Plumbing Zimbabwe Mines - ZimFact
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March 12, 2018
The Zimbabwean minerals industry primarily comprises mineral exploration, mining and mineral processing activities. Economically classified as the Mining and Quarrying industry, the sector also covers industries specialising in mining-related professional support services as well as downstream activities such as fabrication and semi-fabrication.
A majority of companies classified under the Mining and Quarrying industry are represented by The Chamber of Mines of Zimbabwe, the largest mining association in the country.
Typical of other African countries, foreign-owned or controlled miners, including multinational companies, account for the largest proportion of Zimbabwe’s mineral output.
Whereas foreign investment still dominates the Zimbabwe minerals industry since the colonial era, a small-scale mining culture has gradually developed in the country, propped up by Government’s empowerment policy. A dual structure has taken shape with the rise of small-scale miners who have established a significant presence in the gold and chrome sectors over the last two decades. In 2017, for instance, small-scale gold miners accounted for output at 47%, up from 40% in 2016, of Zimbabwe’s total gold output for the year, surpassing large-scale gold producers which contributed 46%, down from 55% in 2016, with secondary producers supplying the difference (2017, State of the Mining Industry Survey).
An enduring characteristic of the industry is that it is fraught with mid-cap mining and exploration companies, a majority of which are privately-owned (Mining Times). More recently, an increasing number of local miners have either listed their equity on London, Toronto, Australia or JSE stock exchanges or revealed plans to tap into these international equity markets for mining finance in the future. A total of 11 mining companies are now publicly-traded. Of these, only four are listed on the Zimbabwe Stock Exchange (ZSE), the only market for equities in the country.
State interests in the minerals industry are mainly held through the Zimbabwe Mining Development Corporation (ZMDC), a wholly-owned state enterprise which owns a large and diversified portfolio of mineral commodities spanning gold, Platinum Group Metals (PMGs); copper; diamonds; industrial minerals and emeralds. A majority of mines operated by which the 35-year old company are currently on care and maintenance.
The Industrial Development Corporation of Zimbabwe, another state-owned company, also controls industrial minerals and other mineral commodities.
Since 2010, the Mining and Quarrying industry has grown into a sector of economic importance to Zimbabwe.
From the pre-dollarisation high of 4.8% in 1995, mining’s share of Zimbabwe’s GDP surged to 7% in 2009 and hit a new peak of 10% in 2013, going level with agriculture for the first time in the economic history of the country. In 2015, its contribution dropped to 9%.
The mineral sector currently generates the bulk of the country’s export earnings. The Reserve Bank of Zimbabwe (RBZ) reported that the minerals shipments at the end of September 2017 accounted for 68% of total receipts, amounting to US$4,04 billion (US$1,718 billion by mining). Gold accounted for 38% of the gross mineral sales, followed by platinum which contributed 36% and ferrochrome (34%).
The mining industry directly employed an estimated 45,000 people at the end of 2012, translating to about 2% of Zimbabwe’s total formal employment and about 9% of the country’s non-agriculture employment, according to the Chamber of mines of Zimbabwe. If the whole mining value chain was factored in, the aggregate number of direct and indirect jobs would reach 78,260.
Ranked by value of output in 2015, Zimbabwe’s top 10 mineral commodities are as follows: platinum and other PGMs, gold, diamonds, nickel, coal and chromite.
Over the last two decades, the Zimbabwe mining industry has become increasingly concentrated in terms of the number of mineral commodities produced and commodity distribution of mineral export.
In 2015, six mineral commodities accounted for more than 96% of the total value of minerals, according to the 2015 State of the Mining Industry Report. Asbestos, iron ore, tin and beryl, which drove export performance in the 1980s, are no longer being produced. Primary production of copper and cobalt has also ceased.
The high commodity concentration reflects the lack of a marginal commodity policy in Zimbabwe, which would encourage the discovery, development and production of less popular mineral commodities including those that have never been mined in Zimbabwe.
The list of marginal commodities includes antimony, barytes, bauxite, iron pyrite, kyanite, talc, agate, amethyst and tourmaline, according to the 2015 State of the Mining Industry Report.
About 60% of Zimbabwe’s land surface comprises rocks of the Archaean with rich greenstone belts in its granitic rocks.
A defining feature of Zimbabwe’s geological formation is the Great Dyke, a body intruding nearly the whole N-S length of the Zimbabwe craton (Mugumbate, 2012). It marks the boundary between the Archaean and Proterozoic in Zimbabwe. The Great Dyke hosts world-class reserves of platinum group metals and chrome ore (Mugumbate, 2012).
Over 60 mineral commodities have been discovered in Zimbabwe, 40 of which have been mined at one point or another, according to the Zimbabwe Geological Survey. This rich mineral prospectivity puts the country among the world’s top frontier mining jurisdictions with great discovery and development opportunities (Zimbabwe Mineral Development Report). In 2013, the country ranked 85 out of of 112 mining jurisdictions on the Mineral Potential index of the Fraser Institute’s annual Survey of Mining Companies (Mining Times).
The index rates mining regions based on their geologic attractiveness.
Minerals found in Zimbabwe
Source: Ministry of Mines and Mining Development
Information on Zimbabwe’s mineral resources and reserves is generally poor, reflecting underinvestment in deposit development. This poses difficulties in estimating the country’s resource/reserve base accurately or measuring reserve depletion and replacement ratios. The country currently relies exclusively on mine-site exploration to replace reserves being depleted through production.
