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Zimbabwe pledges mine that doesn’t exist, to borrow $500m

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Zimbabwe pledges mine that doesn’t exist, to borrow $500m

The collateral for African Export-Import Bank’s $500 million loan to Zimbabwe is a mine that hasn’t been dug yet, people familiar with the matter said.

The loan, which will be paid over four years when production starts, is backed by a mine that Great Dyke Investments, a venture between Russian investors and the Zimbabwean military, plans to build at a cost of $4 billion, the people said. The mine, for which Afreximbank is arranging funding, is struggling to attract financiers because of the interest held by the military’s Zimbabwe Defense Industries Ltd.

Short of foreign currency, fuel and medicine and battling the highest inflation since 2008, Zimbabwe is mortgaging its mineral wealth in exchange for foreign currency. Lines of credit from Afreximbank were secured using gold exports as collateral, Zimbabwe’s Financial Gazette reported in February, citing Reserve Bank of Zimbabwe Governor John Mangudya.

Short of foreign currency, fuel and medicine and battling the highest inflation since 2008, Zimbabwe is mortgaging its mineral wealth in exchange for foreign currency

Zimbabwe secured the $500 million loan, the origin and terms of which were not disclosed, after businesses complained that the interbank currency market instituted in February wasn’t functional because there weren’t enough dollars to meet their needs. The RTGS$, a quasi-currency that isn’t traded outside Zimbabwe, is exchanged on the market. The government abandoned its own currency. the Zimbabwe dollar, in 2009 after a bout of hyperinflation.

George Guvamatanga, the permanent secretary in the finance ministry, said he couldn’t comment, citing confidentiality agreements. Afreximbank didn’t immediately respond to a request for comment.

Afreximbank, which is based in Cairo and is partially owned by African governments, has lent to Zimbabwe before. In addition to the gold-backed loan it extended a $600 million line of credit to the country in 2017. While the country is mired in an economic crisis, it has the world’s third-biggest platinum group metals deposits and abundant reserves of gold, iron ore, diamonds and lithium. It also has some of the most developed infrastructure in Africa and one of the region’s best educated work forces.

The structure of the deal was decided earlier this month at a meeting attended by officials from Zimbabwe’s treasury, central bank, mines ministry, Afreximbank, and Great Dyke Investments chairwoman, Hespinah Rukato, the people said. The mine could produce about 800,000 ounces of platinum group metals a year if built.

Rukato declined to comment. Officials mines ministry said the couldn’t immediately comment. Mangudya wasn’t available when his office was called._Bloomberg News

Zimbabwe mine output subdued

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Zimbabwe mine output subdued

Zimbabwe’s mining sector was subdued in the first quarter due to a severe dollar crunch that affected production, with gold the most hit, the mining chamber said, adding some bullion miners had experienced recently introduced power cuts.

Mining generates most of the export earnings for the southern African nation, which faces a severe shortage of dollars that has led to a scarcity of fuel and medicines.

Miners, including those of gold and platinum, are paid dollars for half of their output while the balance is paid in the local RTGS dollar currency

Isaac Kwesu, CEO of Chamber of Mines, which represents large mining companies, said mines had during the first quarter to March faced delays in getting their dollar payments from the central bank.

Miners, including those of gold and platinum, are paid dollars for half of their output while the balance is paid in the local RTGS dollar currency.

Initially, miners faced delays of up to 12 weeks to get their U.S. dollars but the time leg had been reduced to 2 weeks, although miners want to be paid in one week, Kwesu said.

“Preliminary figures indicate that the first quarter was not a good performing period for our mining industry as most key minerals recorded some negative growth,” Kwesu told reporters.

Kwesu said he expected mining production to improve as mining firms receive their dollars quicker and get more in local currency as the RTGS dollar continues to weaken.

Miners say they want to be allowed to keep 70 percent of their dollar earnings to allow them to import equipment and mining consumables, including fuel, in a timely manner.

Gold deliveries to central bank unit Fidelity Printers and Refiners, which buys all the country’s gold, declined to 6.5 tonnes from 7.3 tonnes during the January-March quarter.

