Category archives for: Mining

Zimbabwe: Mining Firm to Release Chrome Claims to Govt

ZIMASCO is to release a further 1 000 hectares (ha) of chrome claims to government after failing to comply with a State directive last year to cede half of its 49 000ha resource to the State, official reports indicated this week.

The released land was earmarked for distribution to indigenous Zimbabweans in line with directives by the Ministry of Mines and Mining Development to broaden the participation of locals in the chrome sub sector.

Writing in an internal publication, Mines and Mining Development Minister, Walter Chidhakwa, said Zimasco last year released 21 270ha out of the 22 270ha that it had been asked to release to the State, which was 1 000ha less.

He said government had asked Zimasco to release more land.

Zimasco, which is controlled by Chinese investors, together with ZimAlloys, controlled 80 percent of the country’s chrome reserves before the surrender of ground by Zimasco.

Under the Indigenisation and Economic Empowerment policy, government said it wanted to make sure that the ceded claims would be handed over to small scale miners, special interest groups and individuals.

War veterans, women’s groups and youths would be among the beneficiaries.

A total of 22 746ha would be required, according to Chidhakwa, who wrote in a special chrome edition of Mineral Beneficiation & Value Addition for the first quarter of 2017.

Zimasco controlled 49 000ha of claims across the country before giving up some of its claims.

Discussions with the two ferrochrome giants, which are said to be holding more ground than what their 50-year operation plans are projecting, have been ongoing for the past two years.

But while Zimasco agreed to release claims, Chidhakwa said negotiations with ZimAlloys, a firm that is controlled by Zimbabwean investors, were still ongoing.

“Discussions with Zimasco are complete as all the final agreements have been reached and 50 percent of their claims have been handed over to government,” he said.

“It is noted that this figure is 1 000 hectares short of the original 22 270ha earmarked for distribution. This is being addressed through the ground truthing exercise… to ensure that Zimasco complies with the agreed relinquishment of 50 percent of its total claims. In view of this, government is going to distribute the chrome mining claims released by Zimasco. Zimasco released 21 270ha. In Mashonaland Central it released (9 643 ha), Mashonaland West (2 390ha), Midlands (8 563ha) and Masvingo (674ha).

“However, discussions with ZimAlloys are still ongoing and we anticipate reaching an agreement shortly,” he added.

Chidhakwa said Zimbabwe had the second largest chrome deposits in the world. However, for a very long time, over 80 percent of these deposits had been held by Zimasco and ZimAlloys.

“The Zimbabwean nationals interested in the chrome industry participated only as tributors to these two multinational companies and other small companies that have recently entered the sub sector. In order to broaden the indigenisation in the chrome sector and empowering Zimbabwean citizens to create more employment, the government directed that 50 percent of the claims held by Zimasco and ZimAlloys must be released and made available to other players to ensure wider inclusion of indigenous players in the chrome sector,” he said.

He said the Ministry of Mines and Mining Development had therefore been discussing with Zimasco and ZimAlloys for the release of some of their claims.

“Government also took note of the need to generate much needed revenue for the fiscus by putting idle claims to use after noting that Zimasco and ZimAlloys, from their 50-year plans, possessed vast tracts of land they would still have in their possession,” said Chidhakwa.

The new report comes as Midlands Provincial Affairs Minister, Jason Machaya, has said the bulk of the claims ceded by Zimasco to the State were exhausted.

He promised to take action against the mining giant.

Tanzania: Extraction of Uranium in Bahi to Start Early Next Year

Photo: Daily News

(file photo).

By Valentine Oforo

Extraction of uranium in Bahi District in Dodoma Region will start soon after Geological Survey of Tanzania finalises surveying the area in December.

This was revealed in the Parliament on Friday morning by deputy minister for Energy and Minerals Dr Medard Kalemani, when responding to a supplementary question from Special Seat Member of Parliament, Ms Josephine Genzabuke (CCM).

