When the Minister of Mines and Mining Development, Winston Chitando, announced the US$12 billion target in 2019, many people thought the minister was daydreaming. Some whispered that the minister had taken bootlicking to new levels as they could not believe that the mining sector could rake in US$12 billion by 2023. However, in this interview with our Editor-in-Chief, Munyaradzi Huni (MH), Minister Chitando spells out clearly the journey that has seen the mining sector becoming one of the main anchors of Zimbabwe’s projected economic growth. The minister talks about the investments in the mining sector that have seen the reopening of some old mines, the expansion of existing ones and the opening up of new mines. The buzz in the mining sector is clear evidence that Zimbabwe is on track to achieve Vision 2030. “I have been in this sector long enough and so I know what is needed to make the mining sector tick,” says Minister Chitando.
MH: Zimbabwe’s mining sector has been awash with a lot of activities over the past few years. Minister, can you give us a brief overview of the mining sector in 2022 and what we should expect in 2023 and beyond?
Minister Chitando: I would classify developments in the mining industry in 2022 into four categories. Firstly, the mining capacity which we had at the end of 2021 which continued to operate at very high levels. The second category comprises projects which were commissioned in 2022. Some of them were commissioned early in the year while some were commissioned towards the end of 2022. Those that were commissioned towards the end of 2022 did not contribute significantly to the whole year in terms of their economic potential. The third category comprises projects which were undergoing construction and will be commissioned in 2023. It is these three categories that will contribute to the US$12 billion target by 2023. A more up-to-date appraisal of the US$12 billion target will be done sometime in early 2023. However, at this stage, I would like us to have an in[1]depth feel of where we stand and how the US$12 billion target is going to be achieved. In terms of the projects under construction and expected to be commissioned next year (2023), these are too many to enumerate, but I will sin[1]gle out four for special mention. – the Arcadia Lithium Mine, the Sabi Star Mine, the Bikita Mineral Expansion and the Manhize Iron and Steel project. These four projects, on their own, just these four, their impact on our target will be a minimum of US$5.5 billion. If you take the first category of projects which were there at the end of 2021 and continued to operate and some of the projects that were commissioned in 2022, the sum total of these two categories is what will give us our US$12 billion. The fourth category comprises projects which were put in motion, in some cases under construction, and will be commissioned beyond 2023. These projects obviously will not contribute to the US$12 billion. These will form part of the 2028 target as well as the 2030 upper-middle income economy. The focus for 2023 will be more or less the same as 2022. The focus will, firstly, be the capacity we had at the end of 2022 – to ensure that capacity continues to operate at optimum level. Secondly, in 2023, the focus area will be those projects which will be commissioned in 2023. These projects include the three lithium projects as outlined earlier (Arcadia, Sabi Star and Bikita Minerals), the iron and steel project, the Zimplats Concentrator and a few other projects. Thirdly, we will have new capacity from projects under con[1]struction. We have projects which have already been consummated in terms of the various Memoranda of Understanding (MoUs). Discussions with investors will continue, for example, the Mines to Energy Park in Mapin[1]ga, which will comprise several related projects. We will ensure that construction of these projects is accelerated. The fourth focus area will be projects that will come into play next year (2023). These will be entirely new projects as we move towards the 2028 target and also towards the 2030 vision. In a nutshell, this is the overview for 2022 and the focus for 2023.
MH: Can you elaborate a bit on the projects that will be commissioned in 2023?
Minister Chitando: We have the Arcadia Lithium Mine which will be com[1]missioned within the first two months of 2023. Up next we have the Sabi Star Mine which will be commissioned around mid-2023, followed by the Bikita Minerals Expansion, a massive expansion project, which will be commissioned around August 2023. Then there is the Manhize Iron and Steel project, whose Phase One is almost complete and Phase Two is about to commence. Meanwhile, Dinson Colliery are working flat out to have their new coke project commissioned in 2023. We also have the South Mining coke works whose commissioning is slated for 2023. Also earmarked for commissioning in 2023 are the Murowa Diamonds plant, Zimplats Concentrator and the Pickstone Mine project, among several other projects.
MH: So would you say the mining sector is growing? If yes, what would you attribute that growth to?
