Mining ZimbabweLatest Mining News, Policy and Industry Updates

The gold sub-sector lost 20 percent of potential output due to intermittent power supply during the course of the year despite mining companies making an advance payment to the Zimbabwe Electricity Supply Authority (ZESA) in foreign currency.

This came out In the State of the Mining Sector Survey 2019 released today.

Earlier in the year, Miners went into a contractual agreement with ZESA to secure constant power supply but for the power, utility has failed to meet its side of the bargain aecting gold production.

“All gold producer respondents indicated that the power outages resulted in output losses with the majority (70%) having lost more than 20% of potential output while the remainder (30%) lost between 10% and 20% of potential output,” the report reads.

It further states that all gold producer respondents (100%) indicated that they were facing regular and prolonged power outages with about 80% of the respondents indicating that they were facing power outages exceeding 6 hrs/ day, while 20% said they were facing power disruptions of 0 to 6 hrs/per day.

“All gold producer respondents indicated that they signed contracts with ZESA for dedicated power. All gold producer respondents also revealed that they were paying a revised tariff of USc9.86/ KWh in advance in foreign currency,” said the report.

Zimbabwe is targeting 40 tons output of the precious stone following a remarkable 33.2 tons delivery in 2018 which surpassed the 30 tons target.

However, officials have already conceded the 2019 target won’t be reachable as a cocktail of challenges include power shortages continue to dampen productivity.

“We have several issues like power outages and complaints from miners, especially small scale miners, that we never dealt with diligently and I think that contributed to the drastic fall in gold production,”

Deputy Minister of Mines and Mining Development Polite Kambamura was quoted this week. Zimbabwe has undergone serious electricity shortages since the beginning of the year owing to the drought that affected hydropower generation at Kariba dam.

This has led to 16-hour long power cuts across the country affecting the entire economy. Major gold producers are feeling the pinch with Rio Zim and Caledonia in their half-year output for 2019 shedding 8 percent and 3.2 percent of production respectively on account of energy constraints.

Meanwhile, Zimbabwe has set an ambitious target to produce 100 tons of gold annually in 2023_263 Chat

– Paramount Chief Marange has blasted the government-owned Zimbabwe Consolidated Diamond Company (ZCDC) of imposing corporate social responsibility programmes on the community who continue to live in abject poverty despite sitting on top of the precious stones.

Speaking to delegates at the annual all stakeholders Diamond Indaba held in Mutare yesterday, Chief Marange accused ZCDC of failing to provide tangible employment opportunities for locals as well as imposing corporate social responsibility programs on the community.

“As a community, we didn’t know about diamonds until they were found in our area but we are still living in poverty, we are suffering and we hope that the board will hear our pleas that we have continuously expressed.

“We have a hospital build as long back as 1940 and our expectation was that this would be upgraded because diamonds were found in our backyard, yet that clinic as we speak does not have toilets.

“We do not have access to clean water, we have no dams and boreholes, people are struggling to make ends meet yet diamonds are being extracted right under our nose by people employed from other areas yet our children are unemployed,” he said.

Manicaland Minister of State Dr. Ellen Gwaradzimba also acknowledged the concerns of Chief Marange, saying it was a paradox that villagers lived in squalid conditions in the midst of plenty.

“For some issues brought in by the community, I have had discussions with them on the issue of employment, young people are desperate for employment and we urge ZCDC to practice good recruitment practices.

“In this era of devolution, we are saying locals should benet not that we are excluding the nation but we expect local people to be employed for jobs that are not technical,” said Gwaradzimba.

Gwaradzimba urged ZCDC to address environmental legacy issues inherited from former mining
companies that were posing a threat to both humans and livestock.

“If communities are suffering and livestock is perishing due to effects of mercury and cyanide, and
water is contaminated in rivers by from mining activities without consummate benet, this shows a lack
of leadership and good governance,” said Gwaradzimba.