Ms Genzabuke wanted to know why the extraction of uranium hasn’t started.

The deputy minister reiterated that the government will take all safety precaution to make sure that the extraction of the mineral wouldn’t affect wananchi health and environmentw.

Tanzania

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Zimbabwe: Central Bank Bails Out Mines From Tobacco Sales

By Shame Makoshori

PAYMENTS to mining industry’s foreign suppliers have improved since the tobacco marketing season kicked off in February, according to industry sources.

This comes after the sector lurched into crisis due to failure to pay foreign suppliers as a result of foreign currency shortages which worsened at the end of last year after the introduction of bond notes by the Reserve Bank of Zimbabwe to fund export incentives.

Imported raw materials in other industries have also run out.

In the mining industry, inputs like explosives and other critical supplies have been difficult to purchase as suppliers have been demanding cash up front.

Payment backlogs had extended to about four months. And even though the situation remains volatile, sources said there had been an improvement.

CoMZ chief executive officer, Isaac Kwesu, was not available for comment.

Over US$200 million has so far been generated by tobacco since auction floors opened in February.

While the crisis remains, with long queues in banks, foreign cash holdings by local banks, which fund imports, were reported to be improving.

“There has been a marked improvement since the tobacco selling season started. This tobacco marketing season is usually good for the country,” an executive said, noting that problems usually start after the marketing season.

He said the injection of US$100 million by the central bank to ease the foreign currency crisis last week would help ease payment problems.

Foreign suppliers discontinued credit facilities to Zimbabwean customers following the emergence of payment problems late last year, which worsened at the beginning of this year.

The CoMZ last year wrote to the RBZ, pleading with the central bank to act on international payments.

Mining industry revenue averages US$2 billion per year and contributes the bulk of liquidity in the country.

Under the RBZ’s foreign currency allocation priority list introduced last year, exporters who import raw materials and industrial machinery to boost exports are supposed to get preference ahead of importers of luxuries such as cell phones and other goods.

Non-exporting importers of raw materials and machinery for local production or value addition are also supposed to be on top of the list, provided the raw materials are not available locally and their products support import substitution.

C&M reported recently that the world’s largest airlines had started tightening screws on Zimbabwe owing to the worsening foreign currency crisis that had resulted in a huge backlog of unremitted payments for local ticket sales, with some now outstanding for over five months.

At least five global airlines namely Qantas Airways, Lufthansa, KLM Royal Dutch Airlines, Air France and Delta Airlines have informed their travel agents that they have to bill their passengers in cash or stop accepting bookings altogether to avoid non-settlement of obligations from Zimbabwe’s banks, which are battling an acute shortage of foreign currency.

The RBZ said last week airlines would be among those prioritised for payment on the US$100 million facility.

Zimbabwe

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Zimbabwe: Did Minerals Marketing Bosses Award Themselves Unapproved Allowances?

By Fungai Lupande

Minerals Marketing Corporation of Zimbabwe (MMCZ) acting general manager Richard Chingodza yesterday alleged that there was bad blood between him and Mines and Mining Development Secretary Professor Francis Gudyanga.

He said the antagonism emanated from the fact that both were eyeing the same position of general manager of the organisation.

Chingodza (41) said Prof Gudyanga maliciously cooked up allegations against him because he wanted to become the general manager of the corporation, but was disqualified due to his old age.

The court heard that the previous board had recommended Chingodza for the post.

Prof Gudyanga denied the allegations, saying he was not a marketing person and his interest could have been at the Zimbabwe Mining Development Corporation because he was into metallurgy.

Prof Gudyanga is the complainant in the fraud against Chingodza and the company’s acting deputy general manager (finance and administration) Hannan Tongai Chitate (35).

The pair is accused of swindling MMCZ of $625 226, 88 after awarding themselves unapproved allowances.

Chingodza’s lawyer Mr Oliver Marwa accused Prof Gudyanga of pining his client to cover himself up.

