HARARE — Mining in Zimbabwe seems to be entering a golden phase, with mining executives increasingly seeing value beyond the current difficult environment.
It seems they love the country, but perhaps they fear and loathe it as well.
They are enthusiastic about its low-cost nature, unproblematic labour environment and mineral deposits that are closer to the surface compared to other mining areas such as South Africa.
Zimbabwe is the one country they have stuck to, even in spite of political uncertainty and regulatory upheavals.
“The labour is good. The VAT is good,” Kalaa Mpinga, chief executive officer of Mwana Africa, which has nickel and gold operations in the country, said.
Mwana Africa’s Bindura Nickel Corporation is listed on the Zimbabwean Stock Exchange and is working towards full restart of its nickel smelting operation.
The Bindura nickel smelter, says Zimplats chief executive officer Alex Mhembere could also be utilised by the other platinum miners in Zimbabwe — Anglo Platinum and Aquarius Platinum — which are not building refineries of their own in line with a government directive.
Mhembere says Zimbabwe is attractive for its shallower mines. His company owns four producing mines, including one that collapsed last year and is now being upgraded and a fifth will be commissioned by 2019 to replace two of its producing properties.
“In SA they are now going up to 2km (deep). We still remain very shallow mines,” Mhembere said in an interview.
He added that Zimplats’ Ngwarati Mine was the shallowest (at less than 300m) while the collapsed Bimha mine and the Portal 5 operation — which will become fully operational in 2019 — are a bit deeper. The Portal 5 will be the deepest Zimplats mine at between 500 and 600m.
The other platinum mines in Zimbabwe, Mimosa and Unki, are also shallower compared to South Africa operations.
Mzi Khumalo’s Metallon Gold is even mulling a London listing this year, with reports saying some of its mines have upped production.
The large elephant in the room, however, has always continued to be government demands for foreign miners to give away 51% shares to locals.
The government is also requiring that all mining companies fully refine the minerals they are mining inside the country.
Lower commodities prices have been problematic while the Chamber of Mines says the cost of electricity has been spiking because of a guaranteed arrangement Zimbabwean miners have to bring power straight from Mozambique.