“ARDA Transau has been a thorny issue in my office people are threatening to come and do some press-ups at my offices and I think the model of relocation did not provide for the sustenance of those people,” she added_263 Chat

Security officials have raised alarm over an exponential increase in illegal panning activities in Chiadzwa diamond fields with more than 3000 panners arrested this year only.

Zimbabwe Consolidated Diamond Company (ZCDC) chief security over Ellias Mvere told delegates at the recently held Diamond Indaba that there has been a two hundred percent increase in the arrest of illegal panners.

Inversely while previous statistics showed that locals were thirty percent of arrested suspects, this has increased to about eighty percent of over three thousand panners arrested this year, said Commissioner Mhere.

“Illegal diamond panners commonly referred to as gwejas remain a cause for concern to the operations of the ZCDC company and continue being a threat to the national economy.

“In the last indaba, a total of 1 375 illegal miners had been arrested. Notably, only 30% of those arrests were of individuals from Manicaland.

“However, since then, the department has made a total of 3 259 arrests. Worryingly, only 21 percent
of the arrests were illegal panners from outside Manicaland.

“This represents an increase in illegal panner arrests from the Province, highlighting the need to further engage the local leadership so that cases of illegal panning can be eliminated,” said Mhere.

He added that the illegal miners, sponsored by illegal buyers, were using sophisticated syndicates of connivance and corruption with some inside security details to evade arrests, as he appealed for a collaborative effort with local leadership.

“The panners are operating from bases on the mountains and some are offered rented
accommodation by local villagers and shop owners.

“The intelligence we have suggest that the panners are being sponsored by illegal buyers and
syndicate managers. This highlights the need to further engage the local leadership so that cases of
illegal panning can be eliminated,” he said.

Minister of State for Manicaland Dr. Ellen Gwaradzimba said this was a reaction of the impoverished
state of affairs in the country calling for the formalization of illegal panners, as a sustainable solution to
empowering local communities.

Formalization of artisanal mining, if properly implemented, will ring-fence revenue from diamonds by
curbing illicit financial flows rampant in the diamond sector, says Zimbabwe Environmental Law
Association deputy director Shamiso Mtisi.

Mtisi said however warned that there should be a legal framework to guide formalization of artisanal
saying that a haphazard approach will foment chaos in the diamond sector.

He said to curb the scourge of artisanal mining ZCDC should follow Kimberly Process 2010 Joint Work
Plan guidelines which require governments or mining entities to fence o diamond mining areas.

“In terms of formalization of artisanal miners, the first thing is to develop a framework for
formalization and also a legal instrument for formalization and also a legal instrument just like they
have done in other jurisdictions.

“If you just open up the mines for artisanal miners without controlling them or organizing artisanal
miners, it will be creating chaos and will result in non-compliance of KP standards,” said Mtisi.

“One of the recommendations of the Kimberly Process in a joint work plan that was developed (2010)
was that all areas where there are diamonds should be fenced, but what we have is situation where
some areas are still open and there is no control there,” he added_263 Chat

 The United States is taking advantage of record-low prices of one of the world’s dirtiest fuels by buying record volumes, which it intends to upgrade into cleaner products before new shipping rules take effect, trading and analyst sources say.

US trade sources said it recently had become economical to ship fuel oil from countries such as Russia, boosting imports of the product into the United States.

This comes even as prices for high-sulphur fuel oil (HSFO) on the US Gulf Coast trend lower while demand for high-sulphur fuels sags globally.

Fuel oil in the region traded at $41,56 per barrel on November 6, a three-year seasonal low, data from S&P Global Platts shows.

Fuel oil prices in Europe have also fallen to record lows, which has helped make exports to the United States economical.

According to data from oil analytics firm Vortexa, US imports of fuel oil from Russia and former Soviet Union (FSU) countries surged to at least a multi-year high of 1,35 million tonnes in October, and they are expected to hold firm at similar levels in November.

