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Cabinet approves ZMDC unbundling

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Cabinet approves ZMDC unbundling

Cabinet on Tuesday approved the unbundling of state mining arm – the Zimbabwe Mining Development Corporation (ZMDC) into four mineral specific units as efforts to improve efficiency in State owned assets gather pace.

There had been concerns that the previous order was too bloated for one organisation and thus limiting the mining vehicle to effectively exert itself in the mining sector.

The mining sector has been identified as a key pillar towards the attainment of Vision 2030 as enunciated by President Mnangagwa by which Zimbabwe should be an upper middle income earning economy.

For this to be achieved, Mines and Mining Development Minister Winston Chitando, has said the mining sector should generate annual export earnings of US$12 billion by 2023 up from just over US$2 billion achieved in 2018. Speaking to journalists at Tuesday’s post-Cabinet meeting media briefing, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa, said Government had resolved to unbundle the state entity into four mineral specific units.

Said Minister Mutsvangwa; “That ZMDC be consolidated into specific mineral commodity groups namely; gold, precious metals and stones, base metals and energy and industrial minerals. “A specific subsidiary will be established for each of the mineral groups,” she said.

The state mining entity is a major player in the mining sector and has interests ranging from diamond mining, gold mining, emerald mining, platinum mining, copper mining, tin mining and several other precious stones. The state mining vehicle has huge targets among them growing its diamond production at its subsidiary, Zimbabwe Consolidated Diamond Company (ZCDC), from 2, 8 million carats mined out last year to at least 10 million carats annually by 2025.

The diamond miner has already planned to invest US$32 million in exploration projects to support a resource definition and expansion programme towards the 2025 target.

Government has also set ZMDC high targets in gold productions where it is expected to play a significant role towards the national output target of 100 tonnes per year by 2023 up from 33, 2 tonnes delivered to Fidelity Printers and Refiners (FPR) in 2018.

Business Times

Zim mining sector predicted to boom

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Zim mining sector predicted to boom

Zimbabwe is poised to become a mining giant in the Southern African region on the back of its vast mineral deposits and huge investments that favour the sector’s growth.

United Kingdom based research firm, Fitch Solutions, sees Zimbabwe’s mining sector booming, with gold and platinum posting positive growth driven by an anticipated increase in metal prices.

Zimbabwe has vast mineral deposits ranging from gold, platinum, diamonds, nickel to chrome. The country is home to the world’s second largest known platinum deposits after South Africa, while its gold reserves are one of the largest in Africa.

Diamond reserves are also estimated to be the second largest after Russia.

“Zimbabwe is emerging as an important mining centre within Southern Africa as foreign investment drives as seen by growth in mineral and metals production,” said Fitch in their recent publication on the country – Zimbabwe Country Risk Q1 2019.

“In terms of overall platinum output, Zimbabwe is challenging the world’s largest platinum producers, Russia and South Africa, while gold production is also set to ramp up over the medium term.

“Zimbabwe will experience a temporary boost in gold production in 2017-2019 as the impact, a gradual recovery in global gold prices and regulatory changes lead to an increase in activity by smaller mining firms. Zimbabwe’s platinum output will also grow at a steady pace, while that of its main competitors, South Africa and Russia, will stagnate over time, according to our mining team,” said Fitch.

Government is also working on improving the business environment to attract foreign direct investment in all sectors.

Various reforms are being undertaken.

Already, Government has amended the indigenisation laws, which will allow foreign investors to gain full ownership in all sectors save for platinum and diamond where Government will retain 51 percent stake.

Fitch sees this as a key launch-pad to boosting investment in the mining sector.

“The new government in Zimbabwe has shown signs of progress towards implementing investor – friendly structural reforms, which will encourage FDI and buttress economic growth over the long term.

“Zimbabwe is endowed with a wealth of natural resources and vast human capital compared to regional peers,” said the UK think-tank.

Mining plays a key role to the economy, and together with agriculture, the sectors anchor the Zimbabwean economy.

Last year, the mining sector contributed $2,3 billion in foreign currency earnings during the first nine months alone and was projected to reach $2,9 billion by year end, according to the 2019 National Budget.

