Zimasco To Increase Ferrochrome Production

Sinosteel Subsidiary To Treble Production

China’s Sinosteel Corporation has announced plans to increase production at its Zimbabwe Mining and Smelting Company subsidiary by 300 percent.

Mr Zhang Suwei, Sinosteel South Africa managing director, told reporters in South Africa that the firm will expand ferrochrome production from the current 210 000 tonnes a year to between 500 000 and 600 000 tonnes. Zimasco is said to have access to the world’s second largest reserves of chrome after South Africa. Two furnaces were opened in April last year following the liberalisation of the Zimbabwean economy.

Sinosteel has a 92 per cent stake in Zimasco and has an option to buy the remaining eight percent, however it is one of the companies expected to comply with Zimbabwe’s new Indigenisation and Economic Empowerment regulations that seeks to cede 51 percent shareholding to locals, regulations that have been greeted with a mixed response.

Sinosteel Plans Expansion At Zimbabwe Ferrochrome Plant

Sinosteel Corp., China’s biggest iron-ore trader, plans to expand capacity at its ferrochrome plant in Zimbabwe by as much as 30 percent, a company executive said on Thursday.

“We are planning to expand the ferrochrome capacity there by 50,000-60,000 tons, from the current 200,000 tons a year,” Zhang Suwei, managing director at Sinosteel South Africa (Pty) Ltd., said in an interview in Hong Kong with Bloomsberg today.

Zimbabwe Suspends Chrome Ore Export Ban

Zimbabwe has suspended a ban on the export of raw chrome ore. The ban will be lifted for an 18-month period during which small-scale miners will be able to export the mineral.

The ban was brought in last year when the Zimbabwean government permitted only trade in refined chrome products, a move which put many small-scale exporters out of business as they had no capabilities to refine the ore, however this result has led Mines and Mining Development Minister Obert Mpofu to announce a lifting of the ban.

“We had imposed the ban to ensure that producers exported value-added products and not just raw chrome because, that way, the country was losing millions in potential revenue.But we have shelved this for 18 months” Mr Mpofu explained.

The minister also said that the government has relaxed legislation governing the gold sector to facilitate the entry of local enterprises into the sector.

“We have . . . allowed small-scale gold-miners to access licences to buy and sell their own gold. Because of our previous regulations that criminalised dealing in and possession of gold, these people were smuggling it to South Africa or selling it to illegal dealers here.” Mr Mpofu said. “Government was losing a lot money that way, but now the dealers can even buy from the gold panners and sell directly to the market.”

Chromex Turns In Profit

AIM-listed, Cromex Mining turned in a profit of £195,000 for the year ended 30 September 2009, compared with a £1.4m loss in 2008.
The company has two key mining assets on the Bushveld Complex in South Africa, which between them have total resources of approximately 41 million tonnes of chromite.
Chromex successfully commissioned its processing facility at the Stellite open cast chrome mine in South Africa during the course of the year, thus enabling it to take advantage as the chrome market began to recover towards the end of 2009. The commissioning of the first phase was completed in August 2009 and used stockpiles mined in the early part of the financial year. This allowed mining operations at Stellite to be suspended during a period of adverse market conditions. Full mining restarted in January 2010.
Stellite will initially produce approximately 20,000 run of mine (ROM) tonnes per month, increasing to 40,000 ROM tonnes per month once a dense media separation circuit (DMS) is installed at the plant. This is expected to be completed during Q3 of 2010.

Both Stellite, and the Mecklenburg mine on the east limb of the Bushveld, are owned and operated by South African registered Chromex Mining Co, which is 74% owned by Chromex and 26% owned by their Black Economic Empowerment partner Umnotho WeSizwe.


Development at Mecklenburg project has been deferred pending the conclusion of a court case with Samancor Chrome Limited who applied to the South African High Court in 2008, to set aside the decision to award Chromex the Mining Rights.

The company said that it continues to consolidate its position as a long term chrome producer in southern Africa. Chromex has agreed to acquire 49% of Falvect Mining Ltd, a Zimbabwe-based company with chrome assets.

African Rainbow To Boost Production At Khumani Iron Ore Mine

African Rainbow Minerals CEO Andre Wilkens said on Tuesday that the company is on track to boost production at its Khumani iron ore mine in South Africa by 2012.