“The broader rise in FSU-US flows since the beginning of this year has therefore helped to offset the impact of the collapse in Venezuelan fuel oil imports in the wake of US-led sanctions,” Vortexa said.

Vortexa separately noted that the United States had received fuel oil from Jordan at the end of October, with another tanker set to arrive around the end of November.

The route from Jordan to the United States is unusual, Vortexa said.

New regulations on marine fuel by the International Maritime Organisation that take effect on January 1 will restrict sulphur content in shipping fuels to a maximum 0, 5 percent, from 3,5 percent now.

Complex US refiners have long been expected to benefit from the new regulations because they have greater capability to break down cheaper, heavy crudes into higher-margin, compliant products.

They have vacuum distillation capacity to break down straight-run fuel oil, which comes directly from a crude unit, as well as coking capacity, which upgrades cracked fuel oil, a by-product from complex refining methods.

The increased imports may be related to US refiners looking to run fuel oil directly to their cokers as the price of high-sulphur fuel oil declines ahead of IMO 2020, said Sandy Fielden, energy analyst at financial services firm Morningstar.

“If fuel oil is a good deal cheaper than crude, you can run it direct to the coker to produce gasoline and diesel and increase refinery returns,” Fielden said.

“If it proves profitable then we should see more of it in the coming months as HSFO prices fall.” — Reuters

Diamond sector mining output for the 2020 period has been pegged at US$1 billion
buoyed by investments in exploration as well as joint venture agreements, officials in the diamond
industry have said.

Zimbabwe Consolidated Diamond Company (ZCDC) will spread its exploration footprint around
Zimbabwe by leveraging on joint venture opportunities, board chair Engineer Killian Ukama told
delegates at the recently held all stakeholders Diamond indaba.

Eng. Ukama said there was a massive interest in diamonds with at least 13 different producers
expressing interest to start exploration mining. Zimbabwe has signed a joint venture with Alarosa, the
world’s biggest producer of diamonds in carats.

“The Diamond Industry is expected to contribute $1 billion to the mining industry contribution target
of 12 billion by 2023 under the government’s Vision 2030.

“ZCDC is investing in exploration in partnership with other players in the diamond industry. We have
received at least 13 expressions of interest in joint ventures, to spread its footprint in the country
beyond Chiadzwa.

“It is hoped that such partnerships will yield positive results for the growth of the diamond industry with
the associated benefits such as increased revenue generation, employment creation, economic
growth, infrastructural development, and investments in downstream industries,” he said.

To achieve these lofty goals, Eng. Ukama called for a collaborative effort to get rid, in particular, of
negative perception dominated by what he termed a dual portrayal of the government-owned entity.

He called for unity of purpose to protect the diamond industry against an influx of negative reports
around ZCDC which have an adverse effect on the market of gems produced by the amalgamated
government concern.

“To fully unlock the value of diamonds it is critical that we jointly work towards building positive
perceptions of our diamond industry. The perception of our organisation remains one marred by
rumours, innuendo, untruths and an apparent lack of trust among stakeholders.

“As an industry which is driven by ‘the feel-good factor,’ this obtaining situation has serious
implications on the value of our diamonds. We need to unite in order to protect this asset,” said Eng.
Ukama.

Zimbabwe Environmental Law Association deputy director Shamiso Mtisi said the negative perception of
the diamond industry in Zimbabwe can be busted by embracing responsible mining, transparency in
disclosing revenue as well as upholding international benchmarks.

He said the government must assess, detect and address potential negative impacts of mining
operations across the supply chain, as well as adopting full disclosure practices detailing
disaggregated output.

Mtisi said in light of huge investment potential through joint ventures, the government must ensure due
diligence in assessing potential investors in the industry.

“ZCDC must clean its image through action and join other diamond industry players who are
promoting responsible mining practices.

“Responsible mining and sourcing has to be based on the need to manage social, environmental or
human rights related impacts of mining, including responding to community needs and national
development needs and growth.

