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Gold faces worst month in eight; palladium recovers

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Gold faces worst month in eight; palladium recovers

Gold steadied on Friday, but was headed for its worst month since August 2018 predominantly on stronger dollar and equities, while palladium bounced back after three straight sessions of sharp selloffs.

Spot gold was flat at $1,290.34 per ounce by 0620 GMT, after declining about 1.5 percent in the previous session, the most in over seven months.

The metal is set for its first weekly fall in four and has lost about 1.7 percent this month. But on a quarterly basis, gold is on path for a second straight rise, due to a dovish U.S. Federal Reserve and concerns about a global economic slowdown.

U.S. gold futures were down 0.1 percent at $1,288.70 an ounce.

The dollar was poised for its strongest monthly gain in five, while Asian shares rose on hopes that Washington and Beijing are making progress in trade talks.

The world’s two largest economies started the new round of talks on Thursday to end the year-long tit-for-tat tariffs war.

“If we have a positive outcome from the trade talks, gold will be under pressure as investors will rotate out into more risk seeking assets,” said Jeffrey Halley, a senior market analyst with OANDA.

“But, if we have disappointing outcome then stocks will go down and people will move into safe-haven assets like gold. The market is very much in a wait and see mode.”

White House economic adviser Larry Kudlow said on Thursday the United States could lift some tariffs on China, while leaving others in place as part of an enforcement mechanism on a trade deal.

Meanwhile, spot palladium rose 0.7 percent to $1,357.68 an ounce on Friday, recovering from a two-month low touched in the previous session.

The metal, used in the making of catalytic converters in vehicles, slid 6.6 percent on Thursday, the most since January 2017, and was set for its worst week since November 2015, as worries about a slowdown in global economic growth triggered a sharp sell-off.

On a monthly basis, it was headed for its biggest drop since end-2016.

“Negative market sentiment due to slowing economic growth triggered speculative selling in palladium,” ANZ analysts said in a note.

Elsewhere, silver was flat at $15.02 an ounce, while platinum rose about 0.5 percent to $841 an ounce. (Reporting by K. Sathya Narayanan and Swati Verma in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)_Reuters

Miners takes Mugabe to court

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Miners takes Mugabe to court

Former President Robert Mugabe’s family business, Gushungo Holdings (Pvt) Ltd, has been dragged to court by two Mazowe miners, who are seeking an order to reinstate their dismissed land dispute with the former Head of State.

The gold miners, Shepherd Nyazvigo, who is represented by Phillip Makanya in the matter together with his co-applicant, Bright Mawonga, recently filed a court application, seeking rescission of a default judgment granted against them in November last year.

“In this application, the applicants (Makanya and Mawonga) are seeking an order to set aside the dismissal of their application which was done in default on November 12, 2018 and reinstatement of the terms of the provisional order,” Makanya said in his founding affidavit.

According to the court papers, Makanya got embroiled in a dispute with Gushungo Holdings after the latter, through its employees, barred them from accessing the mining claims at Mondo 3 and 4 in Smithfield Farm in Mazowe.

At that time Mugabe’s firm was claiming ownership of the farm where the mining claims are located, hence it was barring the two miners from accessing and operating on their mining claims.

However, on April 24, 2018, the two miners were granted a provisional order by the High Court, in terms of which Gushungo Holdings was barred from interfering with the two men’s mining operations pending the finalisation of the dispute.

But, seven months down the line, Makanya and Mawonga did not pursue their matter, prompting Gushungo Holdings to approach the court seeking dismissal of the miners’ application and it was granted in default.

“The application was then dismissed in default of the applicants on November 12, 2018. I submit that the applicants were never served with the set down date, hence they were not aware of the hearing date,” Makanya said.

“It is the applicant’s intention to pursue their application so that the final order can be confirmed. The applicants, as the holders of the rights and title to the said blocks of mine, have the right to mine on their blocks of mine without any interference from anyone including the respondent (Gushungo Holdings).