Speaking to Reuters on the sidelines of the Mining Indaba conference in South Africa Mr Wilkens said "We are certainly on track for the first phase and the second phase (expansion) and see full production at the end of the year 2012, from 10 million tonnes per annum to 16 (mtpa),".

ARM has formed a joint venture with Vale to explore for copper in Zambia, and other minerals in the Democratic Republic of Congo, Namibia and Mozambique. Mr Wilkens said that the JV would be also be looking specifically at platinum in Zimbabwe.

Jindal and ArcelorMittal In Race For Ziscosteel

Jindal Steel & Power Ltd (JSPL) and Arcelor Mittal are the only two runners in the race to acquire a majority stake in Zimbabwe Iron & Steel Company (Ziscosteel), the largest steelworks in the African country. Ziscosteel is 89 per cent-owned by the Zimbabwean government which is looking to divest a 60 per cent stake as part of its privatisation programme.

Although it is not clear how much the deal would fetch the Zimbabwean government
Ziscosteel has an annual capacity of 1 million tonnes and is a facility for long products used in the construction sector. According to sources within the steel industry a greenfield facility of the same capacity would cost anywhere from $600 million to $1 billion.

JSPL has been scouting for raw material assets according to sources, the qualifying round has concluded followed by due diligence before bids will finally be submitted.

Ziscosteel has debt estimated at around $300 million. The plant ceased operations in 2008. Even at that stage – before the economic crisis - it was operating at less than break-even capacity. Apart from the steelworks, Ziscosteel also owns an iron ore mine in Zimbabwe.

China Reschedules Zimbabwe Steel Debt

China has rescheduled to 2013 the debt of Zimbabwe's biggest iron and steel maker following a request by the Zimbabwean government, according to official sources.

Zimbabwean Industry and International Trade Minister Welshman Ncube told Xinhua on Friday that the Zimbabwe Iron and Steel Company (ZISCO) was presently not generating any income and was unable to service its 54.684 million U. S. dollars debt to the Chinese financiers.

The Chinese financiers extended the loan in 2007 to assist ZISCO refurbish one of its blast furnaces.

Ncube said the debt had a repayment schedule of 5 million dollars a year and that the first payment was due at the beginning of last year.

The struggling ZISCO managed to pay around one million dollars, prompting the government to request for debt relief from the Chinese financiers.

"We asked the Ministry of Finance to renegotiate the payment terms on the understanding that by 2013 ZISCO will be fully operational," Ncube said.

He said the government was happy with the debt relief, indicating this would give ZISCO the breathing space to concentrate on refurbishing the blast furnace and improve operations at the company.

"Right now we are still working with the Chinese contractors to refurbish Blast Furnace Number Four," he said, adding the major challenge had been that the company was using the little money generated to service the debt at the expense of perfecting the machine.

Ncube said the government was also scouting for a strategic partner to purchase part of its 88 percent shareholding in ZISCO to inject working capital in the iron and steel maker, which is part of the 40 companies that were slapped with sanctions by the West.

Ncube spoke as officials from China's Eximbank and Sinosure -- a Chinese State enterprise -- signed a memorandum of understanding with the Zimbabwean government on various projects.

The agreement would see Eximbank investing in projects to improve water supply in Harare and the production of fertilizer and pharmaceutical drugs.

Sinosure will provide insurance cover for the projects that will be supported by Eximbank.

The first phase of the program will see Eximbank financing fertilizer supply, medicines, and water chemicals for Harare.

Speaking during a meeting with the Chinese delegation on Thursday, Acting President Joice Mujuru welcomed the debt relief and China's readiness to appreciate Zimbabwe's difficulties.

She said the chosen projects were critical in the revival of the country's economy.

The Sinosure executive vice president and head of the delegation, Zhang Weidong, said the debt arrangement and the three projects they will support opened a broader way of future cooperation with Zimbabwe.

China's cooperation with Zimbabwe has been growing tremendously over the years, with the country providing approximately 300 million dollars in aid to Zimbabwe last year.

Source: CRI

ZIMASCO Plans To Double Output

MIDLANDS-based ferro-chrome producer, Zimasco plans to upgrade and refurbish key plant in order to ramp-up production and take advantage of firming prices in the global stainless steel market.