“Rough diamonds may be over-taken by synthetic diamonds if we do not rebrand them as ethically
mined and mined from areas free of human rights abuses, environmental degradation and poor
labour standards, synthetics are being marketed as clean and not tainted by human rights violations,”
said Mtisi.

“Give a national breakdown of Production from Marange voluntarily, if you are quite people will
continue assuming the big guys are eating all the money from Marange, share disaggregated data of
revenues, contracts signed and use of resources,” concluded Mtisi_263 Chat

There was a near-death experience for illegal miners at Jumbo mine in Mazowe yesterday after a
gang of six machete-wielding thugs, known as Mashurugwi threatened to go on a rampage before
being whisked away by the police.

The police had to re gunshots as the gang fought violently to save their lives while the other miners
looked terrified.

The six, believed to be part of a terrorising gang of illegal miners in the gold-rich area, had “captured”
some open pits and illegally entered into the mine after threatening to kill other bewildered miners.
263Chat, which was at the scene when the incident unfolded, witnessed the melee as police struggled
to bring the situation to a halt.

One of the arresting police officers told this publication that the six were in the habit of confiscating
gold ore from other miners and forcibly invade their pits and in the event of refusal, they would
attack their victims with machetes and other sharp objects.

“We carried out an operation which nabbed six thugs who had gone underground unsanctioned.
They forced their way in and we got a tip-o so we waited for them to come out and we took them in,
“However, true to their violent nature, they resisted arrests and were becoming violent while the
angry mob was baying for their blood. We had to re warning shots to disperse the crowd otherwise
it would have been a lot worse,” said the other on condition of anonymity.

The group, which is part of a gang that is causing untold suffering and fear among the people in
Mazowe is said to be politically connected and they often boast that they can do whatever they want
as they will not be arrested.

One of the illegal miners in Mazowe told 263Chat that they live in fear of being attacked by the
Mashurugwi gang and were no longer able to move freely.

“Every night, they come and terrorize us, they tell us that they own these pits and their bosses
instruct them to do as they please. They carry machetes and sharp objects all the time and for us,
moving at night has become a nightmare because if they see you, they will attack you,” said the
miner, Munyaradzi Mandove.

Another source said the menacing gang resides in Bindura where they stay with sex workers in
taverns and terrorise unsuspecting residents in the high-density suburbs of the small mining town.
He said the gang is connected to police and they pay bribes in order to evade arrests in the event that
they are caught.

“We don’t know when they will pounce next, we live in fear and the police is not helping because they
aid these criminal activities,” said the source, identified as Uncle Diva.

During the recently held Mining Federation conference in Gweru this week, President Emmerson
Mnangagwa said he was alarmed when he read about the violence unleashed by the panners in the
media.

“We don’t want this (acts of violence), anyone found in possession of these dangerous weapons must
be arrested and sent to jail,” said Mnangagwa_263 Chat

Chinese firm Tsingshan Holdings Group’s plans to build a US$1 billion stainless steel plant in Mvuma remain firmly on course amid indications that Zimbabwe’s strategy to ramp up ferrochrome production is designed to also cater for the company’s feedstock requirements.

The company, one of the biggest producers of stainless steel products in the world, specialises in castings, steel bars, steel wires, steel plates and other products, which are mostly exported to South-East Asia.

Tsingshan signed a US$1 billion outline agreement with Government in July last year, and intends to build a two million tonne-per-annum stainless steel plant in Zimbabwe.

The firm will also mine a number of minerals needed for steel production.

The Chinese company recently expanded its plans for the Zimbabwe steel plant to include a power plant and lithium extraction.

Tsingshan is already undertaking resource evaluation for coal, chrome and nickel, which started in the second quarter of this year.

Tsingshan’s steel investment is part of the several multimillion-dollar deals that President Mnangagwa’s administration has inked since coming into power in 2017. The projects are at various levels of implementation.

Other projects include the US$4,2 billion platinum mining venture by Cypriot firm, Karo Resources, where exploration is already underway, with thousands of drills done on-site. An aero-magnetic survey was concluded earlier this year.