It is estimated the sector provides slightly over 33 000 formal direct jobs with indirect jobs through upstream and downstream industries estimated at about 70 000 with approximately 500 000 artisanal and small scale miners. Over a million people are dependent on the sub-sector.

The projected boon in mining is also expected to see contribution towards the overall anticipated economic recovery, although this will not happen overnight.

Fitch also says, the country’s economic recovery will also be hinged on weather patterns that can sway it in either positive or negative direction.

Business Times

Thirteen bodies retrieved from Gloria coal mine on Friday

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Thirteen bodies retrieved from Gloria coal mine on Friday

Recovery operations of the remaining trapped bodies within the shaft at Gloria Coal Mine in Mpumalanga had to be halted on Friday due to severe smoke, the police have said.

It was reported that 13 bodies were retrieved, with more still underground. At least 22 men were trapped underground earlier this month after a gas explosion. Eighteen bodies have now been brought to the surface.

Work was hampered for the umpteenth time after one of the ventilation fans broke down, the Middelburg Observer reported earlier.

Proto teams were slowly making their way deeper into the shaft and came across seven bodies before they had to be pulled from the operation due to the breakdown. The mine had called upon technicians from Johannesburg to come and repair the extractor fan.

At least 13 bodies were retrieved on Friday and work will only continue again on Monday.

Mike Elliot, the communication liaison at the mine, informed Middelburg Observer that proto teams had been back at work since early on Thursday morning.

A distance of about 1.5km underground needs to be covered for the rescuers to reach the estimated location of the trapped bodies.

The teams experienced numerous challenges along the way when one of the walls in the shaft reflected on the blueprints was damaged by a blast, which caused a ventilation leak. Proto teams were doing repairs to the walls as they descended, by erecting “brattices” (a temporary wall made of tarpaulin) and fixing them to the wall over any holes caused by the blast.

The brattices are said to keep the fresh air from leaking out of the rescue routes.

The repairs were complete, and rescue teams were now moving to the estimated location at a fast pace.

Elliot went on to explain that people needed to understand that this was a time-consuming process.

“These guys that make up the proto teams are the best guys in the world and they also have the best equipment in the world.”

However, despite having state of the art equipment at their disposal, ventilation within the shaft is of utmost importance for the recovery, as the oxygen supply provided for each rescuer is to be reserved for emergency exits.

The Citizen

Teranga completes initial resource on Golden Hill

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Teranga completes initial resource on Golden Hill

After 18 months of drilling at its Golden Hill exploration project in southwestern Burkina Faso, Teranga Gold (TSX: TGZ; US-OTC: TGCDF) has completed a maiden resource estimate.

The plan is to build on the resource and advance the project through a preliminary economic assessment and into the feasibility stage of development.

Golden Hill contains 415,000 ounces of gold in 6.40 million indicated tonnes grading 2.02 grams gold per tonne and another 644,000 ounces of gold in 11.95 million inferred tonnes grading 1.68 grams gold per tonne.

Richard Young, Teranga Gold’s president and CEO, said he was “increasingly confident that Golden Hill will ultimately represent Teranga Gold’s third gold mine”The resource excluded historic drilling due to incomplete data and was based on nearly 650 drill holes totaling more than 70,000 metres distributed among nine prospects within a 7.5 km radius. At this stage, Teranga Gold says the configuration would lend itself to a multi-pit operation feeding into a central mill.

Teranga Gold said it was “pleased with the grades, strong continuity and widespread mineralization” at Golden Hill and noted that drilling has identified and partially outlined “numerous at-surface, oxide-hosted mineralized gold zones demonstrating excellent along trend and to-depth continuity.”

The gold zones extend to considerable depths below the oxide-hosted mineralization “transitioning into fresh brecciated and altered shear zones that remain open to further depth expansion.”

Richard Young, Teranga Gold’s president and CEO, said he was “increasingly confident that Golden Hill will ultimately represent Teranga Gold’s third gold mine.

The company is building its second gold mine, Wahgnion, in Burkina Faso.

