Zimbabwe mining companies and players to watch

Zimplats: New mine development

Zimplats will continue the development of Mupani mine, which will replace two of its older mines, Rukodzi and Ngwarati mines, which deplete in FY2021 and FY2025 respectively. The project is ahead of schedule, the company has reported.

The new mine is scheduled to reach full production of 2.2 million tonnes per annum in August 2025, at an estimated total project cost of US$264 million. Of this budget, US$79 million had been spent on the project by December 2019.

A total of US$90 million had been spent on the redevelopment of Bimha mine as at 31 December 2019.

Impala Platinum: New land for expansion

In 2019, Impala Platinum began talks to buy land from rival Anglo American Platinum (Amplats), as part of a plan by the world’s second-biggest platinum producer to boost output from Zimbabwe. Impala operates the Mimosa platinum mine. Amplats’s Unki mine has two properties adjacent to Mimosa.

Metallon: Asset sell-off

Once the country’s largest gold producer, Metallon was forced to place three of its mines – Shamva, Mazowe and Redwing – under care and maintenance. On the application of unions, a court placed Mazowe and Shamva into corporate rescue, which may delay plans for a sell-off.

The assets are ripe for a takeover, but a mix of political pressure, a large pile of debt and lack of clarity on the extent of its resources have stood in the way of the mines attracting quality buyers.

Metallon founder Mzi Khumalo has been battling accusations of externalising US$31 million from the country. In turn, he has sued the Reserve Bank of Zimbabwe for what he claims are unpaid gold sales. The legal rows have led to the collapse of his relationships with Government, making his exit inevitable.

Canada-based B2Gold considered buying Shamva gold mine, but its interest cooled after Government rejected the company’s demand that it be exempted from selling its gold to Fidelity Refiners, the Reserve Bank of Zimbabwe’s gold buyer.

Shamva was last valued at US$167 million in 2012.  The news to watch in 2020 is who ends up with Metallon’s assets.

Eureka Mine: Open pit mine

In 2019, Padenga Holdings acquired an interest in Eureka Mine, a long idled gold mine in Guruve, through a 50.1% shareholding in Dallaglio Investments.

Apart from Eureka, Dallaglio’s assets include Pickstone Peerless in Chegutu, whose current output is around 27 000 ounces per year. The transaction included US$19.99 million worth of mining equipment. Padenga plans to commission an open pit mine at Eureka in the second half of 2020.

ZMDC: Legal risks

The State-owned mining company faces legal risks after British Virgin Islands-based Amari Holdings won the right to seize ZMDC assets worth US$65.9 million as compensation for Zimbabwe’s cancellation of nickel and platinum ventures in 2007 and 2008. The ruling was made by the International Court of Arbitration at a hearing in Lusaka, Zambia, in 2019.

A court ruling has also barred ZCDC from selling diamonds from claims previously held by Mbada holdings.

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