Global ferro-chromo production is on the rebound after taking a knock from the world-wide economic crisis with the stainless steel market, a major user of ferro-chrome, showing signs of stabilising after high levels of stock build-up towards the end of last year.

Zimasco Chief Executive Officer Sydwell Jena says his company plans to increase production from the 69 000 tonnes recorded at the end of last year to about 162 000 by bringing one of the company’s furnaces back on line.

Jena said the company, now a subsidiary of China’s Sinosteel Corp, plans to eventually see increase to 230 000 tonnes per year as the metal’s price firms.

“Zimasco plans to increase production by upgrading furnace No 2 furnace when our capital allows it. This will increase operational capacity to 230,000 tonnes.

“Further expansion is also planned beyond the refurbishment of furnace No 2, although the extent is yet to be determined,” he said.

The Zimbabwe government disposed of its majority interest in Zimasco’s to Sinosteel and Jena says the tie-up has brought significant operational benefits for the company.

“New off-take agreements have been signed since Sinosteel Corp became the majority shareholder of Zimasco. This includes an off-take agreement with Sinosteel Raw Materials, a subsidiary of Sinosteel Corp.

“The association with Sinosteel allows Zimasco access to various logistical, marketing and financial facilities at competitive rates, as well as opening doors to major stainless steelmakers (our customers),” Jena said.

Zimasco sells 48 percent of its products to Europe, mainly in Germany, Italy, Spain and France, while 34 percent goes to China and Japan, and 18 percent to the US market.

Source: New Zimbabwe

China, Zimbabwe In Coal Link-Up

Zimbabwe's BMC Engineering Group of companies’ subsidiary, Stoat Mining, has commissioned the first phase of a US$150 million coking facility that will produce 400 000 tonnes of coking coal per annum. Coking coal is used mainly in the production of steel and other industrial applications.

The coking facility is being developed under a Build, Own, Operate and Transfer (Boot) agreement between Taiyuan Sanxing Coal Gasification Company, Hwange Colliery Company Limited and Stoat Mining.

Taiyuan Sanxing Coal Gasification Company’s principal activities in China are the production and sale of coke, washed fine coal, raw coal, coal chemical products and coal gas.

The Boot project vehicle known as Hwange Coal Gasification Company (HCGC) is set to complete the construction of the coking facility within the next 18 months whereafter it will operate the state-of-the-art coke battery to HCCL.

BMC Engineering chairman Dr Cephas Msipa Jnr said the HCGC project represents one of the most successful examples of private sector-based co-operation between China and Zimbabwe.

Taiyuan Sanxing Coal Gasification Company is listed on the Shanghai Stock Exchange, while HCCL is listed on the Zimbabwe Stock Exchange, JSE Securities Exchange and the London Stock Exchange.

Dr Msipa Jnr said in addition to the US$200 million that the coke battery will generate in exports annually there are two other major developments that may see the group achieve additional coal exports exceeding US$250 million per annum.
“Firstly, we had to set up a hydraulic brick-processing facility that will reduce the quantity of refactory bricks and materials that we will need to import from China in the second phase of construction.

“Secondly, we acquired Chibondo Mine quarry, about seven kilometres north of Hwange town, and in the process of extracting aggregate materials for construction, we have discovered a substantial thermal coal deposit.

“Given our current mining and crushing capacity, we are in a position to immediately mine and export over 250 000 tonnes of coal per month,” explained Dr Msipa.
HCCL managing director Mr Fred Moyo said: “We have a 25 percent equity in the coke oven venture. We are therefore in a position to influence company policy (Hwange Coal Gasification Company) at board level. Furthermore, we have to pay for our equity in kind through coking coal and we are therefore able to absorb the investment comfortably in our budgeted cash flow.”

Meanwhile, BMC Engineering Group has also unveiled a six-metre container that is set to revolutionise the bulk shipping and transport industry in the Sadc region.
The bulk container, designed by Dr Cephas Msipa Jnr, is made from locally manufactured steel and polypipylene material.

The development of the container has been motivated by the development of the new coking facility.

“After overcoming the construction challenges, HCGC found itself faced with the logistic nightmare of loading and transporting almost a thousand tonnes of material a day. Our railway system is in a parlous state after almost a decade of economic sanctions.