Its first mine, Sabodala, in Senegal, has produced more than 1.6 million ounces of gold since Teranga Gold’s public offering in 2010.

The West Africa-focused company has exploration projects in Burkina Faso, Cote d’Ivoire and Senegal.

As of June 30, 2018, Teranga Gold had more than 4 million ounces of gold reserves.

 The Northern Miner

AMCU to extend Sibanye strike to other mines

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AMCU to extend Sibanye strike to other mines

Workers led by South Africa’s Association of Mineworkers and Construction Union (AMCU) plan to down tools at gold and platinum mines next week in support of colleagues at Sibanye-Stillwater who are striking over wages and job cuts.

AngloGold Ashanti, Harmony Gold, Anglo American Platinum Lonmin, Village Main Reef and DRDGold have received notices of the strike action, which is expected to begin on Feb. 28 and last until March 7, industry body, the Minerals Council, said on Thursday.

Sibanye-Stillwater last week said it could cut nearly 6,000 jobs at its gold mining operations, where AMCU has been on strike since mid-November over a wage dispute.

AMCU reached wage agreements with AngloGold, Harmony Gold and Village Main Reef last year.

South Africa is home to the world’s biggest platinum group metals deposits and accounts for just over 90 percent of global production.Sibanye’s full-year loss, hit by multiple disruptions at its South African gold operations and a deferred tax charge, was limited by the strong performance of the company’s U.S. and South African platinum group metals (PGM) operations

Lonmin’s South African listed shares fell 8.29 percent, while its London-listed shares slipped 6 percent by 1215 GMT after it said it had received a strike notice.

The miner said it was in the process of obtaining legal advice on AMCU’s notice.

Lonmin, which is in the process of being bought by Sibanye, has been crippled by soaring costs and subdued platinum prices.

The firm has been cutting spending to conserve cash and retain a positive cash balance, one of the conditions upon which Sibanye’s takeover is contingent.

“Any disruption is obviously bad news. The deal with Sibanye hasn’t been finalised yet and Sibanye wants Lonmin to be in a cash positive position so obviously if there is a prolonged strike this could affect things,” said Yuen Low, mining analyst at Shore Capital.

Workers led by the AMCU also plan to extend their strike at Sibanye-Stillwater’s gold shafts to its platinum mines next week, the company said on Thursday.

“We have strike plans. It’s not going to change our view,” said Sibanye chief executive Neal Froneman.

AMCU said in a strike notice document seen by Reuters that it intends to strike at Sibanye’s platinum operations for the duration of the protected strike at its gold mines and until the dispute is resolved.

Sibanye’s full-year loss, hit by multiple disruptions at its South African gold operations and a deferred tax charge, was limited by the strong performance of the company’s U.S. and South African platinum group metals (PGM) operations, the firm said during its results on Thursday.

Reuters

Newmont beats analysts’ estimates for quarterly profit

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Newmont beats analysts’ estimates for quarterly profit

Gold miner Newmont Mining Corp beat analysts’ estimates for quarterly profit on Thursday, boosted by higher gold production in its Colorado and Ghana mines and lower costs.

The company is set to overtake Barrick Gold Corp as the world’s largest gold producer following its acquisition of rival Goldcorp Inc, which is expected to close in the second quarter.

Newmont’s gold production rose nearly 8 percent to 1.44 million ounces in the fourth quarter ended Dec. 31, while its all-in sustaining costs to produce an ounce of gold fell to $835 from $910.

This helped cushion the impact of a 3 percent drop in average realized gold prices to $1,233 per ounce.

Newmont, which operates mines in the Americas, Africa and Australia, said copper production was largely flat at 11,000 tonnes.

The company’s net income attributable to shareholders was $2 million in the fourth quarter (https://reut.rs/2TVuMea) ended Dec. 31, compared with a loss of $542 million a year earlier.

Excluding one-time items, Newmont earned 40 cents per share, beating the average analyst estimate of 25 cents, according to IBES data from Refinitiv.

