Home Blog Page 668

Zim to depart from its nationalistic approach in Diamond mining: Charamba

TEPE
-
0
Zim to depart from its nationalistic approach in Diamond mining: Charamba

Zimbabwe had to depart from its “nationalistic approach” to diamond mining as the new dimension of mining, requires heavy financial capital, advanced technology and expertise that the country does not currently have, according to Deputy Chief Secretary in the Office of the President and Cabinet George Charamba.

Charamba, who is also presidential spokesperson, said this in an interview with Capitalk FM earlier this week.

He revealed that the alluvial diamonds in the Chiadzwa area are almost depleting, hence the need to change dimension and start focusing on conglomerates and kimberlites, working in partnership with Russian mining giant, Alrosa Diamond Company.

“As a matter of fact we are almost close to exhausting our alluvial diamond deposits, which means we are now going into a new dimension of diamond mining in this country.

“There is what we call the conglomerate diamond mining where we are literally crushing big boulders of rock to access the gems that are embedded inside, and the second dimension which has to do with kimberlites, these are pipes and working on conglomerates and kimberlites require lots of capital, lots of expertise, capital both in terms of finance and in terms of technology,” Charamba said.

Shedding more light on President Mnangagwa’s recent trip to Russia, Charamba said these development culminated in a deal that will see one of the world’s top diamond miners, Alrosa returning to Zimbabwe.

Charamba said after Government consolidated the diamond mining sector, through the establishment of Zimbabwe Consolidated Diamond Company (ZCDC), there were basic facts that had to be confronted, one of which was the realisation that the country did not have the financial capacity and technology to go it alone.

“The second area of interest from our point of view had to do with diamonds,” Charamba said.

“You would be aware that the Russians were involved in the diamond exploitation in the country; around the Chimanimani area. When we consolidated our diamond industry, we then took a decision to, as it were, to localise mining activity around the area, and that was in respect of the alluvial diamonds and that was how ZCDC came about.

“But after we developed a new diamond policy, we then came up against very basic facts, which we must confront as a country, that yes, we might want to be nationalistic about it and think that diamonds are a strategic mineral that must be preserve of Government, there are certain inputs we require, inputs of by way of financial capital, by way of technology, by way of even just expertise which compel us to go into partnerships with other nations,” said Charamba.

He said this was the reason why the President saw it fit to go to Russia, the “world leader in terms of diamonds development sector.”

Charamba also highlighted Government’s expectations from Alrosa, “which is going to come into the country and partner with public enterprises for the exploitation of diamonds.”

“So, Alrosa is coming as partner for the enterprise and also as a prospector so that we begin to understand what it is that we are worth as a people. We are aware that there are quite a number of sub-soil assets of a diamond nature strewn over the country, the only matter being that we have not prospected Zimbabwe, she is a virgin girl, she is not at all discovered in terms of how much her value is in sub-soil terms,” he elaborated.

He said Zimbabwe was highly mineralised with known deposits that were upward of 61.

In the diamond sector, he said two major diamond discovery would be announced soon.

“I might as well appreciate the fact that in the next months or so we should be announcing two major diamond finds, green fields in fact, one in the general area of Masvingo and the other close to Harare near Chihota area, those are real value deposits that we have to look at.”

Zimbabwe exported diamonds worth $89,9 million in the 11 month to December 2018, making it one of the top export earner in the country, but Charamba believes the country should be earning more from the resource.

“If you are dealing in rough diamonds (value), you are probably looking at $24 billion only, if you try and cut and polish those diamonds you double your amount to $42 billion there about, then if you target your beautiful finger by way of rings and all those value added things the figure sky rockets to about $96 billion,” said Charamba.

“So for as long as we remain stuck at the initial stage; in other words remain at Chiadzwa and not in the factory, we are actually confining ourselves to the $24 billion value,” he said.

The Zimbabwe National Diamond Policy that was approved by Cabinet on December 4 last year, says ZCDC, Murowa Diamonds and recently Alrosa and Anjin Investments will  be permitted to undertake diamond exploration and mining in the country.

Anjin previously mined diamonds in the country until late in 2015 when Government did not renew operating licences of diamond miners such as DMC, Kusena, Mbada Diamonds, Gye Nyame and Marange Resources.