“Coke exports to the north are now achieved largely by road and the one tonne bags that are currently in use are manually loaded and cumbersome to handle. We therefore decided to design and construct a container from locally available materials. BMC Engineering initiative has been enthusiastically supported by the offices of Local Government, Urban and Rural Development Minister Dr Ignatius Chombo and Vice-President Joyce Mujuru. Both view the container as an opportunity to introduce much-needed employment opportunities and cash to rural areas via village-based industrial centres that can manufacture the containers,” explained Dr Msipa Jnr.

BMC is now working in consultation with various stakeholders on a strategy to achieve the production of up to 500 000 containers per annum.

“In 1962 Zimbabwe exported 1,5 million tonnes of minerals using the existing rail network and coal-fired steam locomotives. We should be able to achieve those levels within a couple of years using the bulktainer and modern diesel-electric locomotives to export minerals such as coal, ferrochrome and iron ore valued at over US$1,5 billion per annum.”

Mining experts note that there are huge coal reserves in Zimbabwe containing both energy coal and coking coal that are not being fully exploited.

There are important coal reserves in Zimbabwe estimated at 30 billion tonnes, of which 1,3 billion tonnes are recoverable, by surface mining.

Source: Sunday Mail, Zimbabwe

Chromex Takes Stake In Zimbabwe Mine

Chromex Mining a chrome mining company focused in Southern Africa, has concluded a binding Heads of Agreement to acquire 49 percent of Falvect Mining.

Falvect, a company owned and operating in Zimbabwe was acquired for a nominal consideration.

Under the terms of the acquisition, Chromex will have the exclusive right to co-develop all Falvect chrome concessions in the Shurugwi region and tribute agreements in the Ngezi area.

Chromex will market all the chrome products produced from those operations.

“In return, the company will provide working capital into Falvect and funding for the development of current projects and any additional acquisitions in Zimbabwe, which is host to significant high grade chrome ore deposits.

“A technical review of the contained mineralisation will commence once final agreements have been concluded,” said Chromex.

In line with the development of its business, Chromex is already investigating the economics of setting up beneficiation facilities in Zimbabwe.

Source: Zimbabwe Telegraph

Zimbabwe Lifts Chrome Ore Export Ban

The Zimbabwe government has lifted the ban on chrome ore and chrome fines exports, the Minerals Marketing Corporation of Zimbabwe has said.

The move is intended to plug leakages, encourage value addition and to help miners re-equip through chrome pledges.

The lifting of the ban, it is expected, will run for one-and-a-half years before a further review.

"The Minerals Marketing Corporation wishes to advise that the ban on export of chrome ore and chrome fines has been lifted for an 18 months window with effect from of November 1, 2009," MMCZ said.

A senior official with the Ministry of Mines and Mining Development, who requested anonymity, said the Government had lifted the ban to enable local miners to mechanise their operations.

He said Government realised that most of its fledgling mining operations did not have resources to afford key but expensive machinery.

The source said it was Government understanding that miners could pledge their chrome for mining machinery, which is expensive to acquire.

High-grade chrome, which is found mostly in the Midlands province along the Great Dyke, is also found in Shurugwi, Mutorashanga, Lalapanzi and Guinea Fowl.

"Most of our people do not have resources and so lifting the ban will empower them as they would be able to marshal resources.

"They will be able to get external loans to buy machines," said the source.

The ban was temporarily lifted last year, but was restored as mining firms and individuals started abusing the waiver.

Local miners would accrue debts that they could not settle creating problems for Government as the guarantor of some of the deals.

Government first considered banning of raw chrome exports around 2007 in an attempt to encourage local value addition to the mineral.

Mines and Mining Development Minister Obert Mpofu, speaking on the sidelines of the Common Market for Eastern and Southern Africa Summit in June this year, said the ban was effected as a loss control measure and to encourage value addition to the mineral.

Minister Mpofu said the ban was meant to plug one of the major holes through which the country had been losing a lot of revenue.

"We have already spoken to some producers and exporters on the issue.

"The country is losing a lot of revenue through the unregulated sale of such high value minerals resources as chrome and chromite products, which would generate huge revenues if sold through the right channels," Minister Mpofu was quoted as saying.