Minerals Deposits, Resources and Reserves
ancient workings. The country remains under-explored to discover new
deposits as well as realising full potential of known deposits
approximate 10 Billion tonnes
billion tonnes of reserves
either as a primary or secondary product
000 tonnes of ore grading 0.7% U3O8 and 0.4% V2O5
from 2876 tonnes to 3244 tonnes for U3O8 and between 2691 tonnes and
4857 tonnes V2O5.
feet) of recoverable natural gas
of the country
Source: Ministry of Mines and Mining Development
The data of Minerals by Resources and Reserves is presented in static form and may be distorted. The information is always changing as new reserves and resources are discovered or as resources are defined and turned into reserves apart from run-of-mine reserve depletion through production.
However, data on increases or decreases in Zimbabwe’s resources and reserves is not available.
Some of mineral resources have not been defined to determine their economic potential, whether or not they can be developed into producing mines. The only reserve replacement method is mine-site exploration, which takes place at or in the vicinity of operating mines with the goal of extending the life of the mines.
Zimbabwe is widely considered grossly underexplored. A recent Zimbabwe Geological Survey report has asserted that just about 40% of Zimbabwe’s landmass had been surveyed and mapped. The bulk of the geoscientific data was produced prior to independence and will now need reinvestigation using new geoscientific techniques and modern equipment. The Geological Survey of Zimbabwe has also noted that exploration in the last 100 years mostly targeted ancient mines. The reinvestigations relate to “all outcropping gold, iron and copper ore deposits”. For this reason, most producing mines are located at and around ancient mines.
Since the late 1990s, the search for new deposits has declined steeply. Exploration project approvals have been suspended while spending on resource evaluation has also trended downwards. Consequently, the country has not discovered new mines over the last 10 years except in the alluvial diamond sector.
Notwithstanding this decline in discovery and development, Zimbabwe is still considered a frontier exploration territory where “easy deposits”—mineralisation close to the surface—can still be found (Zimbabwe Mineral Development Report) Worldwide, new deposits exploration and discovery are now taking place at greater depths or in remote areas with poor infrastructure, increasing discovery costs.
Since 1983, all minerals produced in the country except gold and silver are statutorily sold through State-owned Minerals Marketing Corporation of Zimba­bwe (MMCZ) at a commission of 0.85% of the gross value of sales. MMCZ is also the sole mineral accounting agent of Government.  Fidelity Printers and Refiners, a unit of the Reserve Bank of Zimbabwe, exclusively buys and sells all gold and silver produced in the country under the Gold Trade Act.
Geological Survey of Zimbabwe
Department of Metallurgy
This section provides a non-technical overview of Zimbabwean regulatory framework for the minerals sector. All mineral rights are vested in the State in terms of the Constitution of Zimbabwe, which also confers on the President the power to license subsurface mineral resources to individuals or companies in exchange for a royalty.
The regulation of exploration and mining activities falls under the ambit of the Ministry of Mines and Mining Development, which administers the Mines and Minerals Act [Chapter 21:05] of 1961—the principal statute laying down the procedures for acquiring, registering, maintaining, transferring and giving up licences.
Other regulatory instruments include:
Both the Mines and Minerals Act [Chapter 21:05] of 1961 and MMCZ Act [Chapter 21:04] of 1982 are currently under amendment.
Government also intends to introduce a mineral development policy. A draft of the proposed policy was circulated for stakeholder consultation in 2013, but is yet to be finalised.
To gain access to exploration ground in Zimbabwe, investors have to apply for an Exclusive Prospecting Order (EPO) or a Special Grant for tenements located in reserved areas.
The country currently uses the “free entry” system of obtaining mining titles known as First in First Served (FIFA), which involves staking a claim on a deposit/discovery (Mining Times).
Large mining projects are licensed under Special Mining Leases.
The Draft Mineral Development Policy of 2013 proposed to do away with the FIFA system and introduce a system of auctioning “known” deposits to potential inves­tors.
Alluvial Diamonds
Alluvial Gold
The Indigenisation and Economic Empowerment Act (Chapter 14:33) of 2007 which restricted foreign companies from owning more than 49% equity in Zimbabwe-based mines was largely suspended in November 2017, maintaining the 49/51 percent thresholds only in platinum and diamond mining.
The new Government that assumed power in November 2017 has undertaken to amend the Act and its subsidiary regulations to remove foreign investment restrictions except for diamonds and PGMs.
Zimbabwe’s fiscal regime for the minerals sector is quite extensive and consists of Royalties, Corpo­rate Income Tax, Value Added Tax (VAT), Pay as You Earn (PAYE), Capital Gains Tax, With­holding Taxes, Additional Profits Tax, Customs Duties, Mining Title fees, local au­thority levies, environmental levies, MMCZ marketing commissions and presumptive tax (small-scale miners).
Royalties for top two minerals
*Gold royalty for small-scale producers is 3%.
Source: Ministry of Finance
Although it degree it varies from mineral to mineral, mineral beneficiation in Zimbabwe has taken place since commercial mining began in the 1900s (Chamber of Mines Journal, 2014).
Gold and silver beneficiation in Zimbabwe is more advanced than other sectors. All the big mines have onsite processing plants that produce bullion, which is further refined into gold and silver at Fidelity Printers & Refinery (Chamber of Mines Journal, 2014). The gold sector also boasts of a refinery and a jewellery production industry.
Other sectors with downstream processing plants include iron ore, nickel, chrome, coal and PGMs. The metals industry has given rise to a diversified foundry that produces a wide range of fabricated and semi-fabricated products.
Government is pushing the PGM producers to build a base metal refinery for the processing of precious and base metals.
This Factsheet was prepared by Munyaradzi Mugowo, a Zimbabwean journalist specialising in the mining industry.
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