Business Weekly

Zimplats reports 10% increase in revenue

TEPE
-
0
Zimplats reports 10% increase in revenue

Zimbabwe’s largest platinum producer, Zimplats, reported a 10% increase in revenue to $152,9 million in the quarter ended December 30 buoyed by firm metal prices on the international market. 

During the quarter under review, gross revenue per 4E ounce increased by 19% to $1,173; up from $985 in the previous quarter. 

The favourable metal prices were, however, partly offset by a 7% reduction in the volume of 4E metal sold. 4E metal sales in the quarter amounted to 130 432 ounces. 

Overall metal production decreased by 5% from the previous quarter, in line with the 5% decrease in the volume of concentrates smelted, which resulted from a routine seven-day furnace shutdown.

“Ore mined increased by 3% from the previous quarter, mainly due to productivity improvement initiatives implemented during the quarter. But production for the quarter decreased by 5% from the same period last year due to the closure of the South Pit Mine in March 2018,” the company said in a statement.

“Tonnes milled decreased by 3% from the previous quarter due to a lower milling rate and a decrease in the running time of the mills due to the planned SMC concentrator mill reline shutdown.”

Net operating costs decreased by 14% to $82,6 million compared to the previous quarter owing to the decrease in sales volumes and an increase in export incentives.

Royalty and commission expenses increased by 13% from the previous quarter due to the increase in sales revenue (driven mainly by palladium and gold) resulting in an increase in total direct and indirect tax payments to the government which increased to $16 million from the $13 million reported in the previous quarter.

The company reported that the redevelopment of Bimha Mine remains on schedule.

“Installation of the north underground crusher and the ore-conveyancing system were completed during the quarter. The south underground crusher and ore-conveyancing system are scheduled for commissioning in August 2019. A total of $76 million had been spent as at December 31, 2018, against a total project budget of $101 million,” Zimplats added.

The development of Mupani Mine, which will replace Ngwarati and Rukodzi mines, is ahead of schedule, targeting ore contact by August 2019 and full production in August 2025. A total of $51 million 
had been spent as at December 31, 2018 against a total project budget of $264 million.

NewsDay

Need for mining players to merge forces

TEPE
-
0
Need for mining players to merge forces

Mining is one of Zimbabwe’s largest foreign currency earners, contributing more than 60% of the forex earnings. It also constitutes about 15% of gross domestic product (GDP), between 8 to 12% of government revenue and more than 500 000 formal jobs, according government reports.

But sadly, the sector is currently facing a plethora of challenges which have seen some mining companies downsizing or shutting down altogether. For those mines to be revived there is need for collaboration between mining players themselves.

For instance, those that are currently afloat like Caledonia Mining Corporation, Zimplats, Mimosa, Africa Chrome Fields, Zimasco, Asa Resource Plc, Makomo Resources, Zimbabwe Consolidated Diamond Mining Company among others, could join forces and revive dormant mines.

That could be done through partnerships or mergers and acquisitions. When mergers or acquisitions occur, they create some of the largest mining powerhouses in the world and can have an everlasting impact on the industry.

Examples of mergers and acquisitions

The most recent of the biggest mining mergers, according to Mining Technology, is the Canada-based Barrick Gold which announced its acquisition of Randgold Resources for around $18 billion on 24 September 2018. The merger will create the world’s biggest gold mining company, with a combined production capacity of 6.6 million ounces of gold per year.

On May 2, 2013, multinational mining company Glencore completed the acquisition of Anglo-Swiss mining company Xstrata, in a deal worth around $90billion. The merger created one of the world’s largest natural resources conglomerates, with a combined workforce of 190,000 people across 50 nations, and a portfolio of 90 commodities, including copper, barley, oil, and vanadium, according to Mining Technology.

Anglo-Australian mining giant Rio Tinto in July 2007 acquired Alcan in a deal worth $38.1billion, making it the world’s largest producer of aluminium and bauxite at the time. Two of China’s largest state-owned enterprises, Shenhua Group and the China Guodian Corporation, according to media reports, completed a merger on 20 November 2017, valued at almost $273 billion. These are some of the mergers and acquisitions (M&A) that have taken place around the world and Zimbabwe can do it too.