Zimbabwe’s foreign policy under President Mnangagwa has shifted from focusing on political issues to emphasis on economic ones.

The policy is designed in a way that aids Zimbabwe’s economic recovery, facilitates growth, creates employment and encourages a climate that is conducive to attracting investors into the country.

The government is working towards growing Zimbabwe’s economy to middle-income level by 2030, a vision espoused by President Mnangagwa. Initially, Tsingshan intended to produce chrome, nickel, iron and coal.

However, the fresh plans will see the company constructing a 600-megawatt power plant in two phases, as well as venture into lithium extraction.

Tsingshan’s investment is expected to create more than 2 000 jobs. It will promote technology transfer and generate billions from Zimbabwe’s export proceeds.

Mines and Mining Development Minister Winston Chitando recently said plans to increase ferrochrome production were on course.

“Government signed an agreement with Tsingshan for the production of carbon steel. The main ingredients that go into carbon steel are ferrochrome, coke and iron ore.

“For that stainless steel production to commence, we have to ramp up ferrochrome production, which is happening. That is why we have the 500 000 tonnes (target by 2023),” said Minister Chitando.

He said Tsingshan’s plans will also entail ramping up coke production, which is produced from coal, to facilitate the steel production.

Minister Chitando said Zimbabwe’s ferrochrome producers are currently churning out 500 000 annually.

The planned ferrochrome production is expected to contribute towards the Government’s vision of growing exports from the mining sector to US$12 billion by 2023.

Ferrochrome production, as a sub-sector, is anticipated to generate US$1 billion in export proceeds.

Tsingshan’s Afrochine has already embarked on expanding its furnace capacity to increase output.

Prior to signing the stainless steel agreement with the Government of Zimbabwe, Tsingshan already had a footprint in Zimbabwe. Its unit, Afrochine, extracts chrome near Selous.

Major ferrochrome producing entities in Zimbabwe include Gweru-based Jinan, Zimasco, and ZimAlloys, which is set to resume production after years of dormancy due to financial challenges.

Cumulatively, the companies produced 360 000 tonnes, but are expected to increase output to half a million by 2023, that is excluding the products that will come from Afrochine’s expansion plans.

Tsingshan’s Afrochine produced 19 677 tonnes in 2018 and is expected to increase production capacity to 500 000 tonnes by 2023.

The other key minerals that are expected to drive the vision for a U$12 billion mining industry include gold, diamond, coal, lithium.

“The US$12 billion will be achieved, no question about that. The US$12 billion is made up of a target of 100 tonnes from gold, which will generate US$4 billion; platinum, which will generate US$3 billion; while chrome, nickel and steel will bring in US$1 billion. Coal and hydro-carbons will generate another US$1 billion, while diamonds will bring in US$1 billion. Lithium will generate US$500 million while the other minerals will bring in US$1,5 billion,” Minister Chitando said_The Sunday Mail

Zimbabwe’s mining confidence plunged to a two-year low, undermined by concerns over power cuts, scarce foreign currency and policy uncertainty, a survey has revealed.

The Mining Business Confidence Index (MBCI), compiled by the Chamber of Mines (CoM), a lobby group that represents local miners, declined to 2,2 percent this year from 8 percent at the end of last year.

This is a further drop from 21,9 percent in 2017.

But despite a difficult 2019, the survey forecast a positive outlook in 2020, with executives expressing confidence that the sector will bounce from the doldrums.

Zimbabwe earns much of its foreign currency from the sector, accounting for 65 percent of export receipts, but is facing a myriad of challenges, including power cuts.

The State power utility, Zesa Holdings, is rationing electricity supplies for domestic and industrial consumers due to subdued production at its major plants.

Kariba Hydroelectric Power Station, the country’s largest plant, is churning out less than 10 percent of its capacity due to declining water levels at Lake Kariba, where Zambia also draws water for its power generation.

