Mining ZimbabweLatest Mining News, Policy and Industry Updates

Government is working on various policies to ensure sustainable electricity supply in the long-term after securing a deal from Mozambique’s Hydroelectrica de Cahora Bassa (HCB) of Mozambique for the supply of 100MW.

This came out during the presentation of the 34th Cabinet Decision Making Matrix by Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa yesterday.

Energy and Power Development Minister Fortune Chasi briefed Cabinet on the deal.

“The Minister of Energy and Power Development informed Cabinet that he had recently concluded an agreement with the Mozambican authorities for the supply of an additional 100 megawatts from Hydroelectrica de Cahora Bassa of Mozambique,” she said. 

“This, together with ongoing rehabilitation of the existing small thermal power stations, should further consolidate the already improved electricity supply situation in the country. 

“The improvement should be reinforced by the institution of a cost reflective tariff system, improved operational efficiencies at Zesa, and effective demand-side management measures. The Ministry of Energy and Power Development is already seized with these issues.”

Minister Chasi said Government was committed to reliable long-term availability of electricity.

“Our plan is to be sustainable with regards to the power connection. We are doing many things like reviewing the policy framework, reviewing the legal framework, working on hydroelectric projects and other renewables.

“We are also working on managing demand because we will be able to save significant amounts of power through managing demand and improving generation but we are going to have a very serious thrust on demand management,” said Minister Chasi.

He said Government was also reviewing the legal framework in terms of sentences imposed on those convicted for damaging electricity supply infrastructure.

Turning to fuel prices, Minister Chasi defended the current weekly increases saying any huge increment on the price of the commodity would affect businesses_The Chroicle

Miners in Mutasa are being stopped to mine by farmers on the disguise that there is no miner-farmer consent yet, however the famers will eventually start mining without any mining claim or permission from relevant authorities in the end leaving the land in complete distress, Mining Zimbabwe has learnt.

Rudairo Mapuranga

According to some concerned miners who spoke to Mining Zimbabwe, farmers specifically war veterans are abusing their position in the society by grabbing mining claims near their farms asserting that the mining operations are jeopardizing their farming activities.

These farmers are also alleged to be turning their farms into mines without seeking permission from the Ministry of Mines and Mining Developments.

“Farmers are turning their farms into mines without seeking permission from the Ministry of Mines and miners are being stopped by farmers contesting that mining operations are a hindrance to their farming practices”, said one miner.

Mining Zimbabwe has learnt from miners that it is becoming difficult for miners to get a letter of consent from farm owners since the farmers will be eyeing to take over the mining concession from the miner.

“It is very hard for miners to get a letter of consent from farm owners to be allowed to get a license on a farm of less than 100ha”, they said.

The miners are henceforth pleading to the relevant authorities to come on board and take control of the  situation.

Miners are continuously contesting that unsafe mining methods that are being used by farmers thwart the gold production process, resultantly increasing the rate of gold leakages.

“We wonder were the gold task force, police, EMA, Ministry of Mines , and Mutasa rural district council are when there is a lot of gold leakages and land degradation going on”, they said.

The miners continued to say that even though they sought for justice on several occasions, their efforts have not been recognised since these farmers have not been prosecuted.

“Is our law there to protect certain individuals, these farmers are not being arrested yet misconducts are taking place in broad day light”, they said.

IT is business as usual for miners as their payment system is not affected by the recently introduced SI213 of 2019.

This past Saturday government introduces a law that pricing of goods and services in foreign currency is now illegal and heavy penalties will be imposed to defaulters. This comes after Statutory Instrument, SI212 of 2019 which banned the use of foreign currency in any local transactions was gazetted.

This move is to curb the use of pegging local prices with the US$ as it is seen to be fueling price hikes.

According to the SI 213 of 2019, it is now illegal to sell goods or services in USD or any other currency except ZWL, it is also illegal to quote prices in foreign currency, to display for sale in foreign currency, to receipt in foreign currency and to value or denominate in anything other than ZWL.

SI 213 of 2019 Document in Full

ZIMBABWE is losing about US$400 million annually through importing steel and related products since the collapse of Zisco in the last decade, Industry and Commerce Minister, Mangaliso Ndlovu, has said.

Addressing delegates at the Employers’ Confederation of Zimbabwe (Emcoz) annual congress in Bulawayo yesterday, Minister Ndlovu said urgent steps were needed in investing and developing anchor industries for strategic sectors. 

The country’s largest steel manufacturing company, Zisco, shut down operations in 2008 at the height of hyperinflation. “Ziscosteel is very important to the economy of Bulawayo. So, our steel manufacturing has to come first. Since the demise of Ziscosteel, on average we are importing up to US$400 million worth of steel and steel products,” said Minister Ndlovu.

He said due to Zisco’s closure, the foundries that existed in Bulawayo and the country at large were lying idle as Zimbabwe relies on imported raw materials. “It’s important that we focus on developing anchor industries from which other industries will be developed or revived,” the Minister said.

To foster the growth and development of anchor industries, Minister Ndlovu highlighted the need for Government to give appropriate fiscal incentives that would propel economic growth. He said such incentives should not be given willy-nilly but based on the direct linkage to the benefit that anchor industries would bring in driving economic growth.