The mining sector is now ripe for M&A, given the amount of pressure it has been under.

Struggling mines needing revival

Some of the struggling mining companies include Metallon Gold Corporation which owns How Mine, Shamva, Mazowe and and Redwing mines. Some include Sabi Gold Mine, Jena Gold Mines, Elvington Gold Mine, Shabanie Mine, Kamativi Tine Mines, Bikita Mine, Sandawana Mine, Lynx Mine, R.H.A. Tungsten Mine among others.

Metallon Gold Corporation used to produce about 50 percent of Zimbabwe’s gold output but is currently struggling

Last year in September, the mining concern rolled out a massive retrenchment exercise at its four mines in Zimbabwe namely How Mine, Shamva, Mazowe and Redwing in a bid to arrest mounting operational costs.

The miner reportedly owes workers salary arrears running into millions of dollars, accumulated over the past few years.

Sabi Gold Mine was placed under judicial management, following the suspension of operations in 2014 and it still faces debt problems and also needs a massive cash injection to ramp up operations.

The mine is located in Zvishavane in the Midlands and it operates one rectangular double compartment shaft reaching down to 15 metres below a 12 level elevation.

There is also Jena Gold Mines located in Silobela, 60 km outside Kwekwe, central Zimbabwe. It operates a multi shaft system and has a capacity to treat 450 tons of ore per day.

Elvington Gold Mine which is about 100 km west of the capital Harare suspended operations in 2003 due to the collapse of one of its main shafts. The mine is on care and maintenance. Elvington used to produce 45kgs of gold per month before the shaft incident.

Shabanie Mine, located in Zvishavane in the Midlands province, used to be one of the biggest employers with over 2 000 workers, but was shut down closed in 2004, due to low demand of white asbestos.

Kamativi Tine Mines, a wholly owned subsidiary of Zimbabwe Mining Development Corporation, closed operations in 1994 after 58 years of operation. The closure of the mine was prompted by the fall of the price of tin, the state miner has said. In its heyday, it produced tin and other by-products including tantalite niobium and lithium minerals. Kamativi mine is having renewed interest because of the firming tin prices and the large suite of minerals associated with tin.

Bikita Mine is located in southern Zimbabwe in province, about 80 km east of Masvingo town. It is one of the largest lithium mines in Zimbabwe. It is home to reserves amounting to 10.8 million tons of lithium ore grading 1.4% lithium thus resulting in 0.15 million tons of lithium.

Sanyati Copper Mine, located in Kadoma District, owns three copper mines, namely Sanyati Mine and Alaska Copper mines, Mhangura Copper Mines and Lomagundi Mines but they were mothballed due to a slump in copper prices and an unfavourable economic and policy environment.

Sandawana Mine is located nearly 100 km south of Zvishavane town in the Mberengwa district in the southern part of Zimbabwe, suspended in 2011. The mine hosts part of the Mweza Greenstone Belt and has great potential for emeralds, gold, tantalite, beryl, iron ore, silver, niobium, lithium, chrome, tin and slate. It consists of a number of emerald deposits including Ceres, Athene, Eros, Marmaid, Junc, Zeus, Atom, Plato, and Vulcan among others.

The Karoi-based graphite mine, Lynx Mine, is under care and maintenance. Production was discontinued in September 2017, with lack of capital being cited.

 

R.H.A. Tungsten Mine is located 270km south of Bulawayo, Zimbabwe’s second biggest city, and is owned by AIM-listed Premier African Minerals. Operations at the mine were suspended in January as the company said it was negotiating with a state empowerment company on a new funding model after the indigenisation law was relaxed by the new government.

Challenges facing mining sector

Mining is capital intensive and as a result, mining companies are struggling to raise funds for recapitalization.

According to Chamber of Mines of Zimbabwe chief executive officer Isaac Kwesu, the sector requires about $11 billion.

Some of the challenges affecting mining sector in Zimbabwe include a fall in the global prices of minerals, unfavorable economic conditions, electricity supply, shortages of foreign currency, general rise in the cost of inputs, shortage of capital, international market movements, operational costs and steep tax rates among other problems.