Recurring breakdowns at Hwange Thermal Power Station, due to dilapidated power infrastructure, was also affecting power production.

The CoM survey polled mine executives on their outlook on the economy, profitability, commodity prices, access to capital, the policy environment, title security, political risk and investment plans.

Government is seeking to achieve a US$12 billion mining industry by 2023, up from US$2,7 billion in 2017.

Presenting the findings of the survey in Harare on Thursday, University of Zimbabwe economics lecturer Professor Albert Makochekamwa said executives were confident of 2020’s investment plans. They are also confident that the sector will be able to hire new employees in the new year.

Attracting investment is one of the key cornerstones that will enable Government to revive the economy.

“Overall, mining executives are slightly more confident about mining business in 2020,” said Prof Makochekamwa.

“The majority of the respondents, 60 percent, are slightly more confident about profitability prospects of the mining industry in 2020. To note, the profitability index for 2020 is somewhat higher than that recorded for 2019.

“Survey findings also show that respondents are confident about the mining industry growth prospects for 2020, with 60 percent expecting marginal growth of the mining sector in 2020.

“Survey findings show that mining executives are slightly more confident about investment plans for 2020, with 60 percent of the respondents indicating that they are planning to inject fresh capital into their businesses in 2020,” said Prof Makochekamwa.

The survey also found out that 70 percent of respondents are optimistic about 2020’s commodity market.

The executives, on an 80 percent scale, are also confident about the current mining title regime, a sign that shows that Government’s efforts in instilling order in mining claim ownership is bearing fruit.

The survey also revealed that the mining industry capacity utilisation declined to around 70 percent in 2019, compared to 75 percent in 2018.

With the exception of Platinum Group Metals, all other key minerals recorded declines in average capacity utilisation. Executives blamed this development on acute power outages and inadequate foreign exchange allocations_The Sunday Mail

THREE armed robbers are on the run after they allegedly attacked a gold buyer from Matobo in the middle of the night and got away with US$2 000 and RTGS$2 000.

Matabeleland South provincial police spokesperson Chief Inspector Philisani Ndebele confirmed the incident which occurred on Monday at around 1am at Phakama Business Centre.

He said the suspects who were armed with a gun approached Mr Martin Wayne at his home at the business centre under the pretext of selling gold and when he refused to open the door, they slashed his car tyres thereby forcing him to confront them and they went on to rob him.

“I can confirm that we are investigating an armed robbery case which occurred at Phakama Business Centre in Matobo. The three suspects whose identity is not known approached Mr Martin Wayne at his home at around 1am, knocked on the door and indicated that they were selling gold.

“Mr Wayne refused to open for them and advised them to come back in the morning. Instead of leaving the suspects became violent and punctured the wheels of Mr Wayne’s two vehicles which were parked in the yard,’’ said Chief Insp Ndebele.

He said Mr Wayne went out to check and met the accused persons standing by the door and one was armed with a gun.

Chief Insp Ndebele said the suspects demanded cash from Mr Wayne and threatened to kill him if he did not comply. 

He said they started assaulting Mr Wayne until he gave them US$1 000 which he had in his pocket. Chief Insp Ndebele said one of the suspects entered the house and demanded cash from Mr Wayne’s wife and threatened to assault her if she did not comply. He said the suspect took US$1 000 and RTGS$2 000 from the wardrobe and joined his friends who were outside and they fled from the scene.

Chief Insp Ndebele said the matter was reported to the police who attended the scene and Mr Wayne was taken to Mater dei Hospital for treatment. He appealed to members of the public to desist from storing large sums of money in their homes.

“As police we continue to urge people to desist from storing large sums of money in their homes as that puts them at risk of being robbed. Especially businesspeople, when people know that they handle large sums of money which they store in their homes they become a target of robbers. People shouldn’t put their lives at risk. We also appeal to anyone with information on the identity of the suspects or their whereabouts to contact any nearest police station,’’ he said_The Sunday News