Zimbabwe produced a record 33 tonnes last year and has set a target of 40 tonnes this year.

The mining chamber’s president Batsirai Manhando said mining companies were for now spared from the indefinite rolling power cuts, known locally as load shedding, throughout the country.

“There has been some loading shedding in some of the gold mining houses but not that significant to affect performance yet because this is a recent problem,” Manhando said._Reuters

ZERA effects price adjustment on fuel

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ZERA effects price adjustment on fuel

Fuel prices

Top ten gold producers in Zimbabwe 2019

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Top ten gold producers in Zimbabwe 2019

For the past decade, the country’s mining sector has been facing a myriad of challenges ranging from fluctuating global mineral prices, subdued working capital and above all brain drain due to prevailing economic challenges.

However, despite the prevailing economic challenges, some mining houses have managed to defy the odds by coming up with problem mitigating measures to adapt to the hardships.

Some companies during the past decade have folded never to come back, some struggling, but without measuring all of them with the same yardstick, some have managed to thrive, posting the best results financially and in production terms.

These are the top ten gold producers in Zimbabwe.

1. Freda Rebecca

Freda Rebecca is the largest gold producer in Zimbabwe. It’s located close to Bindura’s Trojan Nickel mine, 90km north of Harare.

It mines 3,000 tonnes of ore and removes 8,000 bank of overburden on an average every day. The mine poured its first gold in April 1988.

For over 10 years, the company has navigated the demands of mining in Africa with a fair degree of skill, experience and agility. Operating in Zimbabwe, in particular, has been challenging at times, especially when hyperinflation, currency instability and issues with indigenisation laws caused uncertainty. In more recent years, with the adoption of the US$, a degree of normalisation has prevailed.

The company underwent a significant change in executive direction in 2015, following an EGM initiated by shareholders over corporate governance. Since then, a new board of directors has been appointed and a root and branch reform across the group and at its operations has occurred.

Process of restructuring the group’s operations continues, as the business is set on a long-term sustainable growth path once again and the Group is now emerging from one of its most challenging periods with Cautious optimism.

2. Blanket Mine

Blanket Mine is located in the province of Matabeleland South, Zimbabwe. It is located about 15 km northwest of Gwanda and 140 km south of Bulawayo.

The village grew up around the eponymous gold mine and provides a Residential and commercial centre. Its population at the time of the 1982 census was 1,346 people. The Matabeleland mine was established in 1904 at the northwest end of the Gwanda Greenstone Belt. Gold had previously been mined on an artisanal basis but was industrialised by the Matabele Reefs and Estate Company, which operated the mine until 1911 when it was sold to Forbes Rhodesia Syndicate. It apparently ceased operations after 1916 but resumed in 1941 under a new owner, F.D.A. Payne.

History

The Canadian mine company Falconbridge Ltd. took over in 1964 and ran it until 1993, producing over 500,000 ounces of gold from 4 million tons of ore. It was sold to Kinross Gold, which produced another 400,000 ounces of gold from 2,4 million tons over the following 12 years

Blanket mine despite it being a mid-tier gold producer has managed to outperform its peers in the mining sector. Since inception, the mining company immensely showed its image as a good corporate citizen and has been on the best-performing companies owned by foreign investors.

Now owned by New York Stock Exchange-listed Caledonia Mining Corporation, run by Steve Curtis the mine is currently carrying out an ambitious expansion drive aimed at producing 80 000 ounces of gold by 2021.

The company’s strategic focus remains the implementation of its investment plan at Blanket Mine which was
Announced in November 2014 and is expected to extend the life of the mine. The mining firm has been consistent in its production and profitability since dollarisation and has been one of the companies of note in terms of retaining shareholder value through the consistent payment of dividends.

3. RioZim

Rio Zimbabwe, a diversified miner owns two gold mines which are Renco Mine and Cam and Motor Mine in Kadoma.

Renco is 100% owned by RioZim Limited. Mining rights are held through mining claims, a mining lease and a special grant covering a total area of 2 736 hectares. Renco is located in the South-East of Zimbabwe in Nyajena communal lands, approximately 75km southeast of Masvingo.