This article first appeared in Mining Zimbabwe Dec 2018 issue.

Gwanda men assaulted for selling fake gold

TEPE
-
0
Gwanda men assaulted for selling fake gold

TWO Gwanda men have been hospitalised after they were severely assaulted for trying to sell fake gold for $5 000 to a dealer.

Matabeleland South Provincial police spokesperson Chief Inspector Philisani Ndebele confirmed the incident which occurred on Tuesday at around 1AM.

He said Walter Dengu (33) a Gwanda based businessman teamed up with Tafadzwa Dzirondizo (25), Godknows Sibanda (18) and several others who are still at large and attacked Clive Gumede (21) and Josiah Mlalazi (19) with sjamboks, iron bars and sticks.

This was after Gumede and Mlalazi allegedly tricked Dengu into buying brass under the pretext that it was gold.

He said the trio had since been arrested over assault charges while their accomplices were still at large.

“I can confirm that we recorded an incident where two men were severely assaulted by a gang after they tried to sell fake gold to a gold buyer. Gumede and Mlalazi met with Walter Dengu in Senondo area on 29 January at around 1AM under the pretext of selling him gold worth $5 000.

“After the transaction had been made Dengu later realised that Gumede and Mlalazi had given him brass under the pretext that it was gold. Dengu teamed up with Dzirondizo and Sibanda and several others, armed themselves with sjamboks, iron bars and sticks and confronted the pair.

“They severely assaulted Gumede and Mlalazi several times with the weapons before fleeing the scene. Gumede and Mlalazi sustained varying injuries and were taken to Gwanda Provincial Hospital where they are admitted. Dengu, Sibanda and Dzirondizo were arrested on the same day,’’ he said.

Chief Insp Ndebele said the police were also going to investigate a case of fraud.

He appealed to members of the public to desist from taking the law into their hands but report those who would have wronged them to the police and allow the law to take its course.

“We always emphasise that people shouldn’t take the law into their own hands. No matter how severe a crime someone has committed people should engage the police and not act out of fury or seek revenge.

“In this case, these people have now been arrested because they took matters into their own hands and assaulted people,” said Chief Insp Ndebele.

“In worst scenarios someone can end up dead just because people are furious and want to deal with matters themselves,” he said. – @DubeMatutu

The Chronicle.

First private mine to produce saleable coal in March

TEPE
-
0
First private mine to produce saleable coal in March

Botswana’s first privately owned coal mine will produce its first saleable coal in March, the chief executive of the company overseeing the project told Reuters.

The Masama Coal Mine aims to produce 1.2 million tonnes per annum of coal and will target the South African market as well as other countries in the region, Minergy Chief Executive Andre Boje said.

“We should ramp up to the nameplate volume of 300,000 tonnes per month by June/July 2019. Our target market is the southern African region at 1.2 million tons per annum, using a combination of road and rail transport,” Boje added.

The open cast mine and associated coal wash plant is located 60 km (37 miles) northwest of Botswana’s capital Gaborone and is being developed at a cost of 400 million pula ($39 million).

Reuters.

Miners oppose EPOs applications

TEPE
-
0
Miners oppose EPOs applications

Zimbabwe Miners Federation (ZMF), the umbrella body representing small-scale miners, is opposing applications for Exclusive Prospecting Orders (EPOs) made by 11 local and international mining companies, which are currently under consideration by the mining affairs board.

In a communique to the Mines minister, Winston Chitando, ZMF stated that they objected to the EPOs applications as they were against national interests.

“The applications in their current form and scope are against the national interest of Zimbabwe and are harmful to the economic empowerment and social development of women in Zimbabwe,” read the letter dated January 28, 2019.

“While it is understood that there is a need as a nation to explore and quantify our mineral resources using modern and up-to-date techniques to boost national investments, the progress to date concerning the uplifting of our nation’s indigenous women will be adversely affected, resulting in the loss of economic empowerment gains achieved since independence.”

ZMF spokesperson Dosman Mangisi told NewsDay yesterday that one of the reasons for objecting to the EPOs applications was that some of the applications covered residential areas.