“You are doing the opposite yourself, painting me in the negative and as the devil to try and exonerate your client,” replied Prof Gudyanga.

Mr Marwa told the court that Prof Gudyanga demanded an apology from Chingodza after he was grilled by a parliamentary portfolio committee on why several personnel were not on substantive positions at the corporation.

Prof Gudyanga said he did not request such an apology.

Mr Marwa accused Prof Gudyanga of running the corporation without a budget during his tenure.

“MMCZ was due to be transformed into the Mineral Exploration and Marketing Corporation and it was inappropriate that a budget was approved,” responded Prof Gudyanga.

Mr Marwa inquired whether or not the corporation declared $1, 7 million dividends to the ministry in 2015.

“You wanted to disguise an improper movement of money?” said Mr Marwa.

Prof Gudyanga said what was described as dividends were normal expenses.

“Chingodza was responsible for classifying dividends and normal expenses,” he said.

“The classification was later corrected.”

Harare magistrate Mr Elijah Makomo adjourned trial to allow Chingodza to mourn his grandmother who died recently.

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Tanzania: Gold Regains Status As Tanzania’s Top Export

Photo: Agnico-Eagle – Agnico-Eagle Mines Limited/Wikipedia

Gold is commonly formed into bars for use in monetary exchange (file photo).

Dar es Salaam — Gold has regained its prestigious position as Tanzania’s largest non-traditional goods export, thanks to a rise in value at the global market, the central bank says.

The Bank of Tanzania (BoT) also indicates that there is an increase in volume of gold produced locally. The rise in export value of gold comes amidst a controversy over the government’s ban on the export of mineral concentrates that has affected production at Acacia, Tanzania’s largest gold miner.

BoT’s Monthly Economic Review for March released recently also shows that the mineral forms the major goods export because of reduced exports of manufactured goods.

In the year to February 2017 gold exports amounted to $1.46 billion (Sh3.2 trillion) being an increase from $1.16 billion registered in the year to February 2016. “Gold export improved by 25.6 per cent to $1.46 billion in the year ending February 2017 due to recovery in price at the world market and increase in volume,” the BoT report reads in part.

On the contrary, the report shows, the annual export value of manufactured goods fell to $1.0 billion (Sh2.2 trillion) in the year to February 2017 from $1.32 billion in the year ending February 2016 due to a reduction in the export of edible oil, as well as iron and steel products.

Gold exports had dominated exports of goods for more than a decade until 2013, when it started to decline, owing to falling prices at the global market and its place taken by manufactured goods. Despite regaining its position as Tanzania’s largest export, gold is still peforming poorly.

The mineral reached its peak in 2012, when it passed the $2 billion annual export value mark. The export value then started declining in 2014, when it registered $1.5 billion in the year to February. It continued declining reaching $1.16 billion in the year to February 2016.

Price of gold increases

The price of gold has recovered in the last few years as investors shifted to the precious mineral for safe haven amid growing volatility in global equity markets.

The BoT reports indicates that the price of a troy ounce of gold increased by 10 per cent from $1,192.1 (Sh2.4 million) in February 2016 to $1,234.2 in February 2017. This was well below the $1,742 per troy ounce of February 2012, when gold exports were above the $2 billion mark.

Increase in volume

The BoT report does not give details of gold export volumes, but financial results released by Acacia revealed an increase in gold production in its three mines in the first quarter of this year.

The report shows that gold production in the first quarter increased by 15 per cent compared to the first quarter of 2016 to 219,670 ounces.

Acacia revenue also increased by 6 per cent to $234 million.

AngloGoldAshanti, Tanzania’s second largest gold miner that operates Geita Gold Mine, said in its latest report that production reached 134,000 ounces in the quarter ending December 2016 compared to 125,000 ounces produced in the previous quarter.

The Tanzania Mineral Audit Agency says in its latest report that the country exported 1.37 million troy ounces with the value of $1.63 bilion. Royalty paid by the gold miners was $63.2 million (Sh104.9 billion), while total taxes paid by gold miners to the government was Sh355.3 billion.

