increased output.

The platinum sector is one of the few sectors that survived the hyperinflation crisis where the rest of the mining sector recorded significant declines in output.

There are three existing players in the PGMs industry (Zimplats, Mimosa and Unki).

Potential new projects include ENRC, Ruschrome (Rostec) and Zimari Platinum. These projects are listed as Joint Venture projects under ZMDC.

PGMs producers share a vision of growing platinum production and sharing benefits with all stakeholders.

For every dollar created in the platinum industry an estimated 73cents will be created in other sectors of the economy arising from the multipliers. The indirect multipliers include the indirect and induced impacts of the mining sector to the economy.

The sector directly accounts for 3.5 per cent of GDP, which increases to 6.4 per cent with multiplier effects.

GOLD

The country is rich in gold, with an excess of 4 000 recorded gold deposits. In terms of gold productivity per square kilometre, the country is ranked above the traditional big producers including USA, Canada, Australia and Brazil.

The country has, however, remained largely underexplored, impacting negatively on grades due to limited new discoveries. (The last major gold discovery was Freda Rebecca in 1984 and started producing in 1988).

Despite attaining a peak of 27.1 tons in 1999, gold output levels progressively declined to reach a historic trough of 3.6tons in 2008, before recovering to back 20 tons by 2015.

The industry continues to operate below-installed capacity at around 77 per cent in 2015. Notwithstanding the lost decade +, the gold industry remains important in the socio-economic development of the country through its contribution to export earnings, government revenue and employment, among other contributions.

Gold remains ine of the largest contributor to mineral export earnings at around 40 per cent.

For every dollar created in the gold industry an estimated 79 cents will be created in other sectors of the economy
arising from the multipliers.

The indirect multipliers include the indirect and induced impacts of the mining sector to the economy [backward linkages ( for example transport, supplies, professional services) and forward linkages (for instance electricity generation).

In line with output growth, gold revenues will reach US$1.8 billion by 2020.

In 2018, gold deliveries to Fidelity Printers & Refiners reached 33.2 tonnes, a record high for the country, which also surpassed the year’s target of 30 tonnes.

DIAMONDS

The discovery of minerals such as diamonds in Chiadzwa and gold marked a new era in the economic revival and
resuscitation of Zimbabwe. Focus now shifted from an agricultural-based economy to a mineral resources dependent economy. Despite the scandals that continue to rock the diamond sector, it has proven to be one of the minerals which has to date kept the Zimbabwean economy ticking.

Over the last two decades, the Zimbabwe mining industry has become increasingly concentrated in terms of the number of mineral commodities produced and commodity distribution of mineral export.

In 2018, about six mineral commodities accounted for more than 96 per cent of the total value of minerals.

Asbestos, iron ore, tin and beryl, which drove export performance in the 1980s, are no longer being produced. Primary production of copper and cobalt has also ceased.

The high commodity concentration reflects the lack of a marginal commodity policy in Zimbabwe, which would
encourage the discovery, development and production of less popular mineral commodities including those that have never been mined in Zimbabwe.

The list of marginal commodities includes antimony, barytes, bauxite, iron pyrite, kyanite, talc, agate, amethyst and
tourmaline.

This article first appeared in the Mining Zimbabwe Magazine March 2019 Issue