Reuters

Gold steady

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Gold steady

Gold was trading below the previous session’s 10-month peak yesterday as the dollar gained after minutes from the last US Federal Reserve meeting rekindled expectations of another rate hike this year. Investors were also keeping a close eye on talks to end a trade dispute between China and the United States.

Spot gold was steady at $1 338,76 per ounce as of 0753 GMT, having touched $1 346,73 per ounce in the previous session, its highest level since April 19. US gold futures were down 0,5 percent at $1 341,80 an ounce.

“There are both technical and fundamental reasons for this pull back in gold prices. It is under some technical selling pressure at the moment,” said Margaret Yang, market analyst with CMC Markets, Singapore.

“It was a clearly dovish statement by the Fed,” she said adding that the dollar rebounded after the minutes and gold traders are now taking profits.

The dollar index against a basket of six major currencies was up 0,2 percent.

The Fed, in the minutes of its latest meeting in January, said the US economy and its labour market remained strong, prompting some expectations of at least one more interest rate hike this year.

Higher interest rates make gold less attractive since it does not pay interest and costs to store and insure.

Spot gold may retrace into a range of $1 321-$1 331 per ounce and it seems to have peaked around a resistance at $1 351 per ounce, according to Reuters analyst Wang Tao.

Reuters.

ZETDC sues Metallon Gold

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ZETDC sues Metallon Gold

The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) has taken Metallon Gold Zimbabwe to court to compel the gold miner to settle a $9,3 million bill for power supplied to three of its mines.

The power utility filed summons at the High Court through its lawyers, Chihambakwe, Mutizwa and Partners claiming payment for electricity supplied to three mines, namely Mazowe, Shamva and How Mine.

Metallon is yet to respond to the lawsuit.

In its declaration filed alongside the summons, ZETDC said Metallon had failed to settle the debt despite several demands.

According to ZETDC, the duration of default by the gold mines spans from April 2016 to December 2018.

“The defendant (Metallon Gold Zimbabwe) is indebted to the plaintiff (ZETDC), during the period extending from April 2016 to December 17, 2018, in the sum of
$9 331 136,96, being charges in respect of power or electricity supplied by the plaintiff to the defendant at the latter’s special request and instance in terms of the running electricity supply contract between the two,” the power utility said.

“The said amount is for electricity supplied during the period extending from April 2016 to December 2018. The defendant has failed, neglected or refused to pay the above sum or amount despite demand.

“By reason of the said failure, neglect or refusal to pay the above sum or amount, the defendant is obliged to pay the said amount with interest thereon, at the prescribed rate which currently is 5% per annum.”

NewsDay

New monetary policy: The worst possible scenario to the miner

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New monetary policy: The worst possible scenario to the miner

The new monetary policy which was presented by the Reserve Bank of Zimbabwe governor Dr John Mangudya on Wednesday aimed at giving value to money through recognizing the fact that RTGS and the USD were not at par, may negatively lead the country to a genesis of serious economic meltdown that will haunt the miner instead of reviving them to their greatest potential.

Rudairo Dickson Mapuranga

Experts are of the view that the bank rate of RTGS dollar to the USD will never surpass that on the parallel market, again giving illegal money changers an edge when it comes to the handling of foreign currency than the banks.

“This means that the new policy instead of curbing black market forex trading have actually managed to strengthen it, the black market might again offer a handsome rate which is difficult to resist to those selling foreign currency and this might cause individuals to go and buy USD to the banks and Bureau de change and sell it to the black market, unless very serious measures have been put against illegal foreign currency dealers, the policy might turn to be just a piece of paper assigned to destroy the economy by giving individuals too much power indirectly” said one expert.

What does this mean?

Miners in particular gold artisanal miners have been receiving forex retention of 70 percent from Fidelity Printers and Refiners (FPR), however, with the new monetary policy outlines that these same miners will get forex retention of 55 percent which is a huge decrease considering the fact that small scale artisanal miners have been crying for 100 percent foreign currency.

