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More gold mines coming on stream

THE mining sector in Zimbabwe accounts for around 65% of the country’s foreign currency receipts. The country has witnessed several big developments on the mining front in the past year.  The Zimbabwe Independent last week hosted an interview with Mines and Mining Development minister Winston Chitando (WC) , which was aired on the Alpha Media Holdings’ Heart & Soul Television. The programme was sponsored by Zimplats and Nedbank Zimbabwe. Below are excerpts of the interview by Zimbabwe Independent columnist Eben Mabunda (EM) on the progress made so far in achieving a US$12 billion mining industry by 2023:

EM: From your bird’s eye view in your capacity as Mines and Mining Development minister, where are we as a mining economy?

WC: As a mining economy, we are in transition to grow the mining industry from a US$2,7 billion in 2017 to US$12 billion in 2023 that is the process being achieved.  We do have targets for each major mineral in terms of what we want to achieve by 2023.

EM: That would translate to a 275% jump from a figure that you have just mentioned there. Somebody would see this as a very ambitious target. What steps are in place to ensure that we get there and in 2021 how far are we in realising that by 2023?

WC: The breakdown of the US$12 billion is US$4 billion for gold, US$3 billion for platinum, US$1 billion for diamonds, US$1 billion for coal, US$1 billion for chrome and carbon steel, US$500 million for lithium and US$1,5 billion for other minerals. If you then unpack each mineral, starting with platinum on its own in 2021, it will achieve slightly above US$2 billion. The achievement of the platinum goal is premised on the three existing producers expanding. The producers are Zimplats, Unki, Mimosa Mining Company. Over and above this, there are one or two entrants into the sector. Zimplats is going through an expansion drive. I am sure you are aware that we have signed a US$1,7 billion investment  programme with Zimplats. Unki tied in their expansion programme in October. They are expanding as well, while Mimosa is also in the process of expanding. Over and above this, we will have in 2023 Great Dyke Investments and Karo Resources having their first output coming through.

EM: You mentioned platinum and threw in a US$2 billion figure from below a billion US dollars in the year 2020. Let us talk about the value addition coming from platinum and hitting across the board. What is the strategy from the government policy perspective?

WC: The agreement that was signed between government and Zimplats provides for the setting up of a platinum refinery that will be up and running in 2025. The refinery will undertake value addition. Secondly, the agreement with Zimplats entails utilising some of the residue from the smelters to produce sulphuric acid. This will be used for fertiliser production.

EM: Gold is one of Zimbabwe’s key minerals. What projects and programmes are in place in line with the US$12 billion target?

WC: The thrust in gold production is on two major perspectives. One is the large scale mines, and the other is on the small scale mines. There is huge interest in capacity (improvement) for large scale miners. Traditionally we have had the big gold miners producing just over two tonnes per annum. But now, we have a number of big projects coming. Shamva Mine will be producing four tonnes per annum. It will be up and running by 2023. Eureka gold mine will be producing from zero to 1,6 tonnes per annum. It is now up and running after being commissioned by the President last month. We have Caledonia Mining Corporation in Gwanda who will be producing two tonnes per annum. We have a number of these projects on the large scale. We also have Rio Zim, which will be producing an incremental of about 1,5 tonnes per annum. This is on the medium to large-scale miners. On the artisanal sector, gold production is actually increasing through initiative, which the President will unveil soon to support them. If you look at the May and June figures, production has been rising.

EM: There is the issue of formalisation of artisanal miners’ operations. What is government’s strategy towards this? It is important in order to curtail leakages

WC: Formalisation is very important. The government has come up with a thrust called ‘responsible mining’, whereby all players – small, medium and large – have to follow the law in terms of marketing through the normal channels, in terms of observing the environmental laws, employment laws and all other laws. We work very closely with the Chamber of Mines of Zimbabwe on the medium and large mines, and the Zimbabwe Miners Federation, who represent artisanal miners. Over and above that, government will be rolling out at the beginning of next year over 10 gold centres throughout all provinces, which will facilitate production of gold from artisanal miners. These will have a number of facilities, which include the presence of Fidelity Printers Refinery.

EM: Let’s talk about other minerals. Zimbabwe is endowed with the second largest chrome reserves. Zimbabwe stopped exportation of raw chrome this year. This is not the first time this has been done and it is something that has been implemented before but did not yield the intended result. What is different this time around?