The matter is pending._NewsDay

Prospect Resources eyes rechargeable batteries market

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Prospect Resources eyes rechargeable batteries market

AUSTRALIA Stock Exchange (ASX) listed Zimbabwe lithium producer Prospect Resources, says it is well positioned to tap the rechargeable batteries market whose share of the lithium batteries market is projected to sky-rocket from the current 54 percent to 86 percent by 2025.

Prospect is developing Zimbabwe’s foremost electric vehicle batteries lithium project at Arcadia, about 38 kilometres east of the Capital Harare, which will see US$163 million being invested in the first phase of the project.

The lithium miner has already commenced plant construction following the ground breaking event for the lithium project officiated by President Mnangagwa in January this year.

The company said in a presentation to investors that the rechargeable batteries market was expected to increasingly dominate demand for lithium between 2018 and 2025.

“Prospect is positioned to supply this market with its battery grade petalite and spodumene concentrates,” said Prospect. The ASX listed company said its low iron petalite was also good for ceramics and glass production.

Prospect’s Arcadia project is expected to start production by mid 2020. The ASX listed firm has also successfully built a pilot lithium carbonate plant in Kwekwe.

The Arcadia project has a 26,9 million lithium ore reserve and an estimated lithium resource of 43,2 million. The project has an average life of mine of 12 years.

Zimbabwe is currently the world’s fifth largest producer through the only producing lithium mine at the moment, Bikita Minerals, but will assume higher ranking once production at the Arcadia project roars into life.

Other developing lithium project include Jimbata’s US$1,4 billion tailing project in Kamativi and Premier African Minerals Zulu lithium project located near Bulawayo.

Lithium demand

Lithium Demand is expected to grow at 22 percent per annum until 2025. This equates to demand more than tripling over the next 6 years.

The supply/demand for fit-for-purpose lithium is expected to move into deficit in 2020. By 2024, the supply deficit is expected to total the 2019 total risk-adjusted supply.

Government support

Prospect said it had obtained a US$10 million export finance facility from Reserve Bank of Zimbabwe, which is on a drive to grow export receipts into the country.

The prospective lithium miner has also secured national project and Special Economic Zone status for the Arcadia project, whose grounding breaking was officiated by President Mnangagwa, testimony of Government support.

Zimbabwe is currently the 5th largest producer of lithium globally, with Zimbabwe’s total mining industry currently exporting over US$2,4 billion per annum.

Fiscal and monetary policy reforms position Zimbabwe for economic recovery, underpinned by foreign investment, said Prospect Resources.

Infrastructure

With regard to infrastructure, Prospect said its mine is located close to a 33KVA interconnection with secured capacity (3km’s from site), where there is surplus groundwater available. The mine is close to skilled and semi-skilled labour (35km from the Capital city, Harare).

Logistically, the mine is along an established transport and port infrastructure. The closest sea port, Beira in Mozambique is only 580 kilometres away by heavy haulage capable roads.

The mine will have access to available bulk loading facilities. Total port throughput is approximately 1,36 million tonnes per annum._Business Weekly

Zim to explore previously untapped high value minerals

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Zim to explore previously untapped high value minerals

GOVERNMENT is moving to explore and expand the exploitation of the country’s previously untapped high value minerals including lithium and manganese that are driving the current world technology revolution.

This comes as 60 percent of the country remains unexplored amid progressive discoveries that have put Zimbabwe on a better footing for economic development if fully exploited.

In an interview, Mines and Mining Development Deputy Minister Polite Kambamura, said there was need for expansive exploration of the country to consolidate and complement minerals such as gold and platinum.

“The country is endowed with a large number of minerals. 40 percent of Zimbabwe is explored and 60 percent remains virgin and as a result there are new minerals that are coming on the market that we were not utilising all these years,” said Dep Minister Kambamura.

“Minerals like lithium are coming on the market because of the invention of electric batteries in Western, Eastern countries and developed nations. They are doing away with internal combustion engines.”

Lithium fetches about $17 000 per tonne on the world market. Bikita Minerals has been mining lithium over the years but it was largely untapped until recently when Arcadia Lithium Project in Goromonzi was commissioned.

“There is need for further exploration for ithium, small minerals but of high value like manganese and magnesium which are being used in modern technology,”  he said.