However, the ability to retain mineral value remains the key point no matter what the market changes to, when one converts RTGS to USD the mineral will retain its value, under the old policy all minerals at 50 percent RTGS lost 39 percent of its value at 1:1 making it not feasible to mine, under the new policy the market rate might ensure the minerals will retain their value in equivalent to USD, on the other hand, the scarcity of the USD and forex might also prove be a stubborn point towards feasibility and equal value.

Also according to some miners, the idea that small scale artisanal miners will receive 55 percent retention might be swept under the carpet considering the idea that these miners have been receiving 70 percent from FPR when in actual fact large scale gold miners were getting 55 percent retention, at a window of more than 30 days of which artisanal miners would receive their money instantly, therefore in reality artisanal gold miners might find themselves in a comfortable situation than the rest of miners.

 

Miners were robbed?

Miners were receiving up to 70 percent USD retention and another 30 percent in RTGS which was pegged at 1:1 with the USD of which in actual fact RGTS and USD were trading differently on the market, which means miners were being robbed of their hard earned money through the 30 percent RTGS.

Reminiscence in policy

In April 2008 the then RBZ Governor Dr Gideon Gono issued a policy that is similar to this new monitory policy where banks and other legalized individuals were the only ones permitted to buy or sell foreign currency in an effort to stabilize the dollar, however, the policy failed to meet expectations, the country experienced a very high inflation, paper money was printed up to 100 Trillion, illegal forex dealers gained ground and became powerful until the Zimbabwean dollar was scrapped in 2009.

 

Mining firms operating in Sub-Sahari Africa urged to invest in renewable energy

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Mining firms operating in Sub-Sahari Africa urged to invest in renewable energy

A report published by Fitch Solutions states that due to the prevalence of off-grid remote mineral deposits in Sub-Saharan Africa and the fact that traditional grid-power tends to be unreliable in those mines, mining companies operating in the region should invest in renewable energy.

According to the market research firm, off-grid mines could benefit from reducing their dependency on diesel while taking advantage of the favourable climate conditions in the area.

“In SSA, the remote location of many important mineral deposits in combination with the underdeveloped state of power and transport infrastructure means that there are a large number of mines that are not connected to national or regional electrical grids. As a result, many of these mining operations are highly dependent on diesel-generated power, which is expensive to transport and subject to significant volatility in terms of pricing,” the report reads.

Fitch’s own forecast predicts global diesel prices to average $96.2/bbl by 2022, up from $89.6/bbl this year.

In the analyst’s view, miners’ dependency on the fossil fuel would be significantly reduced if they adopted renewable power, something that a few companies such as Newmont, IAMGOLD, and B2Gold, who are operating in remote locations in Sub-Saharan Africa and have invested in solar power, are already experiencing.

“In all cases these projects are hybrid in nature, meaning they combine solar and/or wind power, and in many instances energy storage, with diesel or HFO (heavy fuel oil) through microgrids that are not connected to the state-grid. Decentralised power generation in the form of hybrid microgrids has advantages beyond price, allowing miners not only to reduce their exposure to expensive fossil fuels but also make use of them as back-up power when solar or wind power is unavailable,” the report states.

Fitch’s experts also suggest that grid-connected mines would also benefit from incorporating renewables to their power mix, as they can play a role as potential remedies to the challenges associated with the unreliability of conventional grid power across the region, where power outages and exorbitant electricity prices are commonplace.

“Key mining countries that are highly dependent on hydropower, such as Zambia, the DRC or Namibia are prime examples of markets where grid-connected mines can benefit from adopting renewables. In Zambia for example, severe drought over 2016/17 highlighted the risks associated with the country’s over-dependence on hydro-power, as it resulted in a tariff dispute between the government and the country’s major copper miners,” the market researcher exemplifies.

Poor corporate governance and financial management of the domestic power sectors in countries where miners operate are also highlighted as major risks that should lead companies to avoid relying on their grids.

From a more positive point of view, Fitch says that favourable climate conditions in Sub-Saharan Africa should push more miners towards renewables. “Africa receives more hours of sunshine during the course of a year than any other continent on earth, meaning solar will remain the renewable power of choice for miners looking to reduce their exposure to fossil fuels,” the firm’s analysis explains.

Mining.com

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