Minister Chitando: The mining sector is expected to contribute significantly to the country’s economic growth towards an upper-middle income economy by the year 2030 as enshrined in the National Development Strategy 1 (NDS1 2021-2025). The major minerals that are going to spearhead growth in the mining sector include gold, platinum group metals (PGMs), chrome and ferrochrome, nickel, diamonds, lithium, coal and hydrocarbons. The mining sector is expanding through a number of interventions including new investments, increased mineral exports, value addition and beneficiation, opening of new mines, resuscitation of closed ones and increased capacity utilisation at existing mines.
MH: Minister, is there growth in terms of employment in the mining sector? Has there been an increase in the number of people employed in the sector over the past five years?
Minister Chitando: Zimbabwe’s mining sector plays an important role in the socio-economic development of the country, particularly through employment creation. The mining sector employed a total of 106,151 people directly as at the end of October 2022. There has been a significant increase in the number of mining employees from a baseline of 77,799 at the conception of NDS1. The number is significantly higher when you factor in the impact of downstream industries.
MH: The recent discovery of lithium has really excited many investors. How are you going to ensure that Zimbabwe gets maximum value from its minerals?
Minister Chitando: Let’s take a glimpse at the value chain of lithium. We have lithium ore, lithium concentrate, then lithium carbonates, then lithium salts which are ready to go into battery manufacturing. At the moment we have companies that are coming into play this year. This will all be at lithium concentrate stage. In terms of the agreement that was signed with Eagle Canyon for the establishment of the Mines to Energy Park in Mapinga, the sole objective is to do value addition into lithium salts which are battery trade ingredients. Beyond the lithium salts we want to venture into battery manufacturing. The framework is there and the agreement has been signed. Having said that, without mentioning any names, there are also one or two other lithium players who are also looking at the value chain beyond the lithium concentrates. The term concentrates applies to all those lithium by-products that feed directly into battery manufacturing. Let’s use platinum as an example. A Base Metal Refinery will be constructed by a number of companies in a joint venture. That is government policy which can be extended to lithium. One company can say, we can’t go into battery manufacturing on our own. We will team up with Company A and Company B and construct a Base Metal Refinery. Another company can say, no, no, no we want to do everything on our own. From a government perspective, as long as there is a Base Metal Refinery, we are happy. Similarly, from a government perspective, we are happy that the lithium players are happy to invest into the lithium value chain so that at the end of the day, we also have material which is ready to go into battery manufacturing. More importantly, we already have a player who has committed to manufacture batteries. That alone is a very exciting development. In addition, the recent ban, through a Statutory Instrument, of lithium exports is also meant to ensure that there is higher value addition that will benefit the country.
MH: But there are fears that lithium prices will fall in 2023?
Minister Chitando: Let me put it this way, if you go and study the platinum market today, you will have so many forecasts of where the prices of platinum will be. If you go into the gold market, you will also have quite a number of forecasts and theories about gold prices. Lithium, it’s the same. It is the same with diamonds and so on. What is important in commodities marketing is to ensure that you are efficient and you are on the lower cost curve in terms of production. Should there be a fall in demand and prices tumble, you remain viable. As an example, during and soon after the Covid-19 pandemic, the prices of diamonds nosedived, but Zimbabwe continued to produce diamonds. Now the prices have firmed and we continue to produce. It’s very difficult to tell precisely which direction prices will go. What is important for us as a country is to ensure that we are efficient, the producers are efficient from a cost-effective point of view and they can withstand the fluctuations in the commodities market.
MH: Minister, you spoke about the Mines to Energy Park that will be built in Mapinga. Can you tell us what exactly will be in this park?
Minister Chitando: The Mines to Energy Park in Mapinga will really be a park where we will undertake value addition to a variety of minerals, coal for example. Two by 300-megawatt power stations and coke oven batteries will be constructed in the park. Our target there is to have a coke oven battery with a capacity of one million tonnes, which will make it probably the biggest in Africa. Of course, Dinson Colliery is also constructing its own one million-tonne coke over battery. Government has allocated a graphite mining concession in Mashonaland West. So there will be a graphite processing plant at the park. There will also be a chromium-nickel alloy plant. Essentially, we do have chromium alloy plant like Zimbabwe Alloys and Zimasco. These two produce ferrochrome alloys. The Mapinga Mines to Energy Park will go a step farther as it will be a chromium-nickel plant which is a much more valuable product. Also in the park will be a nickel-sulphate plant with some of the nickel being sourced from a concession in Guruve. Last, but not least, the park will also house a lithium salt plant. The plant will be the final stage of value ad[1]dition before battery manufacture.