Cam and Motor Gold Mine is the second project in Rio Gold’s operations. The mine is located in the Kadoma area of Mashonaland West, Zimbabwe covering an area totalling 1, 151 hectares.

Rio Zim is also the owners of Dalny Mine, formerly owned by Falcon Gold.

4. Metallon Corporation

Metallon Corporation is a gold producer, developer and explorer with operations in Zimbabwe and the Democratic Republic of Congo. Metallon used to be one of Zimbabwe’s largest gold mining company operating four gold mines throughout the country owned by Mzi Khumalo.

Over the past two years, things have changed, a situation which saw the miner offloading Arcturus Mine while two of its mines have since closed due to the prevailing economic conditions. The miner currently owns How Mine
(Flagship), Mazowe, Shamva and Redwing Mines.

Metallon Corporation in 2015, gold production was 97,000 ounces and the target was 120,000 ounces in 2016. Across the group, Metallon has a significant resource base with a JORC-compliant 8.3 million ounce resource.

5. Sabi gold Mine

Sabi gold mine claims were first pegged in the 1890s with the first recorded production in 1909. It was acquired by ZMDC in 1984. ZMDC owns 100% Kimberworth Investments (Pvt) Ltd trading as Sabi Gold Mine, a company currently running the mine. The mine employs about 450 employees and is currently serviced by one rectangular double compartment shaft reaching down to 15 metres below 12 level elevation. The Principal mining method is underhand stopping. The mine has a capacity to treat 450 tonnes of ore per day.

The Zvishavane based miner resumed operations in 2017 after an agreement was reached between a local
Investment consortium, Chandiwana Mining Cooperation and the Zimbabwe Mining Development Corporation.

Part of the deal saw Chandiwana Mining Corporation investing about $26 million into the gold miner. Chandiwana Mining Corporation is a local investment vehicle composed of  Zimbabweans based in the Diaspora who are investing in mining.

The gold miner has been undergoing renovations after securing funding from the investor. The mine closed down in May 2014 due to the shortage of working capital and ballooning debt levels.

6. Falcon Gold

Falcon Gold Zimbabwe Limited is a gold mining and exploration company in Zimbabwe.

The company formerly owned Dalny mine in Chakari, Venice Mine in Kadoma and Golden Quarry mine in Shurugwi. Founded in 1991, Falcon Gold Zimbabwe is a subsidiary of the New Dawn Mining Group. New Dawn Mining Corp involved in the exploration, development, extraction, processing and reclamation of precious metal deposits in Zimbabwe.

It primarily explores for gold, base metals and precious metals. Falcon Gold Zimbabwe Limited also has an operational processing plant and Ancillary infrastructure which supports a central processing plant that treats ore from Pickstone.

7. Pickstone Peerless

Australian Stock Exchange Listed Vast Resources has a 25% indirect interest in the Pickstone-Peerless Gold Mine, and mining claims surrounding the former Giant Gold Mine, in Zimbabwe, over both of which it retains Board control.

The 584ha Pickstone-Peerless Gold Mine is located 100km southwest of Harare and has historically produced over 400,000oz gold. Pickstone-Peerless has a current JORC Resource of 62 million tonnes grading 1.8 g/t, containing 3.56 million ounces of gold. Included in this Resource is an open-pittable Ore Reserve of 16.6Mt grading at 1.9 g/t for 1.02 million ounces of gold.

Full mine infrastructure was commissioned in H1 2015 with production from the oxide cap commencing in September 2015. Gold production is close to 20,000 troy oz per annum with a cash cost per oz circa US$700.

Work is underway to commission a sulphide processing plant to treat the open cast sulphides, with first sulphide production scheduled in 2018 to build up mining and processing rates to 33,000 tonnes per month at an average grade of between 3-4g/t gold once the oxide resource is fully depleted. Gold production is expected to increase to
Approximately 50,000oz per annum.

8. Duration Gold

Duration Gold Limited offers gold exploration and production services. The company owns 5 core assets with historic production of 4.6 million oz. It also sells gold at international spot prices. The company was founded in 2006 and is based in Bulawayo, Zimbabwe. Duration Gold Limited operates as a subsidiary of Clarity Enterprises Limited.