He said some producers, such as the Zimbabwe Mining and Smelting Company and Zimbabwe Alloys, were already smelting raw chrome into such semi-finished products as ferrochrome.

Zimbabwe still has abundant buyers for its chrome products, mainly in South Africa, China and Europe who are willing to buy stockpiles of the mineral.

Source: Zimbabwe Herald

Metmar Buys 40% Stake In Zimbabwe Alloys

JSE-listed commodities trading company Metmar has completed an agreement to acquire a 40% stake in Zimbabwe Alloys and its subsidiary Chrome Corporation (Chromecorp), in consortium with several partners.

Metmar owns a 20% stake in the consortium, which it said would not only make capital contributions, but also had the required knowledge to restart the mining and alloy production.

The purchase consideration amounted to $56,25-million and $4,1-million for Zimbabwe Alloys and Chromecorp respectively, and was payable in several tranches.

Most of the proceeds would be applied to restore the operation’s mining, processing and production capacity. The Metmar consortium would also apply its significant intellectual capital to unlock the value of this investment.

Accordingly, it would invest towards the design, construction and commissioning of new furnaces, the training of staff as well as the transfer of knowledge and know how regarding the direct current technology and/or the refurbishment of existing furnaces and mining and processing activities.

The purchased assets included, among others, a furnace complex in Gweru, washing and metal recovery plants and the mineral claims to the extensive high quality chrome deposits. The refinery consists of a smelter, metal recovery plant and crushing, screening and loading facilities. Over the years, the refinery produced about three-million tons of ferroalloy products.

“The opportunity to invest in Zimbabwe Alloys and Chromecorp attracted significant interest from a number of commodity players, both in South Africa and further afield, based on its long-term potential,” said Metmar CEO David Ellwood.

The acquisition met Metmar’s strategy of concluding equity stakes in production and mining assets to secure marketing rights as well as the potential to unlock long-term value for stakeholders. It fitted the group’s policy to diversify into a broader range of commodity sources, although the acquisition is still subject to the conclusion of a technical due diligence.

“Metmar is already successfully exposed to the Zimbabwean environment through metallurgical coke screening activities. With mounting evidence of the potential for economic renewal in the region, we started evaluating opportunities to strengthen our strategic presence there more than six month ago, underpinned by our cautious and conservative investment approach,” commented Ellwood.

“We are confident that the acquisition presents Metmar with access to high quality chrome ore, high-carbon ferrochrome and plasma chrome and our new Zimbabwean partnership with Benscore Investments, which owns the remaining 60% in Zimbabwe Alloys, holds significant potential.”

Source: Mining Weekly

Hwange Colliery Resumes Coke Production

Hwange Colliery Company resumed coke production yesterday with its battery discharging 60 tonnes of the critical input for metallurgical industries.

It is a gradual recommissioning process that will see the 22-year-old plant operating at full capacity next week.

The battery stopped working in February this year after most of its 32 ovens ceased operating.

Hwange, the largest coal miner in Zimbabwe, had engaged consultants from Arcelor Mittal, the world’s largest steel marker, Forosbel Africa (Private) Limited of South Africa and the Zimbabwe Iron and Steel Company. The companies use coke in their production process.

"We have already pushed (discharging coke) from six ovens and we are hoping to operate at full capacity by the end of next week," HCCL spokesperson Burzil Dube said.

He said the plant, key to the survival of the colliery would produce at least 18 000 tonnes a month when operating at full capacity.

HCCL marketing manager, Mr Charles Zhou said the company would now focus on resuscitating lost markets when the plant was down.

"Our customers never stopped operating because Hwange was unable to supply.

"This means that they were getting the product from somewhere else. Now that the product is available, Hwange will work to revive traditional markets and we are hopeful that we will be able to regain them," Zhou said.

Hwange Colliery markets coke in three broad categories namely foundry coke, metallurgical and coke peas.

Hwange used to supply coke to South Africa, Mozambique, Zambia and the Democratic Republic of Congo.

The initial stage under the resuscitation had been charging tar into the oven to achieve an average of between 800 and 1 000 degrees Celsius.

This was followed by infusion of liquefied petroleum gas that culminated in temperatures rising above 1 050 degrees Celsius suitable for burning coking coal to produce coke.

The coke oven battery was commissioned in 1987 by a British company, Otto Simon Carves.