Background

Tanzania’s mining sector is gold focused and ranks as Africa’s fifth largest producer after South Africa, Ghana, Sudan and Mali. Production reached 40.4 mt/y in 2011 from 35.6 mt/y in 2010.

Tanzania’s top gold producers are: Acacia, which now operates three mines in northwestern Tanzania, South Africa-based gold producer AngloGold Ashanti, owning the Geita open mine located in Geita Region, Shanta Gold operating the Luika Mine, Canaco Resources and Lake Victoria Mining Company, Tanzania Royalty operating the Buckreef Gold Mine and Stamico, operating the Tulawaka Mine. The Golden Pride mine, which was being operated by the Australia-based Resolute Mining, was closed down in 2014.

Acacia operates Bulyanhulu, Buzwagi and North Mara.

Tanzania opened its mining sector to large-scale foreign investors in 1998, following the enactment of the Mining Act, 1997, after it became the third largest gold mining country in Africa, but was later overtaken by Mali and, in 2015, by Sudan, to become the fifth largest.

In 2010, the country enacted a new law, the Mining Act 2010, which sought to enable the government to get more revenue from the sector. The Act increased royalty of minerals to 4 per cent (gold and other metallic minerals), 5 per cent (uranium, gemstones and diamond).

The Mining Act, 2010 also limited licences to mine gemstones to Tanzanians only regardless of the size of the operation “except where the minister determines that the development is most likely to require specialised skills, technology or a high level of investment in which case the license may be granted to an applicant so long as the non-Tanzanian participation element is no more than 50 per cent,” according to section 8(4).

The Act also gives the minister the powers to prescribe a standard model form the mining development agreement for all projects exceeding $100 million. The Mining Act, 1998 had not given the minister responsible for mining powers to prescribe the MDA. But the Act also changed the way royalties are calculated from the net value to gross value.

Tanzania: abora Regional Commissioner Suspends Kitunda Mine

Tabora — Tabora regional authorities have suspended mining activities at Sikonge District-based Kitunda mine, which collapsed, killing six artisanal miners, recently.

The miners died after being trapped in the mine following the landslide. Such incidents have also been claiming lives in other mineral-rich regions.

In averting further catastrophe at the mine, Tabora Regional Commissioner (RC) Aggrey Mwanri issued the ban on the gold mining site during his visit, accompanied by the regional security and safety committee.

The aim of the tour was to personally see the scene of the accident and send his condolences to the relatives of the deceased.

He said it had been deemed fit to temporally stop the mining activities to pave way for thorough verification of the safety of the mine and assess whether the regulations by the National Environmental Management Council and environmental protection plan were properly observed.

“The suspension (of mining activities) aims at enabling miners to continue with their activities under safe environment to avoid further loss of the nation manpower in similar accidents,” he said.

Mr Mwanri directed the Central and West Zone Assistant Minerals Commissioner Salim Salim and Regional Resident Minerals Officer Laurent Mayala to ensure that the interval from one pitch to another adheres to the requirements as stipulated in the law and regulations.

He faulted the crowded mining pitches, saying they endangers the lives of people.

Tanzania

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Zimbabwe: Mining Boss Gudyanga Ordered Unbudgeted Payments, Court Heard

By Fungai Lupande

Secretary for Mines and Mining Development Professor Francis Gudyanga ordered several unbudgeted payments from the Minerals Marketing Corporation of Zimbabwe (MMCZ), which he later disguised as dividends, the court heard yesterday.

Prof Gudyanga, who was a lone board member at MMCZ, was in court answering questions during cross-examination in the trial of the company’s acting general manager Richard Chingodza (41) and acting deputy general manager (finance and administration) Hannan Tongai Chitate (35).

Chingodza and Chitate are accused of swindling MMCZ of $625 226, 88 after awarding themselves unapproved allowances.