One of its flagship gold mines is Vumbachikwe, which is one of Zimbabwe’s oldest gold mines.

9. Bilboes Holdings

Bilboes Holdings (Private) Limited owns and operates gold mines in Zimbabwe. It engages in mining, exploring, and producing gold. The company was founded in 1989 and is based in Harare, Zimbabwe.

Bilboes own and operates four gold mines namely Isabella, Bubi, When and McCay’s ‘existing mines’ all in the Bubi Greenstone Belt of Zimbabwe. The mines were acquired from Anglo American Corporation Zimbabwe Limited (AMZIM) in 2003 together with most of AMZIM’s gold mineral rights in Zimbabwe.

10. Eureka Gold Mine

Vast Resources holds a 23.75% interest in the Eureka Gold Mine in Zimbabwe. The mine is situated about 150km north of Harare and 300km from the Pickstone-Peerless mine.

Eureka is a modern gold mine designed to produce up to 70,000oz of gold per annum from an open pit operation. Operations were suspended in 2000 due to high costs and low gold prices. The mine is currently on care and maintenance and the Company is focused on recommencing production in the near term.

The miner has been dormant but was last year commissioned by President Emmerson Mnangagwa.

Ten priorities for getting Mining moving in Zimbabwe

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Ten priorities for getting Mining moving in Zimbabwe

Zimbabwe Mining is beginning to recover after decades of isolation caused by the draconian laws of indigenisation that had the “jewel of Africa” be labelled as a no-go area for investment. As the current President took over the reins, he inspired the nation, ignited hope and had the country speaking in one voice. The hope he inspired marked the beginning of a new era and the Mantra “Zimbabwe is open for business”. As an old Chinese proverb says “it’s Easy to Destroy but Hard to Build”, the recovery is in motion, but a lot needs to be done in order to get the desired results. The following are priorities for getting Mining Moving in Zimbabwe.

By Rudairo Mapuranga

1. End corruption

Corruption in the mining industry in Zimbabwe is not well documented but too prevalent.

Recently, a forensic audit by Reynolds Tendai Muza, a forensic auditor and investigator with Ralph Bomment Greenacre and Reynolds unearthed massive corruption at Hwange Colliery Company Limited in which the minister of Mines Hon Winston Chitando was implicated. Investigations by the Mines portfolio committee also exposed that the once thriving mine was actually destroyed by very powerful persons, some of whom are currently serving in government.

Corruption is bad for business and it reduces investment, both foreign and local, therefore a direct insult to the “Open for Business” mantra. The government of Zimbabwe needs to reduce the risk and incidence of corruption in the mining sector by improving the transparency of decision-making regarding granting of mining exploration and extraction licenses; public and stakeholder access to mining revenue information, including where companies are based and where they operate, and public disclosure of the payment and application of mining revenues.

2. Institutionalise the rule of law to end statutory risk

No changes to rules and regulations without stakeholder consultations and advance notice.

Policy inconsistency in Zimbabwe has become the order of the day. The country’s economic problems could be addressed if progressive policies were to put in place. For example, in 2013, The Standard reported that, because of poor policies, Diamonds mined in Zimbabwe (a country with over 85% unemployment rate), where creating jobs in other parts of the world. It was reported that Chiadzwa Diamonds created 60 000 new jobs in India.

Also recently, the invasion of the Gadzema mine in Chegutu and also the invasion of the Gaika mine in Kwekwe by alleged artisanal miners who are allegedly led by senior government officials to create a bad name for the country and reduces FDI.

In 2011, the government published new regulations implementing an ‘indigenisation program’ which required foreign mining companies to give a 51% stake of their business to black Zimbabweans. Many companies where
Unwilling to do so and left the country. This affected the Mining industry in Zimbabwe which was predicted to be on a constant rise. The Mining regulation was implemented without stakeholder consultation leading to rapid investment fallout. However the indeginisation program has been abolished.

3. Stable economic environment

According to the World Bank, Zimbabwe’s economy is at a crossroads. The country faces challenges relating to fiscal consolidation and financial sector stabilization. A stable economy with a clear monetary policy that is well consulted and crafted helps attract foreign direct investment (FDI) and local investment without too much hustle.