Source: Zimbabwe Herald

Zimbabwe's Hwange Colliery Clinches Zambia Export Deal

Zimbabwe's Hwange Colliery Company has clinched deals worth US$5 million to export coal products to Zambian companies.

The deals were struck at the recent 45th edition of Zambia International Trade Fair held in the country’s second largest city, Ndola.

According to the company’s marketing manager Mr Charles Zhou, the mining giant will be supplying at least 1 000 tonnes per month of coke breeze to a copper smelting company, Eastern Union, for the next five years. Mr Zhou said the Colliery will also make monthly supplies of 500,000 tonnes of foundry coke to Ndola Foundries.

"Our challenge is now to ensure we produce enough so that we will be able to meet the demand," said Mr Zhou.

He said the Zambia trade fair has enhanced HCCL’s visibility as most companies were buying coal from middlemen.

"Although we had created a solid foundation, the middlemen had found space between us and the customers.

"Most coal customers were buying from middle men but this trade fair has given us an opportunity to directly engage our customers. It is very encouraging," he said.

Zambia and the DRC are the key export market for HCCL.

Hwange normally supplies an average of 10 000 tonnes of various coal products to Zambia.

But because of subdued copper prices, the company is supplying not more than 5 000 tonnes.

HCCL and Zeco Holdings were the only Zimbabwean companies that participated at Zambia International Trade Fair.

Source: The Herald, Zimbabwe

Zimbabwe To Ban Raw Chrome Exports

The Government in Zimbabwe is to impose a ban on the export of raw chrome without value addition as the country is losing revenue, Minister of Mines and Mining Development Obert Mpofu said in a telephone interview.

Consultations with chromite exporters to add value to the mineral were also under way.

Mr Mpofu said some companies had resumed the smelting of chromite ore to ferrochrome while negotiations with exporters were ongoing.

“Negotiations have reached an advanced stage to ensure that they process the mineral before exporting so that the country could get more by way of churning out a semi-finished product.

“We are engaged with chrome ore exporters to ensure that they process their chrome to ferrochrome before exporting it,” said Minister Mpofu.

The minister said companies like the Zimbabwe Mining and Smelting Company (ZIMASCO) and ZimAlloys had already started smelting chrome.

He said even small-scale players would be taken on board so that they enjoy the various deals and arrangements that have been struck by the Government.

“The Government will also be seeking to promote small-scale chrome miners to set up more smelters around the country while imposing a total ban on the export of chrome without value addition,” he said.

There are many buyers in South Africa, China and Europe willing to buy stockpiles of the mineral.

The Government has embarked on the resuscitation of closed mines that have potential to benefit the country through value addition.

Under the Short Term Emergency Recovery Programme the exploitation of chrome was given priority as the country had huge reserves of the mineral. Zimbabwe has the world’s second largest chrome reserves.

“The inclusive Government will therefore take advantage of the existing beneficiation facilities to refine all important base metals which include chrome, copper, nickel and iron ore,” read the STERP document.

STERP noted that the low level of beneficiation and value addition to our mineral resources limits the contribution of mining to the revival of the economy.
Under STERP initiatives to increase beneficiation and value addition for all major minerals including gold, platinum, nickel, copper, coal, coke, and other various non-ferrous ores and concentrate would also be undertaken including penalties for the export of raw minerals where value addition options are readily available.

Presently, virtually all diamonds, emeralds and semi-precious stones are exported in raw form, while a small percentage of gold is manufactured into jewellery.
“This process will take advantage of the existing local gold refinery and mature jewellery industry, which will make it immediately and commercially feasible to add value to our mineral resources,” reads STERP in part.

Capacity to beneficiate industrial minerals remains low and it requires more effort to increase beneficiation capacity in the medium to long-term.

Chrome mining is undertaken in Shurugwi, Mutorashanga, Lalapanzi and Guinea Fowl with the smelting being done in Kwekwe.

Chrome mining in Shurugwi started as open cast workings in 1905.

Source: The Chronicle, Zimbabwe

Mugabe Orders Zimbabwe Ferrochrome, Steel Production

Zimbabwean President Robert Mugabe President of Zimbabwe has visited the Kwekwe district of the country and expressed his anxiety regarding the suspension of operations at both Zimasco and Ziscosteel.