The EPOs mostly cover the Midlands and Masvingo provinces.

Some of the applicants include Canlite Mining Exploration (Pvt) Ltd, Infield Mining Exploration, Pearline Mining Exploration (Pvt) Ltd, DGL Investments, Zulu Lithium (Pvt) Ltd, Zimthai Tantalum (Pvt) Ltd, Primecraft Investments, Lambourne Limestone, Sinamatella Investments, Triminzim (Pvt) Ltd and RioZim.
The EPOs applications that are under consideration involve minerals such as gold, diamonds, lithium and uranium.

NewsDay

South Africa miners supports restructuring of struggling Eskom

TEPE
-
0
South Africa miners supports restructuring of struggling Eskom

South African miners support a restructuring of struggling state power firm Eskom to boost competition in the electricity supply industry, an industry body said on Wednesday, warning that tariff hikes alone would not solve Eskom’s problems.

Top government officials will discuss whether to split Eskom into generation, transmission and distribution units at a cabinet meeting starting on Wednesday as part of efforts to rescue the company from financial crisis.

The mining and smelting industry is one of Eskom’s top customers, accounting for around 30 percent of electricity demand in Africa’s most industrialised economy.

“Most countries we compete against have electricity supply industries where generation is competitive, there is a state transmission company and some competition in distribution,” Roger Baxter, chief executive of South Africa’s Minerals Council, an industry lobby group, said.”We need Eskom to be made into a much more efficient, cost-effective organisation.””We need Eskom to be made into a much more efficient, cost-effective organisation.”

The Minerals Council, which represents firms including Sibanye-Stillwater and Exxaro, says average annual power price increases of 15.5 percent between 2006 and 2017 reduced investment in the mining sector by a cumulative 103 billion rand ($8 billion).

It says Eskom’s request for a further 15 percent increase in electricity tariffs in each of the next three years – if granted by the country’s energy regulator Nersa – would cripple an industry already in decline.

More than 80 percent of gold production would become marginal or loss-making, with around 75 percent of platinum group metals production marginal or unprofitable by the end of the three-year period, Baxter said.

Thousands of mining jobs could be lost, he added.

Eskom has argued that its tariff hike request to Nersa could help shore up its finances.

Deon Joubert, Eskom’s corporate specialist for finance, told consumers at a public hearing on the proposed hikes on Monday that the utility’s debt had increased as its tariffs had failed to keep pace with its spending on new power stations.

“Eskom is cognisant of the potential impact of the increase in various sectors, but it finds itself in a very difficult financial position,” Joubert said.

Public Enterprises Minister Pravin Gordhan, who oversees Eskom, said on Tuesday that South Africa needed to act fast on Eskom because of the extent of its financial difficulties.

Eskom supplies more than 90 percent of South Africa’s power but is drowning in more than 400 billion rand of debt after a decade of steep financial decline.

Reuters.

Nedbank withdraws coal power funding

TEPE
-
0
Nedbank withdraws coal power funding

Nedbank South Africa is no longer funding coal power producers.

This decision fits with the banking group’s commitment to “green” funding, responsible lending and supporting sustainability initiatives.

The bank says its initial proposal for funding the construction of the Thabametsi and Khanyisa independent power producers (IPPs) has lapsed and will not be renewed.

This follows a corporate policy announced in early 2018 that the bank would no longer fund the construction of any new coal-fired power plants beyond its existing commitments to fund Thabametsi and Khanyisa, which were included as part of the new coal IPP programme in the South African Department of Energy’s draft integrated resource plan for electricity, Draft IRP 2018.

The proposed Thabametsi 557MW coal-fired power station, which would be largely owned by Japan’s Marubeni and South Korea’s Kepco, was planned to be built near Lephalale in Limpopo, while the Khanyisa 306MW power station was to be sited near eMalahleni in Mpumalanga.

The biggest shareholder of Khanyisa would be Saudi-owned Acwa Power.

Nedbank says that it would prefer to offer financing for projects in energy efficiency and renewable energy, such as landfill gas, solar, hydro and wind projects.

The bank says in its core business of lending and investing, it has a crucial role to play in transforming the economy and addressing climate change and that it seeks to “use (its) financial expertise to do good for individuals, businesses and society.”