A stable economy where property rights are respected and policy is consistent will help stabilize the mining sector, thereby leading to the growth of the sector through attracting the right investment.

4. Currency must be free floating and tradable.

A floating exchange rate is a regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies. This is in Contrast to a fixed exchange rate, in which the government entirely or predominantly determines the rate.

A currency’s level has a direct impact on the following aspects of the economy. According to economics online, a
The currency’s level has a direct impact on the following aspects of the economy, Merchandise trade, this refers to a nation’s international trade or its exports and imports. In general terms, a weaker currency will stimulate exports and make imports more expensive, thereby decreasing a nation’s trade deficit (or increasing surplus) over time).

Economic growth;

Capital Flows Foreign capital tends to flow into countries that have strong governments, dynamic economies, and stable currencies, therefore, a nation needs to have a relatively stable currency to Attract investment capital from foreign investors.

Zimbabwe needs to have a relatively stable currency to attract investment capital from foreign investors.

5. Absolute minimal restrictions on lines of communication, especially the internet.

The government of Zimbabwe reportedly lost millions of dollars through delayed Revenue inflows due to the slow processing of imports and exports after the switching off internet services countrywide early this year.

Technological change plays a key role in the process of economic development. With the rise in technology, information has become a very influential and pivotal tool in doing business. Through the internet, business transactions and marketing has become popular.

Through the internet and other lines of communication, Zimbabwe has been marketed and recognized in the world mineral market. Bloggers such as www.miningzimbabwe.com have helped put Zimbabwe on the world mining map and are rated amongst the top mining sites worldwide.

Thus, the government of Zimbabwe should reduce its total control of lines of Communications, for example, shutting down the internet.

6. Improve geoscientific knowledge by revamping and recapitalising the Geological survey Dept

According to Geological survey of Zimbabwe, mining has played an important role in the economic development of this country for generations.

Despite the huge mineral potential, various technical and political reasons have deprived the mining industry of growth. The industry in Zimbabwe has lagged behind in the usage of modern equipment and technology necessary to discover new deposits, especially in virgin areas. For instance, the use of high-resolution geophysics and geochemistry, and manipulation of data in Geographical Information Systems (GIS) that have Contributed immensely to the discovery of mineral deposits in many mineral-rich countries have not been used much in
Zimbabwe.

There are over 3000 known mineral deposits in Zimbabwe. Many of them have been operating as small mines discovered on Ancients workings. Re-evaluation of some of these based on a better understanding of ore deposits and mineralisation suggests that many of the so-called small mines are more prospective in respect of larger deposits than currently perceived. For instance, all the largest gold deposits started as small mines that were expanded on the basis of better understanding of geology and ore deposits. Consequently, the large numbers of small mines in this country provide huge opportunities for exploration for important mineral deposits. Derelict mines are similarly highly potential, and many of them are worth investigating.

7. Partially privatise ZMDC

ZMDC is reportedly dead broke which led to speculations that they cannot afford to explore their numerous claims. Many assertions are constantly being thrown around which are of the view that, ZMDC is sitting on dead assets and the government has no money to give so as to carry out high risk exploration. Therefore, this has led experts into believing that, ZMDC must be listed on the stock exchange to raise money and obviously the government gets diluted to less than the controlling shareholder.

An example of the successes of privatizing is in Zambia, where Zambia’s ZCCM was a dead parastatal with decent
potential projects which then led to its privatisation. Now ZCCM owns shares in working mines that the private sector built up. Therefore, ZMDC is dead and sitting on potential ground, meaning zero value is being derived. Thus, there are valid reasons which support that, ZMDC must be privatised, owning 100% of a non-working asset is useless. According to experts, it is better to own at least 25% of a working asset.

8. Ministry of mines must go on more international road shows with seasoned mining personnel to explain Zim mineral resource potential.

Ideally, the Director of the Geological survey must lead the discussion. According to experts in the mining sector, when it comes to mining issues in Zimbabwe everyone has become an expert, this has led to totally wrong positions on the resources Zimbabwe possesses.