Lithium is considered one of the lightest metals and is used in clean energy technology especially in batteries used in the electric gadgets and emerging electric cars. Cells in the batteries carry a lithium positive cathode and graphite as the negative anode. Its demand in countries such as China that are progressively phasing out conventional vehicles in favour of zero emission technologies, is growing.

Zimbabwe is the third largest producer of lithium in Africa and eighth in the world.

Realising the importance of the mineral, the Zimbabwe Special Economic Zones Authority (Zimseza), has granted Prospect Resources’ Arcadia Lithium Project Special Economic Zone (SEZ) status.

The status comes with favourable regulations and incentives that differ from other areas in the same country. This is expected to increase investment and facilitate Ease of Doing Business. Prospects for exports are being explored for the Australian market._Business Weekly

Hwange plans to repossess properties from defaulting debtors

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Hwange plans to repossess properties from defaulting debtors

HWANGE Colliery Company Limited (HCCL), which is under reconstruction, plans to repossess residential and commercial properties from defaulting debtors.

In a statement yesterday, the Matabeleland North-based coal miner said it has exhausted all forms of engagements with the defaulting tenants.

“Hwange Colliery Company Limited (HCCL) intends to repossess its residential and commercial properties from defaulting tenants. The organisation has exhausted all forms of engagements namely:

“Individual engagements of tenants for debt settlement arrangements, issuing of 14 days notice to remedy breach, and serving three calendar month notices of eviction to tenants who have failed to honour the above forms of engagements,” said the company’s acting managing director, Dr Charles Zinyemba.

“As a last resort, the organisation has resolved to repossess all underperforming properties.”

Following the intention to repossess the properties, all defaulting debtors were therefore, advised to regularise their accounts on or before April 30, 2019 or risk losing the properties.

Last year, the Government, which owns a 52 percent stake in HCCL, put the colliery under reconstruction in a bid to set it on a recovery path as well as turning it into profitability.

The company is heavily indebted and owes the Government in excess of US$150 million, with its liabilities outweighing the value of its assets.

HCCL, which has been performing badly for several years, has been changing management regularly but that has not translated into a turn of fortunes for the company. 

The firm has a legacy debt of $352 million, and had entered into a Scheme of Arrangement with creditors.

Justice, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi appointed an administrator, Mr Bekithemba Moyo, together with two assistants.

The reconstruction order was made in terms of Section 4 of the Reconstruction of State-Indebted Insolvent Companies Act (Chapter 24: 27) (No. 27 of 2004).

Companies going through reconstruction shall be under the control and management of the administrator, and boards of such companies shall be divested of the control and management of the companies’ affairs._The Chronicle

Madagascar emerging as global hub for battery-suitable graphite

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Madagascar emerging as global hub for battery-suitable graphite

If you haven’t seen the popular animated film franchise, you’d be forgiven for not knowing much about Madagascar, but that could be changing very soon. Graphite, as one of the most conductive materials, is set to be key to our sustainable future, and recent exploration in Southern Madagascar has identified the Ampanihy structure zone as what could soon become a global hub of battery-suitable graphite.

In a recent interview with Investing News Network, Simon Moores, Managing Director at Benchmark Minerals Intelligence, was notably bullish on the graphite market and forewarned investors to look beyond basic commodity prices.

Graphite is the number one raw input material into a lithium-ion battery — Simon Moores, Managing Director at Benchmark Minerals Intelligence

“Graphite is the number one raw input material into a lithium-ion battery,” said Moores.

“The order of graphite needed in these megafactories is in the millions of tonnes. At the moment, the anode space is about 165,000 tonnes per year but you’re going to need well over 1.6 million tonnes per year by 2030 if all these plans come on stream.

“That’s an incredible amount of anode material and you have to ask, where is it going to be coming from?”

One source of this battery-suitable graphite is going to be Madagascar where the Ampanihy structure zone hosts three major graphite projects which contain the right type to be used for battery anodes.

Within the zone lies NextSource Materials’ (TSX: NEXT) Molo graphite deposit, which contains an exploration target in 141.28 million tonnes at 6.13% total graphitic carbon (TGC). With the project having garnered global attention from battery manufacturers already, a 10 year offtake agreement was signed in 2018 with a prominent Japanese graphite trading company for use in battery anode applications and electrical vehicles.