MH: Of all the areas in Zimbabwe, why did the government choose Mapinga?
Minister Chitando: First and foremost, remember President Mnangagwa’s mantra of leaving no one and no place behind in terms of development? We are putting that mantra into practice in the mining sector. This park will be on 5,000 hectares of land. Secondly, and of particular importance, is the availability of water. Mapinga is close to the Gwebi River. Almost all the plants that will be in the park will require a lot of water. Darwendale Dam is also a stone’s throw away. Thirdly, there is already a very good road network that will make transportation of goods and was the KP Chair. At the Botswana plenary meeting in November 2022, Zimbabwe was confirmed as the KP Chair for 2023 by consensus. Zimbabwe then requested for a KP Peer Review Visit in May 2022 to assess its compliance status to the KP. The report of the assessment was successfully presented and adopted at the plenary with positive reviews.
MH: Briefly tell us, what is this KPCS and what does it mean for Zimbabwe to chair this organisation? What are the benefits to the country?
Minister Chitando: The KPCS is a global body created under the United Nations General Assembly Resolution 55/56. It is responsible for the eradication of conflict diamonds from the global trade in diamonds. The assumption of the KP chairmanship is a positive step and a vote of confidence in the Zimbabwe mining industry. The diamond market is sensitive to the perceptions of the origins of the mineral and as such we believe Zimbabwe will benefit through a positive market perception of our diamonds. Leading the KPCS presents an opportunity for the country to contribute to the global diamond industry.
MH: Minister, you set a US$12 billion mining sector target by 2023. Is the ministry on course to meet this target?
Minister Chitando: The mining sector remains on course towards the attainment of a US$12 billion target by the year 2023. A total of US$5.2 billion was realised in mineral exports in 2021 from a baseline of US$2.7 billion in 2017. This represents a 92.5% increase in terms of mineral exports. As I have already indicated, we have a number of significant new projects poised for commissioning in 2023, which will materially and positively impact on the US$12 billion target. The answer is, yes, we are well on course to achieving our target.
MH: Speaking during the 2021 Mining Industry Sector Awards at State House, President Mnangagwa said: “As a strategic sector you have what it takes to accelerate the realisation of the US$12 billion milestone by 2023. This must be premised on the reopening of closed mines, expansion of existing mines, opening of new mines and investment in beneficiation facilities.” Let’s start by talking about the reopening of closed mines. How many mines have you reopened and how exactly did you reopen the mines? Did you get foreign investors or you used local investors?
Minister Chitando: The Second Republic has witnessed a number of reopenings of closed mines. Notable projects include Eureka Gold Mine and Shamva Gold Mine. Reopening of the mines was done through the injection of fresh capital from new investors, both foreign and local.
MH: In terms of expansion of existing mines, which mines have been expanded as we march towards the US$12 billion target? Again, tell us about the investors.
Minister Chitando: There have been a number of notable expansion projects including RioZim Cam and Motor Biox Gold Plant Expansion Project, ZIMCN Radnor Mine, Blanket Mine Shaft Expansion, Unki Mine Concentrator Expansion, Mimosa Mine Plant Expansion Project, Zimplats Expansion Project, Afrochine Smelter Expansion. Zimasco Smelter Expansion, ZimAlloys A3 Furnace Refurbishment, RioZim Murowa Greenfields Diamond Plant Expansion Project, Dinson Colliery Coke Batteries Expansion, South Mining Coke Batteries Expansion and Bikita Minerals Expansion. Again, the projects include both foreign and local investors.
MH: Can you tell us about the new mines that have been opened? Who are the investors and how much money have they invested? How are we attracting investors despite the negative publicity against the country?