During cross-examination by Chingodza’s lawyer Mr Oliver Marwa, Prof Gudyanga was asked why he ordered that the company donate $60 000 to Kutama College’s centenary celebrations.

“Did you ask MMCZ if they afforded to pay such an amount,” asked Mr Marwa.

In response, Prof Gudyanga said if the company could not afford the donation, management would have said so.

“A letter to you has indicated that the company did not have the money and it is explaining the delay,” inquired Mr Marwa.

“The request was illegal and it cannot be supported by the Company Act or any Government statute governing public funds.”

In response, Prof Gudyanga said the request was not unique.

“It is part of the company’s corporate social responsibility,” he said.

But Mr Marwa said MMCZ was a public corporation and a creature of procedures and questioned the basis upon which Prof Gudyanga made the order for the donation to be made.

“You were a headmaster at Kutama?” asked Mr Marwa.

Mr Marwa then took Prof Gudyanga to task over a September 8, 2015 payment of $517 000 to Pedstock Investment.

“That matter involves classified activities involving stoppage of linkages in the mineral sector,” Prof Gudyanga explained.

“I am surprised that Chingodza, who is aware of the nature of the issue, decided to bring it to court.”

Mr Marwa asked Prof Gudyanga to elaborate on the nature of the payment and he said it was a special payment for the Mineral and Border Control Unit.

He later refused to comment any further.

Mr Marwa then asked him to confirm whether or not two payments of $500 000 and $375 000 were made to the same company in two months, to which Prof Gudyanga said it was correct.

He also quizzed Prof Gudyanga on an October 23, 2016 payment to a Government department which was disguised as dividends.

The trial continues today.

Zimbabwe: Largest Platinum Miner Reports 529% Profit Jump

The country’s largest platinum miner, Zimbabwe Platinum Holdings (Zimplats) has reported a 529 percent jump in profit-after-tax of $42 million in the quarter to March 31, 2017 from $6 million in the prior comparable period on the back of improved metal prices.

There was a general upturn in the average prices of platinum, palladium, gold and rhodium (4E metals) during the period under review.

Platinum prices rose 7 percent to $981 per ounce compared $914 realised in the same quarter in the prior year, while palladium and rhodium increased 46 percent and 34 percent to $766 per ounce and $849 per ounce respectively.

The average price of gold realised in the quarter under review was 3 percent firmer to $1 219 per ounce.

Gross revenue per 4E metals also increased by 21 percent from previous quarter.

However, total revenue for the quarter fell 6 percent to $131 million on the back of a 22 percent decline in sales volumes.

Tonnes mined and milled decreased by 3 percent 2 percent respectively compared to previous quarter.

Metal in concentrate was down 5 percent to 132 117 ounces from 138 446 ounces same period in 2016.

The decline in output was attributed to the redeployment of a production team from ore to waste development at Mupani Mine and a seven day shut-down of the Ngezi concentrator for a periodic mill reline.

“The quarter also had slightly less operating days compared to the previous quarter,” said Zimplats in a trading update.

Net operating costs for the period decreased by a 26 percent on the back of the 22 percent decline in metal sales volumes, while the previous quarter’s net operating costs were impacted by sale of concentrates which attracted higher transport charges.

“Metal sales volumes for the previous quarter benefited from the sale of concentrates stockpiled during a planed furnace shut down.

“Net operating expenses for the quarter benefited from an export incentive of $5,3 million from previous quarter’s $2,2 million and a reversal of impairment of $8 million on the previously written off Reserve Bank of Zimbabwe debt,” said Zimplats.

Meanwhile, Zimplats indicated the redeployment of Bimha Mine remains on schedule to reach full production in April next year.

As at March 2017, a total of $32 million had been spent on the project against the approved total project budget of $92 million.

Additionally, the development of Mupani Mine (replacement mine for Ngwarati and Rukodzi mines) is also on schedule targeting to reach the ore contact by May 2020 and full production in August 2025.