What has made the Ampanihy structure zone of even greater significance, however, are the two project exploration targets announced over the past 9 months.

Most recently, BlackEarth Minerals (ASX: BEM) announced a 20-34 million tonne exploration target at 10-20% TGC at their Ianapera graphite project, which is located just 10km north of Molo. This target significantly increased BlackEarth’s assets within the zone where the company announced a 260-380mT exploration target at 6-8% TGC at their Maniry graphite project located 60km south of Molo.

Whilst BlackEarth Minerals is yet to join their Canadian counterparts in announcing offtake agreements, their sizeable assets will propel Southern Madagascar as a world-class hub for battery-suitable graphite, which will be crucial to meeting major demand increases in coming years._Reach Markets

South African mining charter challenge dents Ramaphosa plans

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South African mining charter challenge dents Ramaphosa plans

South African mining companies are challenging parts of a government charter aimed at redistributing the country’s mineral wealth, saying it will deter new investment in the industry.

The charter is in breach of a court order issued last April, which ruled that previous versions of the regulations didn’t require miners to top up black-shareholding levels if they previously met a minimum 26 percent requirement, the Minerals Council South Africa said on Wednesday.

The charter, first introduced in 2004, is aimed at distributing the benefits from mining more widely among South Africans to make up for racial discrimination during apartheid“The charter does not fully recognize the continuing consequences of previous empowerment transactions, particularly in respect of mining-right renewals and transfers of these rights,” said Roger Baxter, chief executive officer of the lobby group representing companies including Anglo American Plc and Impala Platinum Holdings Ltd.

The move is a setback for South Africa’s President Cyril Ramaphosa, who has said he will encourage investment by removing policy uncertainty and cracking down on the corruption and government inefficiency that characterized the rule of his predecessor Jacob Zuma. The charter, first introduced in 2004, is aimed at distributing the benefits from mining more widely among South Africans to make up for racial discrimination during apartheid.

Producer frustration

Department of Mineral Resources Minister Gwede Mantashe finalized new mining rules for the sector last year in a bid to ease investor uncertainty. The regulations became a point of increasing frustration for producers under Mantashe’s predecessor, Mosebenzi Zwane, whose own version drew furious resistance and legal challenges.

The council has filed an application for the judicial review and setting aside of certain clauses the charter. Mining companies were obliged to make the challenge now as a 180-day period for discussions is about to run out, said Sibanye Gold Ltd. CEO Neal Froneman.

”It’s not hostile, this is business, making sure we cover our bases legally,” Froneman said in Johannesburg. “We were hoping that Gwede Mantashe omits those things we don’t agree with.”

While it will oppose the mining companies’ challenge, the Department of Mineral Resources said it would urge them to continue negotiations toward an amicable solution. Delays in implementing the new rules would hurt investment and the “realization of much-needed benefits for the workers and mining communities,” it said.

The latest version of the charter requires South African mining companies to give out 5 percent free-carry stakes in projects to communities and an additional 5 percent to employees_Bloomberg News

Firestone Diamonds halts Liqhobong mine expansion plans

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Firestone Diamonds halts Liqhobong mine expansion plans

Africa-focused Firestone Diamonds (LON:FDI) has put plans to extend the life of its 75%-owned Liqhobong mine in Lesotho on the back burner, saying that current market conditions don’t support the project.

The company, which reported 2019 interim results on Thursday, managed to limit its losses in the six months to December 31, 2018, despite a global price slump for smaller, lower-value diamonds.

Firestone lost $6.6 million in the period, or 1.3c per share, compared to a loss of $7.8 million, or 2.2c per share, in the first half of the 2018 financial year.

Higher production and average grade per carat from Liqhobong — 465,680 compared to 379,716 carats in 2018 — help shore up finances, though prices for its low-end diamonds and a $2.2 million charge ultimately weighed on the bottom line.

Diamond miners are struggling across the board, especially those producing cheaper and smaller stones where there is too much supply. In December, some of Rio Tinto’s (LON, ASX: RIO) customers refused to buy cheaper diamonds, while De Beers has been forced to cut prices and offer concessions to buyers.