Nedbank’s announcement follows reports in September 2018 of Standard Bank’s withdrawal of financing the construction of coal-fired power.

Currently, it appears that FirstRand, ABSA and the Development Bank of South Africa (DBSA) are still willing to offer funding for the Thabametsi and Khanyisa projects, but this may change.

Nedbank and Standard Bank have followed the global trend of financial institutions refusing to fund the construction new coal-fired power plants.

Funding is not the only challenge faced by the two new coal IPPs.

Credible high court challenges (reviews of the environmental authorisations) are underway, and atmospheric emission licenses, water-use licenses and generation licenses for both projects are either outstanding or being challenged.

Has a tipping point been reached?

Bloomberg reports that global clean energy investment may finally have reached a tipping point having exceeded US$300 billion over the past five years.

At the same time, the LA Times reports that Germany is set to close all 84 of its coal-fired power stations over the next 19 years, and will rely primarily on renewables by 2038.

The International Renewable Energy Agency (IRENA) reports that environmental concerns and dramatically falling technology costs are making renewables the most cost-effective source of new power generation in much of the world.

According to the International Energy Agency’s report “Coal 2018”, electricity from coal is growing in Southeast Asia and India, but is flat or declining in most other parts of the world – including South Africa.

The latest edition of the World Bank’s “Regulatory Indicators for Sustainable Energy (RISE)” finds that in the past decade, the number of countries with strong policy frameworks for sustainable energy has more than tripled since 2010, with a dramatic increase in the uptake of renewable energy and energy efficiency targets.

A possible way ahead

It is possible that the Chinese will offer to fill the gap resulting from Nedbank and Standard Bank’s withdrawal of funding for the two new coal-fired power plants, and if they do, it will be especially interesting to see what the terms and conditions of such alternative funding would entail.

South Africa, as a signatory to the United Nations Framework Convention on Climate Change’s Paris Agreement, is duty-bound to reduce its reliance on coal for electricity generation and to close at least the five worst offending emitters of particulates and toxic gasses in Eskom’s fleet of coal-fired power stations as soon as possible.

One wonders if the decision by two of the country’s biggest banks to decline from funding new coal-fired electricity generation might cause the DoE to remove the two new coal-fired power from the Draft IRP 2018 which is still to be promulgated.

Fin24.

7 reasons why it will take long to formalize the small scale sector

TEPE
-
0
7 reasons why it will take long to formalize the small scale sector

Miners are of the belief that, for the economy of Zimbabwe to be restored to yesteryear’s heights, the mining sector have to contribute remarkably. The mining industry is one of the industries that is capable of backing up and financing other sectors that have been struggling to stand. Therefore, there is a need to impulse the formalization of the sector so that it aids other industries.

Rudairo Dickson Mapuranga

Zimbabwe Miners Federation (ZMF) which is a baby of Mines and Mining Development was formed under the new Mines and Mineral act to oversee the formalization of mining in all Zimbabwe’s mining districts. Its mandate is to promote small scale miners so that they transform from being shunned actors into valued and high production mining firms. However, ZMF have a lot to do in order to transform the so called (amakozokoza) illegal small scale miners into formalized small scale mining firms. Experts in the mining industry believe it will take a long time for these illegal miners to choose the formalized way.

The issue EPOs

Reports have it that exclusive prospective orders (EPOs) have taken vast majority of mining land. For example in October 2018 a youth advocate group in Gwanda said that 95% of mining land in Matebelend was under EPOs thereby making it harder for new players to venture into the mining sector formally. Some of these EPOs are given in arid lands where agricultural activities are very few, the majority of people from these areas mainly survive through small scale mining. Thus, the locals under any circumstances would find themselves mining in those lands deemed somebody’s. And also majority of these lands under epos are reported to be idle with no activities taking place, consequently giving chance to illegal miners to find an opportunity of digging.