Mr Mugabe has instructed officials to commence measures leading to the resumption of operations in April. Zimasco has stocked 70,000 tonnes of chrome ore and said that, as soon as the world market of ferrochrome has recovered, the Kwekwe plant will resume producing ferrochrome.

Although it is not known when either Zimasco or Ziscosteel suspended their operations, the government said that these shutdowns are due to sanctions imposed by western world and the recession in the world economy from the autumn of 2008.

Zimbabwe has also been suffering from a serious shortage of electric power for a long time and this has had a negative impact on the production of ferrochrome, nickel, platinum and steel, which are major industries in the country.

Source: Steel Guru

Hwange Colliery Production Down 17 Percent

Hwange Colliery Company Limited coal production last year fell 17 percent from 2,071,526 tonnes to 1,722,801 tonnes.

HCCL, the country’s largest coal miner attributed the decline to frequent breakdowns and the loss of critical skilled staff.

The company said that the demand for coke and coal products in the market was firm in the first three-quarters of the year but decreased significantly in the fourth quarter as the global economic crisis began to unfold.

It said that by the end of the year, most of the local and export customers in the mining, ferrochrome and manufacturing industries had scaled down their operations and some even closed.

"The demand in the export markets was also low in the last quarter of the year.

"The decline in the commodity price on the international markets led to the decrease in the prices of coal and coke," said the colliery.

The production tonnage was lower than the previous year because of the envisaged recapitalisation of the business was not achieved. The sources of coal for the period under review were JKL and Chaba opencast, and three main underground mine.

Since there was no major equipment purchases during the year, the existing aged plant and equipment had frequent breakdowns that constrained the company’s operations.

Hwange coking coal and Hwange industrial coal sales amounted 494 990 tonnes and were slightly below the tonnage of 541 357 tonnes achieved in the prior year.

A total of 147 228 tonnes of coal fine were sold during the year locally and to export market. The company added that deliveries of coal to Zimbabwe Power company ‘s Hwange Power station amounted to 1 073 602 tonnes compared to 1 315 799 tonnes delivered for the same period last year.

There were no coke oven gas supplies during the year because of the major breakdown on the gas pipe.

Coke sales including breeze, accounted for 154 529 tonnes of which 70 percent was exported. A tonnage of 213 370 tonnes was sold the previous year.

On its general outlook, the company said that procurement of mining equipment and refurbishment of major machinery will be priority during 2009 and this is expected to restore.

Source: The Herald, Zimbabwe

Fumana Energy Loses Zimbabwe Coal Development Contract

The government of Zimbabwe has scuttled two multi-million dollar coal mining and electricity generating projects planned by a consortium of local business men in partnership with an Indian company and has awarded the project to one of Zanu-PF’s major financiers, casting grave doubts on its indigenisation thrust.

Under the proposals, Fumana Energy Private Limited led by Bulawayo businessman Delma Lupepe, would have partnered an investor from India to inject capital into the power station upgrade in partnership with a consortium comprising of the local community, traditional chiefs, workers, the Matabeleland Development Association and individual business people.

The two projects, estimated to cost US$600 million and US$400 million respectively, would have broken the monopolies of local coal miner Hwange Colliery Company and power generator, Zimbabwe Power Corporation (ZPC).

According to the Fumana proposal, both Hwange and ZPC lack the capacity to raise funds needed to invest in upgrading power and coal supplies for increased generation and initiating other downstream industries from coal by-products

Fumana’s proposal would have seen the opening up of the coalfield in Hwange district and coal-bed methane in the Lupane Halfway area of Sinamatella where geological surveys have indicated 96 million tons of coal deposits.

Last week, the Zimbabwe Electricity Supply Authority (ZESA) chief executive officer, Engineer Benjamin Rafemoyo announced the power utility had entered into a US$800 million deal with John Bredenkamp a known Zanu-PF financier on an identical project which Fumana had earlier proposed.

South African-born Bredenkamp - ranked among Britain’s richest people in 2002, with an estimated fortune of US$ 1 billion - had his companies investigated for tax and exchange control violations and he reportedly fled Zimbabwe in 2006.

About a dozen and half of his companies were placed under a revised sanctions list published by the European Union in January this year.