Firestone spent $185 million building Liqhobong, which started production in late 2016, and boasts over 11 million carats in reserve. The total open pit resource contains over 17 million carats to a depth of 393 metres._Mining.com

AngloGold to go ahead with underground expansion of Tropicana

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AngloGold to go ahead with underground expansion of Tropicana

Joint venture partners AngloGold Ashanti (JSE:ANG) (NYSE:AU) and Independence Group (IGO) have approved $79.3 million underground expansion at their Tropicana gold mine in Western Australia.

The project, dubbed the Boston Shaker, is expected to contribute higher-grade mill feed, resulting in an improved gold production profile and enhanced cash flow.

Once the underground portion is operative, Tropicana — located 200km east of Sunrise Dam and 330km east-northeast of Kalgoorlie — will be able to maintain gold production at between 450,000-500,000 ounces annually over the five years to and including the 2023 financial year.

The Boston Shaker extension is expected to contribute an annual average of 100,000 ounces to Tropicana’s production profile from the 2021 financial year.Boston Shaker is expected to contribute around 100,000 ounces a year, with first gold expected during the September 2020 quarter. The feasibility study estimated a capital cost for the project of A$105 million, higher than the $95 million estimated in December.

“Underground mining at Boston Shaker will leverage further value from this high performing operation, achieving pay-back in just over three years,” Ludwig Eybers, AngloGold Ashanti’s Chief Operating Officer International, said in the statement.

The Boston Shaker ore body remains open at depth and the JV partners will continue to test high grade extensions to the mineral resource beneath the Tropicana and Havana pits to assess the opportunity for further underground mining operations, they said.

Macmahon Holdings has been awarded a five-year, $170 million mining services contract for the underground mine. The work adds to the supplier’s existing agreement at Tropicana, which is already the site of the company’s largest mining contract in Australia.

AngloGold, now under the leadership of Kelvin Dushnisky, a Barrick Gold veteran, looks very different from four years ago. The company has become increasingly global, with only about 13% of its output from South Africa after selling mines to stem losses in the country. That’s down from 43% in 2007.

AngloGold’s other mines stretch from Australia to Argentina and Ghana, and the company owns 70% of Tropicana while Independence Group NL holds the rest._Mining.com

Bell tolls for gold mine that once powered South African economy

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Bell tolls for gold mine that once powered South African economy

The final demise of South Africa’s gold industry came a step nearer on Wednesday with the announcement that Sibanye Gold Ltd. won’t extend the life of Driefontein, once the biggest mine on the continent.

Last year the mine, more than 2 miles (3,200 meters) deep, produced about 300,000 ounces of gold, just a fifth of its peak output two decades ago. Now Sibanye will wind down Driefontein’s operations within 10 years, with plans to cut thousands of jobs as it shuts unprofitable shafts.

Driefontein used to be the heartbeat of mining, but that was many many years ago

South Africa’s gold industry employs just over 100,000 people, less than a fifth of the number that used to drive the apartheid economy. With most of the nation’s gold operations unprofitable, more job cuts are inevitable. Moreover, the geological challenges faced by the world’s deepest mines saw fatalities at Sibanye’s gold operations soar last year.

“Driefontein used to be the heartbeat of mining, but that was many many years ago,” said Rene Hochreiter, an analyst at Noah Capital Markets Ltd. in Johannesburg. “Below 3,000 meters you are not going to make money and you probably end up killing a lot of people.”

Sibanye Chief Executive Officer Neal Froneman said the investment climate in South Africa isn’t “conducive” to spending billions of rand to deepen Driefontein further and extend its life.

Mined out

“To all intents and purposes, Driefontein is mined out,” said Froneman, who will consider opportunities to expand in gold outside South Africa.

The mine, acquired from Gold Fields Ltd. in 2013, has also been crippled by a wage strike over the past four months.

“It came as a bit of a surprise, I didn’t anticipate Driefontein nearing its end,” said Bernard Swanepoel, a former CEO of Harmony Gold Mining Co. “It’s an old lady, a grand old lady, it’s been around for a long time.”_Bloomberg News

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