WC: This time around we have more ferrochrome plants which are being constructed. We have Afrochine in Selous, which has five furnaces, two of which were commissioned last year. We have Zimasco, which is increasing production from about 130 000 tonnes per annum to 400 000 tonnes per annum. We have Jinan in Gweru who are increasing output. Without going to small smelters, which have been established, just these three companies put together are more than doubling ferrochrome production by 2023 from a 2017 base.

EM: Are these ready to produce to meet the 2023 target, or they are still in their infancy stages?

WC: We already have five new furnaces from the time the policy (of banning chrome exports) was announced. Two of them were commissioned last year. Jinan is putting new furnaces in Gweru for ferrochrome and low carbon ferrochrome production. Just that on its own is new production that is coming through. So that’s what has changed.

EM: Let’s talk about illicit financial flows here in Zimbabwe. Home Affairs is on record saying Zimbabwe loses approximately US$100 million mineral resources to corruption, which translates to about US$1,2 billion annually. What is your ministry doing to curtail the mineral leakages?

WC: There is an inter-ministerial committee which is working on that. At the right time comments will be made but it’s something being actively being looked at.

EM: Issues of forex retention for miners, at 60%, do you think tweaking that very matrix would perhaps reduce the extent and levels of side marketing in the country?

WC: The issues around monetary policy are reviewed on an ongoing basis and the governor (of the Reserve Bank of Zimbabwe) is always looking at it. The relevant stakeholders continue to talk about it.

EM: Historically, Zimbabwe is infamous for inconsistent mining policies, which has seen Zimbabwe in some cases being ranked as one of the worst places to run mining operations globally by some rating agencies.  There has been a mining bill, which has been in the pipeline for many years now, what is your ministry doing to push it through?

WC: Early next year the Mines and Minerals Act will be amended. I think it’s also important to recognise that the Bill as is, is a very good piece of legislation. Structurally, there is nothing fundamentally wrong with the Bill, but it has to be enhanced to modernise it with some of the trends which are there to facilitate especially the small and artisanal miners and many other minerals issues which need to be updated. But the amendment is next year.

EM: Please explain issues around women’s empowerment?

WC: We have what we call the special desk, which is there to assist youth and women. Secondly, the Zimbabwe Miners Federation includes a number of associations that came together as Zimbabwe Miners federation. These include women in mining. There is an association for women under the banner of Zimbabwe Miners Federation. We are continuously dialoguing with the Chamber of Mines and the Zimbabwe Miners Federation. With these engagements, we are going to talk about women in mining.

EM: Tell us about investment into the mining sector?

WC: Government has this year approved over 20 exploration licences, and we now have increased exploration activity. Zimbabwe is under explored. The exploration, which is taking place has been depending on old technologies. Now, there are more modern techniques. Zimbabwe needs to be explored using those modern techniques. So, yes, more exploration will be taking place because we want to see increased exploration. There are obliged to give monthly reports and we have got officers at the geological survey who interrogate the reports and interface with investors.

EM: What policies are there to ensure that we beneficiate more out of our own mineral resources?

WC: Well, we have mineral specific beneficiation policies and I touched on platinum. In other minerals we have a lot of beneficiation, such as in black granite. We also banned the exportation of raw black granite and right now as we talk, we have over five new black granite processing plants which are being established in the country. They will be running at the end of next year. In 2017, the establish capacity of coke production was less than 200 000 tonnes. We now have had the coke battery by Ting Shung, 150 000 tonnes, which was commissioned this year and another 170 000 tonnes being commissioned next year, then another one million tonnes, which will be the biggest one in Africa being constructed as the beneficiation is taking place. We have copper, we have the greater Chinhoyi copper development programme where we will see the resuscitation of copper production and also the construction of a copper refinery in Chinhoyi. So, we have value addition in most of the minerals.

EM: Are we going to reach that goal of a US$12 billion by 2023?

WC: Very much so. Economic growth is a process, it is not an event. Mines take time to construct, big projects take time to construct. The diamond sector is doing very well. It will achieve the US$1 billion. We have a carbon steel plant being constructed in Manhize and it will be operational by December next year. On its own it will do US$1,2 billion value by December next year.

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