Sunday, June 17, 2018

State overhauls strategic mineral policies

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Sharon Munjenjema
A new diamond policy will be launched next month, raising expectations of greater investment in the key sub-sector.
Authorities in Harare have also heightened efforts to enhance the operations of small-scale and artisanal miners, with a $50 million deal having been signed between Government and private investors last week.
An additional $100 million to finance the sector has also been secured from China.
Mines and Mining Development Minister Winston Chitando told The Sunday Mail last week that the diamond policy would cover exploration, cleaning, sorting, value addition and ownership structures.
“All I can say is a diamond policy will be published in July . . . I can’t disclose the contents of policy that will be disclosed by His Excellency, the President. It’s a policy which obviously fits into the provisions of the Mines and Minerals Act. I think I would rather talk of the view after the policy,” he said.
It is understood that Government’s policy reviews include lithium, gold, chrome and coal.
Lithium
According to Minister Chitando, the new lithium policy will prioritise value addition.
“The whole idea is, when the players extract lithium, they value-add to a lithium concentrate which is exported.
“However, over and above that, we would like to see the lithium being upgraded to lithium carbonate. The lithium carbonate becomes a value-added concentrated lithium product with 99,9 percent purity, so this fetches a much higher price. And it fits in line with Government’s value addition policy.”
Lithium oxide with a grading of between five and six percent is exported through off-take agreement at prices of about $600 per tonne. Lithium carbonate sells for prices ranging from $15 000 to $20 000 per tonne.
Government has proposed an export tax of five percent of the gross value of exported lithium with effect from January next year.
Australia Stock Exchange-listed Prospect Resources, which controls the Arcadia Lithium Project 35km west of Harare, says tests conducted in October last year proved it was possible to produce battery-grade lithium carbonate.
The firm wants to build a chemical plant for lithium carbonate, the “first plant of this type in Africa and one of the few plants outside China”.
Gold
Minister Chitando also indicated that a policy for the gold sector, which is targeted at increasing production to 100 tonnes per year, will be announced in the next four weeks.
Statistics from the Reserve Bank of Zimbabwe show that gold output has been progressively rising, and in January to May, deliveries rose 65 percent to 13,3 tonnes from the corresponding period a year earlier.
Government is supporting small-scale gold producers, who managed — for the first time in 10 years — to beat deliveries by large-scale miners.
In addition to the recent $40 million gold development facility from the central bank, Government has secured a $100 million facility from China.
Further, South Africa’s Moti Group and its strategic local partner, Sakunda Holdings, last Tuesday committed $50 million to small-scale miners.
Said Minister Chitando: “. . . that $50 million is targeted at small-scale miners for them to be assisted in mining production, so Government is trying to do a lot in assisting small-scale miners”.
Under the 20-year financing facility, whose disbursement will begin next month, small-scale miners will receive loans at zero percent interest.
“There is going to be a management committee which (will facilitate) co-operation between investors and ministry to try and assist in identifying the beneficiaries. Those are the modalities which will be agreed by the management committee,” he said.
To create a platform to promote the interface between Government and miners, Government is encouraging stakeholders to create sector-specific associations that report to the Chamber of Mines of Zimbabwe.