Minister Chitando: The Second Republic has also witnessed the opening of new mines. Key projects include Bravura Mine, Karo Platinum, Amazon Mineral Development, Dinson Iron and Steel Company (Tsinghan Carbon Steel Plant), Invictus Energy Oil and Gas Project, Alrosa, Prospect Lithium Arcadia Project and Sabi Star Lithium Mine.
MH: Talking about investors, there have been concerns from some investors who say the investment climate in Zimbabwe’s mining sector is not very conducive. Has the Second Republic managed to create a conducive environment for investors in the mining sector?
Minister Chitando: The mining sector continues to attract local and foreign direct investments, thanks to the Government’s policy of engagement and re-engagement which is bearing fruit. The investments I mentioned above by both local and foreign investors are a clear demonstration that the environment is conducive. Zimbabwe is really open for business. Opportunities exist for investors to invest in areas of increased exploration work, mineral extraction, mineral processing, value addition and beneficiation.
MH: Some Zimbabweans have raised concerns that as we attract foreign investors in the mining industry, we are mortgaging some of the country’s mineral resources. How far true are these allegations and what measures have you put in place to ensure that Zimbabwe does not lose out in these investments?
Minister Chitando: Zimbabwe is not mortgaging the country’s mineral resources. However, to ensure that future generations benefit from investments in the mining sector, government established the Sovereign Wealth Fund to build reserves for long-term savings. In addition, His Excellency, the President, Cde Dr E. D. Mnangagwa, introduced a new royalty policy. The policy compels miners to pay half of their royalties in the mineral commodity and half in cash in an attempt to build precious metal and mineral stockpiles for the benefit of citizens of Zimbabwe. There is really no need to worry. We know this industry very well and we know what should be done so that Zimbabweans now and in the future benefit from their minerals.
MH: President Mnangagwa has repeatedly spoken about investments in beneficiation. Are there any investments so far towards beneficiation and value addition?
Minister Chitando: Beneficiation and value addition of minerals are at the heart of the country’s national economic blueprint, NDS1. There are a number of projects coming up in this regard. These include the huge investments in coke oven batteries, diamond cutting and polishing factories, establishment of a gemmology centre, granite cutting and polishing factories, establishment of a Base Metal Refinery, expansion of chrome smelting capacities as well as a steel manufacturing project in the pipeline. Two notable value addition projects include the Tsingshan Consolidated Mining and value addition project and the Eagle Canyon Mines to Energy Park. These two projects involve value addition of coal, chrome iron ore, as well as lithium, chrome, nickel and chrome.
MH: You have been quoted as saying: “We hope to achieve the US$12 billion mark with major contributions from platinum, diamonds, gold, chrome and steel sector, coal and hydrocarbons.” Can you give us figures on how much these minerals have contributed so far to the US$12 billion mark?
Minister Chitando: A total of US$5.2 billion was realised in mineral exports in 2021 broken down as follows: · Gold – US$1.8 billion · Platinum Group of Metals – US$2.4 billion · Chrome/Iron Ore/Steel – US$368.7 million · Diamonds – US$227.6 million · Coal and Hydrocarbons – US$92.1 million · Lithium – US$11 million · Others (Copper, Granite, Nickel, Manganese, etc) – US$121.7 million
MH: Reports say local platinum producers – led by Mimosa, Zimplats and Unki – are pooling resources to construct a precious metals refinery. What is the idea behind this move and can you give us an update on progress regarding the refinery?
Minister Chitando: Government is in full support of the establishment of a Base Metal Refinery or BMR by the platinum producers. The establishment of a BMR in Zimbabwe is in line with NDS1, which set a 100% completion target by year 2025. Government signed an MoU with Zimplats at the end of 2021, under which the company will, amongst other projects, invest in a BMR.
MH: Are small-scale miners and artisanal miners also contributing to the US$12 billion target? Explain and give figures.
Minister Chitando: One of the significant contributions to the US$12 billion target is from gold. In 2021 gold delivered to Fidelity Gold Refinery (FGR) was 29.6 tonnes. This was a marked increase from the 19 tonnes produced in 2020. Looking at the current production in 2022, small-scale gold producers have delivered a total of 19.983 tonnes of gold to FGR for the period January to October 2022 out of a total of 29.456 tonnes. The contribution by small-scale miners represents 67.8% of total gold deliveries to FGR.