Bredenkamp temporarily fell foul of President Robert Mugabe in his attempts as king-maker in 2004. He allegedly tried to convince Mugabe to retire and make way for his business partner and long-time presidential hopeful, Emmerson Mnangagwa, a strategy that underestimated the intensity of the succession race and resulted in a fierce Zanu-PF backlash.

Sources close to the consortium of indigenous businesspeople say Fumana had applied for a concession which falls under the Ministry of Lands and Land resettlement, but Minister Didymus Mutasa had given preference to a belated application by Bredenkamp because of his Zanu-PF connections.

The Western Area Coalfields was allocated to ZPC, but the stipulated period to develop the coalfields elapsed before the power utility undertook any tangible work on the concession. It is highly unlikely that ZPC would make any meaningful development of a mine in five to seven years.

Hwange Colliery Company (HCC), which is also vying for the same coalfield, has neither the production capacity nor the financial resources to develop a mine in the short term.

The project envisages providing thermal coal to Hwange Power Station Stage 3 which Hwange Colliery Company is not likely to be able to support under its current performance that has resulted in coal shortages for industrial and agricultural as well as for domestic use. Fumana Energy also envisages mining coke for internal markets such as the Zimbabwe Iron and Steel Company (ZISCO), Zimbabwe Alloys and Zimasco as well as for export while providing general purpose coal to support agricultural and domestic needs.

According to the project blueprint, mining coal-bed methane which has an assortment of other applications such as petrochemicals and fertilizers would buttress foreign currency generation through exports.

Fumana CEO, Lupepe, in June last year said in a letter to President Mugabe the project would bring economic development to the Matabeleland region, increase foreign currency inflows through the export of coking coal and increase employment.

“We think that this is a unique opportunity for Zimbabwe to demonstrate its ability to address the current challenges being faced, through a joint venture partnership that empowers the people of Zimbabwe, retains national ownership while increasing the country’s electricity generation capacity” the letter says in part.

Fumana requested government support in the form of a Letter of Support for submission to the Mining Commission; authority to negotiate with ZPC which holds mining concessions through two special grants for the proposed site of the venture and a government Pledge of Security to boost investor confidence.

Source: Zimbabwe Times

Mining Reforms In Zimbabwe Recovery Plan

A number of reforms for Zimbabwe's mining industry form part of a new economic recovery plan, presented to the country's cabinet by Reserve Bank Of Zimbabwe governor, Gideon Gono. The plan includes an ambitious proposal to "rand-ify" the Zimbabwean economy.

Contained in a copy made available to The Zimbabwe Observer is an ambitious plan to "informally" adopt the rand "alongside the Zimbabwe dollar" as a first step torwards bringing the country into line with Lesotho, Namibia and Swaziland which have a formal monetary link with the South African currency.

The exchange rate will be market-determined which is meant to "rejuvenate" key productive sectors of the economy.

Plans for the country's mineral and metals industries include:

- revising the mandate of the Zimbabwe Mining Development Corporation so that it undertakes exploration and discovery of new deposits;

- banning the export of unprocessed platinum;

- monitoring by Government agents of the "production, refining and valuing of precious metals" on site. This applies to gold, diamonds, platinum group metals and emeralds;

- a special team should be established to "operationalise" a diamond mine at Chiyadzwa. This should be done "well in time for the adoption of the Rand";

- the privatisation of Zisco - the Zimbabwe Iron And Steel company - which would lose its monopoly over the country's iron ore reserves;

- imports of stainless steel, specialist steels and rolled plate should be "discouraged" to help foster local beneficiation of minerals;

- the shareholding of Hwange Colliery Co should be restructured to bring in new investment capital so that the mine can be recapitalized;

- a "use it or lose it rule" should be applied to the two chrome manufacturing companies that hold "Vast swarths" (!) of unexploited deposits;

- chrome ore "must not be allowed to leave the country without value addition";

- small-scale chrome miners should be assisted to set up more smelters around the country;

- a special taskforce should be set up to draft legislation guiding the extraction and marketing of platinum. A platinum refinery will become a viable proposition once ZMDC joint-venture platinum mining companies start operations. There is no other mention of these companies;

- legislation should be introduced to require nickel mining companies who have closed producing mines to release the properties to "interested parties";

Source: Zimbabwe Observer, London