COUNTRY IN FOCUS
and Refiners, but the Zimbabwean Reserve Bank has run into
a chronic currency shortage and is not able to pay the miners
in US dollars.
Illegal mining
The illegal gold miners are accessing mostly the old
underground mines and extracting the gold-bearing vein
material with hammers and chisels and then crushing and
concentrating it on surface. These mines are very unstable in
most cases and flooded in some instances, which has inevitably
led to a number of deaths over the last couple of years. The
miners say that they are aware of the risks, but due to the high
unemployment levels, are forced to work the abandoned shafts,
selling their concentrates to middlemen who in turn smuggle
the material across the country’s porous borders.
Syndicates are also becoming more sophisticated and there
have been reports of them bringing in large earthmoving
equipment and even sourcing old Rhodesian Geological Survey
maps and documents to locate historic mines. The Marange
diamond field, close to Mutare in the east of the country,
remains an area of contention. Although the diamond areas are
heavily guarded, there are regular ingressions into the area by
illegal, armed operators who pan the material.
Currency constraints
There are reports that the old Rhodesian Geological Survey bulletins are
used by illegal miners to access some of these old mines.
Mining operations in general are hampered by the chronic
shortage of currency in the country and the unwillingness of
traders to accept the ZimBonds issued by the government.
On 24 June 2019, it was announced that the British pound,
United States Dollar, South African Rand, Botswana Pula and
any other foreign currency whatsoever shall no longer be legal
tender, alongside the Zimbabwe dollar, in any transactions in
Zimbabwe. The foreign currency black-market has also become
highly sophisticated, with the Twitter account ‘ZimBollar’ giving
the prevailing ‘dark market’ exchange rate.
The fuel situation at the start of 2019 went from bad to dire, with
an overnight massive increase in the fuel price and operators
being forced to buy fuel cash prior to delivery and notified once
stock has arrived, with no guarantee that they would in fact get
fuel. The country was also hit with a cholera outbreak in early
2019, that necessitated companies operating in the country to
import bottled water in bulk. Contractors on the ground has
also complained about the increase of road-blocks and ‘spot
fines’ being issued.
Other challenges
Most small-scale gold mines scattered across Zimbabwe were sunk in
the 1930s.
The long-continuing drought has affected water supply and
due to the dependency on the Cahora Bassa hydro-electrical
scheme, where the water levels have fallen to an all-time low,
the generation of electricity is compromised. Moreover, the
aging coal-fired power plants are also not able to meet the
demand, resulting in black-outs of up to eight hours and even
fifteen hours at times.
Their woes were compounded by the damage to energy
infrastructure during the recent two cyclones that hit the
north-east of the country. Zimbabwe was not able to pay South
African electricity provider Eskom. In addition, the country was
severely affected by the South African state-owned enterprises’
extensive load shedding during the first quarter of 2019, which
had a big impact on the platinum mining sector. Zimbabwe is
now allowing mining companies to pay in foreign currency to
secure their electrical supply.
Zimbabwe secured a USD500-million loan from the African
Export-Import Bank to try and stabilise its currency market
by offering platinum production as collateral earlier this year.
Reports of the Zimbabwean defence force mingling in the affairs
of a platinum project worth about USD4-million has negatively
impacted the development the mine.
The positives
There were a few attempts to revive some of the historic mines in the
1970s.
22
African Mining October 2019
The lithium deposits in Zimbabwe continue to attract
international interest and Premier African Minerals are making
www. africanmining.co.za