MH: Minister, government recently announced the new mining royalty policy where mining companies are going to pay royalties by depositing minerals at the Reserve Bank of Zimbabwe. Can you explain this policy, how it will work and the benefits to the country?
Minister Chitando: The new mining royalty policy will involve the payment of royalties for minerals being split as 50% cash and the other 50% in the form of the commodity itself. The new policy targets four key minerals, namely gold, diamonds, PGMs and lithium. The policy will enable Zimbabwe to build reserves of the minerals, while still providing some cash for day-to-day operations.
MH: Minister, we hear there are moves to amend the Mines and Minerals Act and Gold Trade Act. What are the amendments all about, what has necessitated these amendments and when will they be affected?
Minister Chitando: The amendments to the Mines and Minerals Act and the Gold Trade Act are key strategies to enhance the ease of doing business in the mining sector. The amendments catapult the country’s legislation into an internationally competitive, modern, friendly and supportive law. It further transforms the country’s law into a modern piece of legislation that is abreast with technological advancements and best practices in the mining sector.
MH: It has been noted that one of the biggest challenges in Zimbabwe concerning mines is the regulation of the sector so as to come up with a legal framework to prevent abuses such as smuggling. How rampant is the smuggling of minerals outside the country and why is the country taking long to solve this problem? What is your ministry doing to address this problem?
Minister Chitando: Amendments to the Mines and Minerals Act, once law, will enable the Ministry of Mines and Mining Development to more effectively deal with issues relating to smuggling. Some initiatives to curb smuggling include: · Establishment of a computerised information management system, such as the mining cadastre, enables the analysis of production and export trends using information and data on specific producers. Information analysis data will then be used in the monitoring for compliance exercises by Provincial Mining Offices (PMOs) and other monitoring arms of government. · The Ministry of Mines and Mining Development is carrying out intensive monitoring of mining activities through the Inspectorate to ensure mineral accounting. · The ministry is working with government security agencies such as the ZRP Minerals Fauna and Flora Unit to help curb illegal mining activities. The Ministry of Mines and Mining Development issues ore movement permits to account for minerals. Government security agencies, in particular the Minerals Fauna and Flora Unit, are specially trained to monitor movement of minerals across the country.
MH: Reports say Zimbabwe has about 60 minerals. Which minerals are we already mining and which ones are we yet to exploit?
Minister Chitando: The minerals mined in Zimbabwe include gold, platinum, palladium, rhodium, iridium, ruthenium, diamonds, emeralds, gem[1]stones, chrome, nickel, copper, cobalt, coal, chrome lithium, graphite, phosphate, granite, feldspar, manganese, quartz, vermiculite (MT). The minerals which are going to be exploited are oil, gas and rare earth elements. The plan to exploit these minerals involves invest[1]ment in the mining of the minerals.
MH: Minister, towns like Shabani, Mhangura, Hwange and others were built by mining companies that invested in their surrounding communities. Over the last decades mining companies have been extracting tonnes of minerals from this country but we don’t see any new towns coming up. Has the model where mining companies built towns died and why?
Minister Chitando: The model where mining companies build towns is still very much alive. New investments such as Ngezi in Mhondoro by Zimplats, Tsingshan Steel Plant in Manhize and Mines to Energy Park in Mapinga will result in the establishment of new towns. Just watch the space.
MH: Do you think mining companies are doing enough in terms of investing back in their surrounding communities and what is government doing to make sure communities benefit?
Minister Chitando: Mining companies are implementing a number of significant corporate social responsibility programmes (CSRs) for the benefit of local communities. Government is encouraging companies to undertake CSRs and involve local leadership in the implementation of projects that can be undertaken for the upliftment of local communities.
MH: Minister, the country continues to lose many lives through illegal mining activities. What measures is government putting in place to curb these deaths?
Minister Chitando: The Ministry of Mines and Mining Development has taken various steps to ensure the safety of artisanal miners. These include: · Intensifying inspections of all min[1]ing activities with special emphasis on safety, health and environmental (SHE) protection issues and enforcing compliance to mining regulations. · Conducting SHE awareness campaigns across all the country’s 10 provinces, educating the smallscale miners on SHE issues.