“For mining, everyone in Zimbabwe is an expert. Everyone can tell you how rich Chiyadzwa is and how Zimbabwe has the most resources in the world. It’s because we haven’t said ask the resources people. Totally wrong positions out there to the laymen about Zimbabwe resources. Then people get baffled why no new mines are being opened” said one expert.

According to Forbes Mugumbate, the country’s laws do not compel companies to delineate certain resources before
mining, and as a result, resources at many mineral deposits are not known.

Majority of mines operate at zero reserves or usually only calculate reserves a few months ahead of production. Small-scale producers who dominate the industry do not have the capacity to delineate reserves. However, many mines have been intermittently worked for nearly 100 years on this basis without being exhausted. This suggests that there are substantial mineral reserves at many deposits, most of which have only been sporadically worked.

9. Promote exploration seriously with good tax breaks for companies who put high risk exploration $ into the ground

It is a well-known fact that the mining industry in Zimbabwe is hamstrung by a lack of exploration. There has been a
decline in exploration activities in spite of Zimbabwe being the most unexplored and highly prospective in the world.

Although most of the large and well exposed and richly mineralized districts have been found and exploited, there is still much mineral wealth still to be discovered. No activity adds value to mining than exploration, a prosperous mining industry is a key element in achieving the president of Zimbabwe’s vision.

Exploration could lead to potential new mines and minerals that are yet to be discovered. Zimbabwe has challenges of attracting investment from mineral exploration companies, therefore, the government needs to address the effectiveness of our regulatory regime so we can provide potential investors with a stable investment climate. High
exploration companies should be awarded tax free licences to operate on finding new deposits and should also offer them with loans on operation costs.

According to Forbes Mugumbate, the structure of the mining industry in Zimbabwe is highly skewed. There is a gap between hundreds of small scale mines and a few large mines. There are many small mines with the potential to
develop into medium and large-scale.

10. Digitalise mining rights, title registration and all payments

Amidst reports of corruption, money laundering, externalization and other unscrupulous behavior by mining
Personnel, all transactions which are mining related in Zimbabwe need to be done digitally to avoid corruption and
Improve transparency.

The registration of mining rights and titles should be digitalised to improve administration and avoid double title allocations. There have been reports of disputes emanating from double title allocations digitalisation will eliminate such issues with ease.

There should be an open to public geographical locations, ownership and time validity of mining rights and titles, mining rights and title registration and payment of registration fees should be digitalised for online processing.

This article first appeared in the May 2019 Issue of the Mining Zimbabwe Magazine.

Rushwaya soldiers on, wins court challenge

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Rushwaya soldiers on, wins court challenge

Zimbabwe Miners Federation (ZMF) president Henrietta Rushwaya won the court challenge against the Zvishavane-Mberengwa Mining Association (ZMMA) which was filed as an urgent chamber application seeking to bar her from representing the interests of ZMF after she had appealed to the Supreme Court against the High Court order which stripped her of the ZMF presidency.

Rudairo Mapuranga

On April 16, 2019, ZMMA applied for the urgent application seeking to block Rushwaya from acting as the body’s president until a judgement is passed by the Supreme Court.

However, in his judgement Bulawayo High court judge, Justice Martin Makonese dismissed the application as urgent and blasted the applicant for not doing their homework before filing the application.

“It is my view that the application before me is not urgent. In any event, the order sought in the draft order is not competent as it is not supported by the averments in the founding affidavit. In his submissions, Mr. Tavengwa, appearing for the applicant sought to argue that the application for leave to execute pending appeal was not being pursued at this stage and that the only relief sought is for an interdict. It was clear that not much thought was put in preparing and filing this application. The application in its present form is fatally defective” said Justice Makonese.

Justice Makonese said that the applicant’s behavior is abuse and mockery to court processes and is not be encouraged because it wastes the court’s time. The Justice also said that the applicant was supposed to compensate the respondent for all value cost due to the court challenge.

“The applicant indicates that this court must grant an interdict essentially regarding the same dispute. This approach smacks of an abuse of the court process. Such conduct should be discouraged. The respondent has been put out of pocket in opposing this claim. Respondent is entitled to recover their costs in full, ” said Justice Makonese.

