THE skewed pricing structure and the acute foreign currency shortages in the market have crippled the operations of coal miners, lowered production and could lead to a shut down of operations, businessdigest has learnt.

The developments could also severely reduce the power output at Hwange Power Station.

This comes at a time the mining sector has been hard hit by a number of challenges which include foreign currency shortages, power outages and inadequate capital.

Makomo Resources director and Coal Producers Association chairperson Raymond Mutokonyi warned that if the issue is not addressed, it could result in Hwange Power Station failing to generate electricity.

“The coal mining sector is definitely under threat due to the capacity constraints. It is only a matter of time. We risk having Hwange shutting down because of the inadequate stock they have,” Mutokonyi said.

As of Tuesday this week, he said, Hwange Power Station had only 94 000 tonnes out of a required minimum stock of 200 000 tonnes in stocks, representing only 20 days cover. He said if Hwange put its Unit 5 into operation, then that cover could be reduced to less than 10 days.

“Unless some of these issues are looked at properly, there is a real possibility of a blackout,” Mutokonyi warned.

He said there has been a decline in the production of coal due to various challenges such as the ineffective pricing model at which producers sell their coal to the Zimbabwe Power Company, a subsidiary of Zesa Holdings.

“Over time, we have seen the decline in production capacity at the coal mines because of obviously the challenges in the economy, but primarily because of the payment structure of coal,” Mutokonyi said. “The running price of coal at the moment was last set in 2011 and has not been reviewed since then. The position of the Zimbabwe Power Company is that they cannot review the price without an increase in the power tariff which unfortunately has not been awarded.”

He said they are currently being paid the equivalent of US$16 per tonne which falls far short of the price of between US$33 to US$35 per tonne it needs to remain viable.

Mutokonyi said the three coal mining companies namely Hwange Colliery, Zambezi Gas and Makomo Resources are hard hit by the fuel shortages in the country. He said the three mining companies need about 1,5 million litres of diesel a month for its operations mainly for its earth moving machinery.

He said the situation is aggravated by the shortage of foreign currency which is needed to buy spares and explosives as well as AN fertilizer. He pointed out that while the fertilizer is available, it can only be made available from bonded warehouses and can only be accessed by paying for the commodity in foreign currency. As a result, the association has requested that ZPC pays partly in foreign currency for the coal it produces to capacitate them and acquire equipment.

Mutokonyi bemoaned the foreign currency retention threshold set by the Reserve Bank of Zimbabwe which currently stands at 50%. He said they need a foreign currency threshold of at least 80%.

He said his company has now resorted to the pre-payment system in order to remain viable given the volatile nature of the economy. Source: Zimbabwe Independent

A complex syndicate involving some Chinese nationals and senior government officials is at the centre of  chrome smuggling in Zimbabwe through under declaration of volumes, which have prejudiced the state of millions of dollars in taxes and mining fees.

Chrome is one of the country’s main mineral exports after gold, Platinum Group Metals and diamonds.

Information gathered by this paper shows that some large scale chrome miners are working with officials from the Zimbabwe Revenue Authority (Zimra) and Minerals Marketing Corporation of Zimbabwe (MMCZ) in facilitating under-declared ore beyond the country’s borders before shipment to target markets such as China and India.

The chrome that is being declared at various weigh bridges owned by MMCZ across the country does not tally with the volumes of chrome exported through the borders and the state-owned minerals marketer recently received reports of a possible rampant smuggling of chrome through under-declaration.

“The country has been losing millions through this cartel of chrome smugglers who are working with Zimra and MMCZ officials. This has been going on for some time but no concrete action has been taken to monitor how much chrome goes through weigh bridges and how much is then declared to the Reserve Bank of Zimbabwe through CD1 forms,” the source said.

“MMCZ just recently received reports of chrome that was being smuggled through the border especially the Forbes Border Post. This cartel has mainly been driven by Chinese that are into small scale chrome mining.”

The involvement of the Chinese in smuggling is a stab in the back for Zimbabwe which has rolled out a red carpet for the Asian giant under the guise of it being an all-weather friend.

The continued smuggling of chrome has pushed MMCZ to set up more weigh bridges across the country to curb this scourge which also involves senior bureaucrats.

Mines and Mining Development Minister Winston Chitando said he had not yet received a report on smuggling but urged those with information to come forward.

Chitando’s comment comes despite recent reports that a Mutare-based official was in February arrested on allegations of attempting to facilitate the smuggling of a truckload of chrome ore to Mozambique. The chrome intercepted had a value of roughly US$25 000.

“My office has not yet received a report on chrome smuggling but I urge those with information to come forward,” Chitando said. MMCZ could not comment on the matter.

On the side of Zimra, its officials are accused of being complicit in carrying out export duties while issuing fraudulent bills of entry.

A World Bank report, The Changing Wealth of Nations 2018, documents Africa’s impoverishment by the rampant extraction of minerals, oil and gas.

In the report, the bank concludes that sub-Saharan Africa loses about US$100bn worth of adjusted net savings annually through massive looting of minerals.

It said “the only region with periods of negative levels — averaging negative three percent of gross national income over the past decade — suggesting that its development policies are not yet sufficiently promoting sustainable economic growth and clearly, natural resource depletion remains one of the key drivers of negative adjusted net
savings in the region”.

SOURCE: Business Times

The mine, based in Guruve, had failed to pay workers their full salaries, forcing employees to sue and eventually winning the case.

Headline

CHINESE mining firm, San He Zimbabwe, had its property attached by the sheriff after it failed to settle over US$218 970 in salary arrears and non-payment of overtime.

The award was registered at the High Court, paving way for the attachment of property such as dump trucks, tractors, irrigation equipment
and excavators.

After the attachment, the company, however, applied for stay of execution at the High Court, but lost the case.
“Applicant became aware of draft ruling and felt it was at peace. It was served to appear before the Labour Court, but failed to do so,
thinking it was at peace. (It) was served with application for registration of arbitral award, but did not file notice of opposition,
thinking it was at peace,” part of the judgment read.

Zimbabwe Diamond and Allied Minerals Workers’ Union (Zdamwu), which represented the workers, warned mining companies against labour
malpractices, saying the law would deal with them.

“Chinese chrome mine is in soup over underpayment of wages. We have attached property to recover US$219 000 or RTGS dollars equivalent,”
Zdamwu general-secretary Justice Chinhema said.

“This is a clear message to all violators of labour rights that the law will catch up with them. Zdamwu will fish you out and make you
comply in a painful way. The time for corrupt employers is over. They can bribe a few individuals for protection, but when we reach you,
we fish you and your protector,” he said._NewsDay