“We want to isolate value chains that can give us greater value particularly when it comes to import substitution, exports and employment creation then we can discuss how best to support these value chains,” Minister Ndlovu said. 

“Value chain development is very important towards development of anchor industries.”

The Minister said implementation of the Special Economic Zones (SEZs) concept in designated areas across the country was underway. “Under the SEZs, investors are still to fully tap into the benefits that are coming with this programme,” he said.

In the 2019 mid-term monetary policy statement, Finance and Economic Development Minister Professor Mthuli Ncube said non-exporting firms will not be entitled to benefit from tax incentives under SEZs unless they met conditions prescribed in the Income Tax Act. Government has availed a number of tax incentives under the SEZs model for the benefit of companies engaged in export-oriented industrial operations. Some of the tax incentives to be enjoyed by firms operating under SEZs include; exemption for the first five years of operation and a corporate tax rate of 15 percent applicable thereafter, non-residents withholding tax on fees, and non-residents withholding tax on dividends.

Prof Ncube said from the foregoing, mining houses and other companies that produce for the domestic market cannot benefit from tax incentives under SEZs.

In addition to ensuring conformity to the constitutionally enshrined principles of fair taxation and for purposes of transparency and accountability, the Finance and Economic Development Minister said tax incentives shall be solely promulgated through the relevant tax legislation_The Chronicle

Zimbabwe coal miner, Makomo Resources is reportedly  getting  only about 50 percent of its foreign currency which it require to import critical inputs like spares, a situation that has crippled its production, an official has revealed.

The country is failing to keep its foreign currency reserves afloat despite the establishment of the interbank market early this year to address the situation.

About US$799 million worth of foreign currency has been traded on the interbank market since its introduction in February this year.

“We are facing foreign currency challenges and as a result, our production so far has been subdued,” Makomo MD Robert Mutokonyi said.

“If things continue at this rate, our end of year outlook is disastrous.

“Our monthly forex requirement is US$2,5 million, but we have been getting 50% down our requirements, something which has negatively affected us.

“If we could get US$2,5 million that we require, we can do absolutely well.

“We have got the capacity to produce; we are only hampered by cash challenges.”

Makomo has an installed capacity of 350 000 tonnes per month, which remains under-utilised.

Mutokonyi, however, could not be drawn to disclose the company’s production figures so far.

But recently he revealed that their production in the first quarter of the year remained subdued, with output only reaching half of the company’s target due to the unavailability of key raw materials.

He said their target was between 200 000 tonnes and 250 000 tonnes a month, but they only managed almost 50% of that in the quarter.

In the period under review, the company faced operational challenges, especially the high cost of production versus the price of coal and unavailability of key raw materials like diesel and explosives, which are being imported.

Mutokonyi said by now they should have produced enough stock in preparation for the rainy season, but they were struggling to do that due to foreign currency challenges to import spare parts.

Makomo Resources is the largest privately-owned coal producer in Zimbabwe, and it supplies the country’s thermal power stations, industrial and agricultural sectors.

NewsDay

ON Saturday the whole nation woke up to the news that pricing of goods and services in foreign currency is now illegal and heavy penalties will be imposed to defaulters. This comes after Statutory Instrument, SI212 of 2019 which banned the use of foreign currency in any local transactions was gazetted.

By Rudairo Mapuranga

What does this mean to the miners?

According to the SI 213 of 2019, it is now illegal to sell goods or services in USD or any other currency except ZWL, it is also illegal to quote prices in foreign currency, to display for sale in foreign currency, to receipt in foreign currency and to value or denominate in anything other than ZWL.

The Statutory Instrument 213 of 2019 like the previous one is not going to affect RBZ foreign currency retention to exporters of 55 per cent foreign currency and 45 per cent local currency in case of gold and 50/50 for other minerals.

The SI213 of 2019 also gave leverage to licensed fuel stations to sell their fuel in foreign currency without any hindrances from the government and law enforcement agents.

However, although miners are still getting their foreign currency retention threshold from the Apex Bank, the introduction of the SI213 comes with many problems that need to be treated with urgency. Mining Equipment suppliers have been quoting their equipment and services prices in the USD and miners would pay in RTGS equivalent using the interbank rate.

According to Norton Miners Association chairperson Privilege Moyo, the move by the RBZ will likely increase operational costs.

“It means suppliers won’t be allowed to peg in USD because it would lead them to sell in USD. But they will peg in local currency at maybe twice the interbank rate which then will definitely affect business because they will need to hedge against ever-changing exchange rates on the parallel market” said Moyo.

Moyo also said that the government now should, therefore, consider giving miners up to 90 per cent foreign currency retention to keep the miners in business because mining operational costs require up to 90 per cent foreign currency. If the equipment suppliers are not allowed to quote prices in foreign currency it means they will just quote in any amount slightly above the interbank rate which makes equipment more expensive.

“Operational costs are going to be higher and profit margin very low to none to small scale miners,” Moyo said.

Some miner also expressed concern over the gazetted SI 213 of 2019 saying that it promotes leakages and loss of foreign currency to other countries since it will be cheaper for miners to buy everything they need on their mine from abroad than in Zimbabwe which literally will kill business in Zimbabwe.

 SI 213 of 2019 Document in Full