Mining license fees are out of touch

“It is not usually Zimbabwe’s way to go illegally, in most cases where Zimbabweans are found on the wrong side of the law in their majority, something bigger would have pushed them” said one expert. Thus, generally illegal miners become illegal due to different circumstances forcing them to. Many illegal miners come from a very poor background, thereby making most of them exposed to the pegged mining license fees which are extremely high. With the increase in mining license fees, many small scale miners have resorted to illegal mining because it have proven to be sustaining under these difficult economic times.

Zimbabwe’s unemployment challenges

Lack of employment have proven to be a huge factor in the emergence of illegal gold miners. According to one mining expert, most of the illegal miners are youth who are finding it difficult to live amidst Zimbabwe’s economy deterioration therefore their alternative to live a decent life is through mining. However, most of these youth don’t afford license fees thus they have no capacity to mine in a formalized manner.

FPR pricing

Fidelity Printers and Refiners payment of gold is another reason why illegal small scale miners would opt to be illegal than join the formalized way. FPR pay small scale miners 70% of the total amount in USD and the remaining 30% in Bond note or transfer which is not sustainable at all due to the fact that these miners produce less quantities, the transfer amount is very significant amount lost considering the current market forces in Zimbabwe. Thus, small scale miners would choose to go the illegal mode where they will sale their gold on different alternative markets on which they are assured 100% USD.

The police running a syndicate

The police in Zimbabwe is reported running a syndicate with some illegal miners, allowing the illegal small scale miners to dig for precious metals or stones in return for a share of whatever the miners would have produced. This syndicate is reportedly keeping amakorokaza in the mining business protecting them from the arm of justice. Thus, illegal miners are operating freely under the protection of rogue elements in the police force. Therefore going the legitimate way would be disadvantageous to these protected illegitimate miners since the legal route would provide them with less money than the illegal path where they don’t have the burden of paying tax and licenses.

ZMF is failing to reach out

Some experts reflect that ZMF’s efforts have not been well illuminated to amakorokoza and even to a lot of small scale miners. They believe that there is need for an in-depth education on the importance and benefits of being part of such organizations and the benefits of doing things in a standardized manner. ZMF therefore need to be reachable to all small scale miners and educate them as well as providing them with ideas of improving the sector through different investments.

However, there are miners who believe that ZMF is irrelevant at the moment in as far as the formalization of the sector is concerned. They believe that ZMF will play a crucial role to some extent, but however, their hands are tied up due to the economic and social situations that are prevailing in the country.

“To think organization like ZMF can rid the industry of amakorokoza is wishful thinking, what needs to be addressed is the underlying issues such as poverty that push people into being makorokoza, unless ZMF starts sponsoring these guys to grow their operations, because most of these guys are looking for a few points a day maybe a gram if they are lucky so these organizations don’t really fit into the equation” one miner said.

Petra collapse due to digging cheap South Africa diamonds

TEPE
-
0
Petra collapse due to digging cheap South Africa diamonds

Petra Diamonds Ltd. fell the most in eight months in London after the South Africa-focused miner dug up gems worth significantly less than expected.

Petra has been seeking to turn around its fortunes after piling up debt to expand its flagship Cullinan mine in South Africa. It was forced to tap shareholders for funds last year to alleviate those problems, but the company’s efforts are being undermined by falling diamond prices and its recovery of too many low-quality stones.Petra fell as much as 18 percent in London, the most since May when it announced it was raising $178 million from shareholders.

Petra is being hit on two fronts. Rough diamonds fetched 4 percent less in the company’s fiscal first half through December than in the preceding six months, as part of a wider industry squeeze. However, the bigger concern is that prices achieved at Cullinan slumped 31 percent to just $96 per carat from a year earlier. That situation may continue, according to RBC Capital Markets.

“We see concern that despite ramping volumes prices are not following, indicating the ‘base’ level of pricing may be structurally lower than previously anticipated,” the bank said.

Diamond miners are struggling across the board, especially those mining cheaper and smaller gems where there is too much supply, and the traders and manufacturers that buy them are struggling to make a profit. Last month, some of Rio Tinto Group’s customers refused to buy cheaper diamonds, while De Beers has been forced to cut prices and offer concessions to buyers.

The results on Tuesday of De Beers’s first sale of the year — traditionally one of the biggest — will be closely watched for clues about demand.

Reuters.

1...667668669...677Page 668 of 677