The high court judge dismissed the court application by ZMMA with costs.

“In the result, the application is dismissed with costs on an attorney and client scale” Justice Makonese declared.

 

Metallon sues RBZ US$132m for non-payment of gold produced

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Metallon sues RBZ US$132m for non-payment of gold produced

Metallon Corporation (“Metallon”), the leading gold mining company in Zimbabwe, has served Legal notice to the Reserve Bank of Zimbabwe (RBZ) and Fidelity Printers and Refiners Limited, (FPR) for lack of payment for gold produced. Metallon is demanding specific performance from the Governor of the RBZ and the FPR, including full payment of amounts owed.

“We have started legal proceedings against the Reserve Bank of Zimbabwe, particularly against the Governor, Dr John Mangudya, demanding specific performance. We are doing this because we feel the treatment we have received from the concerned authorities has been driven by corruption and a sense of impunity, for which we believe there is no end in sight.” said Mzi Khumalo, Chairman of Metallon.

Metallon has been forced to put its mines on care and maintenance because of the unsustainable costs of running them without proper compensation for its proceeds from the Government of Zimbabwe. Where payments were received, they would only amount to a third of the total owed. Between 2016 and 2019, Metallon lost US$82m and Metallon is claiming for US$132m for the lack of profit and procurement, including interest.

One of the key issues raised by Metallon in its notice to the Governor of the RBZ and the FPR is that while the Company issued its invoices in USD, the Foreign Currency Retention Scheme saw Metallon being paid in RTGS. The disparity in the purchasing power resulted in the corporation being unable to procure machinery, equipment and operational goods at competitive prices. This seriously affected the production capacity of its various mines, leading
to huge losses and unemployment measures being taken in an already strained economy.

More than 2000 employees have lost their jobs. “The people who suffer most are Metallon employees who no longer have jobs. First, they were victims of hyper-inflation under the previous regime. And now they have lost their
livelihoods. We had no other recourse but to take decisive action,” added Khumalo.

Metallon is also suing the Zimbabwe Ministry of Mines and Mining Development for the unlawful withholding of a mining lease that was approved by the Zimbabwean Mining Affairs Board in January 2019.

FULL DOCUMENT HERE

For more information please contact:
Klara Kaczmarek
Head of Communications
Metallon Corporation
Mob: + (44) 7859 048 228

ZCDC Confirms Shooting Of Diamond Harvesters

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ZCDC Confirms Shooting Of Diamond Harvesters

The Zimbabwe Consolidated Diamonds Company, ZCDC, has confirmed that its security guards shot and killed alleged illegal diamond miners in Marange last Tuesday.

ZCDC spokesperson Sugar Chagonda confirmed the shooting in an interview on Friday.

Reports initially received from ZimEye.com sources indicated that two people were killed and over forty injured when the ZCDC guards fired at miners who had found a new diamonds deposit outside the protected concession area.
Chagonda disputed the claim saying that only one person was killed and a number he could not specify injured.

Chagonda defended the guards’ brutal act claiming that they shot the hapless miners in self-defence.

According to him, the guards were dispatched to go and clear the miners from the area by the government-owned mining company which is holding sole rights to mine diamonds in the area.

“When the guards got to the area, the illegal miners refused to disperse and armed themselves with shovels and peaks and advanced to fight the guards,” he said.

“Fearing for their lives, our guards fire three warning shots to the air but the miners who outnumbered the guards continued advancing which forced the guards to shoot at them,” he added.

Speaking in a separate interview, Director of the Centre for Natural Resource Governance Trust, Farai Maguwu claimed that the guards indeed killed two innocent people and injured forty others.

According to him, the matter was reported to Mutare Rural Police who however would not comment on the matter._ZimEye

84 artisanal miners arrested

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84 artisanal miners arrested

EIGHTY-FOUR artisanal miners have been arrested in Umguza during a police blitz on illegal mining in Matabeleland North. 

The illegal miners appeared in court on Wednesday charged with prospecting for gold without a licence.