Zimbabwe

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Nigeria: 70 Firms Seek Exploration of Katsina’s Mineral Resources

By Habibu Umar Aminu

Katsina — Over 70 companies have obtained licenses for the exploration and mining of mineral resources available in Katsina, Governor Aminu Masari has said.

Speaking at the inauguration of board of the state exploration and mining company, Masari said the state was blessed with over 35 different types of mineral resources across its 34 LGAs.

Masari said the dwindling oil revenue had forced governments all over the world to look inwards by diversifying its revenue base to address drop in revenue.

He attributed the challenges in the sector to inadequate geoscince data to attract investment, unchecked artisanal mining activity, noting that the administration was poised to tackle the shortcomings by sourcing persons with knowledge in the sector to reposition it.

In his remarks, the state Commissioner of Resource Development, Mustapha Bello, said government had released about N13m for a prospective review of over 20 identified locations where such minerals were deposited.

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Namibia: Firm Profits During Uranium Market’s ‘Worst Year’

Windhoek — Rio Tinto’s Rössing Uranium has reported better financials for 2016, compared to the previous year, despite the fact uranium spot price fell 50 percent between January and November 2016, even hitting below US$20 per pound at one point. As a result the market referred to 2016 as the worst year in the last decade for the global uranium industry.

Rössing Uranium, one of the largest and longest-running open pit uranium mines in the world, mined 24,4 million tonnes of rock and milled 9,1 tonnes of uranium bearing ore. This allowed the mine to produce only 1,850 tonnes of uranium oxide, which is a 48 percent increase in output compared to the previous year’s production output.

The mine made a turnover of N$3 billion 2016, nearly twice the N$1,8 billion recorded in 2015, to register a net profit of N$107 million. The previous year Rössing Uranium had suffered a loss of N$385 million.

Rössing Uranium Limited managing director Werner Duvenhage emphasised that the positive figures are to be seen against the backdrop of the unexpected major collapse by the uranium market in 2016, following a relatively stable market in 2015, with the spot price holding at around US$35 per pound for the entire year.

“At that time, many analysts believed that US$35 would prove to be the market low point, given that a few Japanese reactors were finally authorised to re-start,” noted Duvenhage.

Unfortunately, this was not to be the case, as the emergence of additional secondary supplies and large volumes of new production in 2016, as well as the very slow rate of progress with reactor re-start in Japan, combined to cause the market to fall 50 percent between January and November 2016, before stabilising at year-end around US$20 per pound.

The average sport market price in 2016 was US$25.64 per pound of uranium oxide.

Duvenhage says Rössing Uranium achieved the positive results thanks to “increased production [that] helped to counter the effects of the lower price on our cash flow.”

Further, the reason revenue increased by 67 percent compared to the previous year is due to higher sales volumes as result of the return to continued operations late in 2015.

The mine returned to a four-panel shift roster and seven-day operational schedule at the end of 2015, allowing the 2016 financial year to record the increase in production.

“This, together with the exchange rate that was in our favour most of the year, had a positive impact and we realised a net profit from normal operations of N$107 million compared with an N$385 million net loss the previous year,” he says.

“Looking forward, the year 2017 will be a defining one in our history and we will be remembered for the trail we are now blazing. In line with our expectations, the next few years will be challenging. However, we have worked through challenging times before and over the past 40 years, we have survived. If we achieve our production and cost targets, our business will remain feasible,” he says.

The review period also saw Rössing Uranium pay N$80.4 million in royalty tax, N$50.8 million in dividends and N$107.2 million in pay-as-you-earn tax on behalf of employees.

“Despite the current financial strain under which we operate, we invested N$15.4 million in our neighbouring communities during 2016, either directly or through the Rössing Foundation.”

“Payments to public enterprises, such as NamWater and NamPower, amounted to N$392.7 million, including the training levy paid to the National Training Authority of N$5.6 million. We also spent N$506.7 million in net salaries and wages,” says Duvenhage.

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