Thirty four women and 50 men were arrested while allegedly prospecting illegally for gold at Sunace Mine, Arda in Umguza. 

The suspects could not fit in the courtroom and proceedings had to be halted while court officials and prison officers caucused on logistics on how they could all appear before the magistrate. They appeared in four groups before Bulawayo magistrate Mr Franklin Mkhwananzi who remanded them out of custody some on free bail and others on $100 bail.

Most of the accused persons came from Lupane, Umguza, Nyamandlovu, Inyathi, Bubi, Binga and Kensington. 

Magistrate Mkhwananzi gave the group’s court appearance dates from May 21 to 24, giving reasons that they were too many and could not all be dealt with in a single court room in one session. “When the group arrived in court with police officers, they could not be accommodated at the set down offices, which is the first port of call for suspects prior to court appearances. They then had to be taken to holding cells at the court.

Some of the alleged illegal miners include Nkosiyazi Moyo (23), Sipho Ndlovu (32), Ishmael Munsaka (20), Joshua Munsaka (29), Anex Ncube (18), Sikhumbuzo Ndlovu (43), Latin Nyoni (22), Sibangani Sibanda (37) and Thembinkosi Ncube (32). They all pleaded not guilty to contravening section 368(1) of the Mines and Minerals Act (prospecting for gold without a licence).

Representing the State, Mr Mufaro Mageza said on May 13 this year at around 7AM, police officers from Sauerstown were on an operation to curb illegal mining at Sunace Mine, Arda in Umguza.

He said police busted the group as 43 of them were working in the mine while the rest were having lunch a few metres away from those that were still on their shift. There were temporary settlements at the area which had belongings of the suspects, including clothes, blankets, cooking pots and mining tools. 

 The police officers found the accused persons prospecting for gold at the mine.

They were asked to produce their permits or prospecting licences and they failed leading to their arrest.

The court heard that they were found using picks, shovels and hammers which were produced in court as exhibits._The Chronicle

Govt owed US$206m in mining taxes

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Govt owed US$206m in mining taxes

Government is owed a cumulative US$206m in unpaid mining taxes and has since declared that it will soon be forfeiting claims held for speculative purposes. Mines and Mining Development Deputy Minister Polite Kambamura said Government will this month deliberate on objections made regarding the Exclusive Prospecting Orders (EPOs).

Speaking in Chinhoyi recently, Kambamura said the accumulative debt was as a result of bad attitude from mining companies reluctant to support  the Government.

“The US$206 million owed is a cumulative figure compromising of unpaid ground rentals, unpaid special grants and some are continuing to mine without paying those fees. It’s either we forfeit claims on grounds of non-payment because people are only complaining that things are tough, but it’s only a paltry US$100 per year with a mining resource, yet a gramme (of gold) is being purchased at fairly reasonable price,” he said.

Kambamura said Government would first give debtors notices before forfeiting the claims.

“We are going to forfeit on those grounds just to try and recover the owed money but will give people notices first to come forward and pay on an agreed date.

“Failure to pay we will then forfeit and follow legal channels to recover those monies because of late even if a person owed $20 000, the Government would just forfeit without following up. This time we forfeit and follow up the legal way,”  he said.

On Government’s position regarding EPO’s, Kambamura said the issue will be tabled before the mining board this month.

“We have vast pieces of land throughout the provinces set aside for exploration, as the procedure is a lot of those EPO’s were objected.

“The mining affairs board will be seating this month to consider all those objections and everyone who objected will be called to come forward and explain reasons for objections.

“Thereafter the body will make a decision whether to issue such EPO’s or not. Of late there have been some EPO’s that were applied time back and since then the owners of such did not come forward with any exploration results or reports. All such cases are going to be considered under the ‘use it or lose it’ principle going to be announced by Mines and Mining Development Minister this month,”  he said.

Kambamura also castigated some mining firms that were smuggling minerals outside the country in the disguise of reprocessing them.

President Mnangagwa has declared mining will play a major role in helping Zimbabwe achieve Middle- Income status by 2030 but areas of smuggling, under invoicing exports and corruption need to be addressed immediately._Business Weekly

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