MINES and Minerals Development Permanent Secretary Barnaby Bwalya Mulenga says although the law on declaration of gold as a strategic mineral has not yet been concluded, the guarantee of securing gold from the partnership between ZCCM-IH and Sudan’s Karma Limited was based on contractual obligations of the parties.

And Mulenga says partnerships in the processing of gold are meant to complement the government’s efforts to account for all gold in Zambia.

In a statement, Mulenga stated that government was aware of the many concerns raised by stakeholders on the gold partnerships but that it had declared gold a strategic mineral meant to benefit every citizen.

“ZCCM-IH Plc has partnered with Karma Limited, a company owned by Sudanese Nationals. Karma Limited set up a gold processing plant in Rufunsa at a cost of about USD$3.5 million. Later, the company partnered with ZCCM-IH Plc. That partnership has been actualised through a special purpose vehicle called the Consolidated Gold Company Zambia Limited (CGCZ). CGCZ has been granted a Mining Processing Licence in Rufunsa District where the company has approached two Licence holders namely Chembe Gold Mine Limited and Sabi Gold Mine Limited. The partnership is to use the mineral ore material from these mining companies to process gold. That partnership entails that 65% of the gold will be for CGCZ and 35% for the Licence holders,” Mulenga stated.

“Currently, CGCZ has applied for another Mineral five Processing Licence for Mumbwa where the company has approached a licence holder called Array Limited to utilize their mineral ore material. In other words, both CGCZ or Karma Limited are not undertaking any mining of the gold ore material but partnering with existing licence holders. All the gold recovered through this partnership shall all be sold to Bank of Zambia, as per government policy. Even though the law on the declaration of gold as a Strategic Mineral has not yet been concluded, the guarantee of securing the gold from this partnership comes from the contractual obligations of the parties and the directive to ZCCM-IH Plc by Government.”

On the Array gold ore processing agreement, he said that was a private transaction with CGCZ.

“The partnership in Mumbwa involves Array Limited supplying gold ore for processing to CGCZ in Mumbwa and Karma will invest USD$2.5 Million for the establishment of the processing Plant. This is a commercial transaction in which a private licence holder (Array Limited) elected to partner with CGCZ for the mineral ore material to be processed by CGCZ. The concept of partnering in business, is done for different reasons, including the fact that one would like to mitigate the risks of not having the technology to process,” Mulenga stated.

He stated that the current old policy did not state that gold would exclusively be mined, processed and handled by Zambians, but rather ensured that all gold from artisanal miners was bought through ZCCM-IH Plc to Bank of Zambia to build strategic reserves.

“Almost 92% of all licences in Zambia are owned by Zambians. The government policy in mining is to encourage both Local and Foreign Direct Investment (FDI) in the sector. Mining requires huge capital investment which prompts licence holders to borrow from Banks and other investors. Licence holders are free to use any lawful source of capital available to them to achieve the licence conditions…The Policy also tasks ZCCM-IH Plc to be involved in the opening of new gold mines at small and large scale levels, hence the involvement in Kasenseli in Mwinilunga,” Mulenga stated

“The policy does not entail grabbing or expropriating existing gold licences from the holders in favour of ZCCM-IH Plc, but rather encourage more gold mines to be established in the country whose gold production would end up with Bank of Zambia. Licence holders are free to partner with ZCCM-IH Plc to exploit the gold resources. This Policy has not been fully realized because the law is yet to be amended to actualize the policy aspirations. This is why gold producing companies such as Kansanshi Mines Plc are not currently compelled to sell the gold to Bank of Zambia. This Policy was approved by the government in October 2019. After the Policy, the legislative changes are required to implement the policy in full because before that, there is no legal basis to compel a mine licence holder to sell the gold to ZCCM-IH Plc. In line with the Policy, Cabinet on Wednesday 20th May 2020 approved a proposal from the Minister of Mines and Minerals Development, Richard Musukwa, MP for the Mines and Minerals Development Act to be amended.”

He further recognized concerns from citizens about the transactions that the ZCCM-IH had entered into in the mining and processing of gold.

“There have been concerns from various stakeholders on what the Zambian government position is in relation to gold and the partnerships ZCCM Investments Holdings Plc has entered into with Karma Limited and other stakeholders. The following is the explanation on the various aspects raised as concerns by the public and the Ministry position on the matters. Zambia is endowed with gold resources and the government remains committed to ensuring Gold benefits the people of Zambia. Government has declared gold as a Strategic Mineral meant to allow all citizens to benefit from its exploitation. This means gold must be differently handled compared to other Minerals in the country. In that vein, ZCCM-IH Plc has been mandated to coordinate efforts to purchase the gold from Artisanal miners and to also coordinate the gold trading business in Zambia,” Mulenga stated.

He stated that the country had 3,666 gold mining licences at the end of the first quarter of 2020.

“There are a lot of gold occurrences in Zambia involving almost all Provinces. The gold occurrences and resources are more pronounced in Eastern Province, North-Western, Central and Lusaka Provinces. Zambia is not fully mapped, meaning there are still areas of Zambia where we do not know what minerals are present at those locations. Gold exploration is even more difficult because in some areas, the exploration may not yield promising results of sufficient gold mineralization to justify commercial exploitation. However, sometimes what happens is that people later discover substantial quantities of gold e.g. in Mwinilunga, Kasenseli area, ” stated Mulenga.

Source: https://diggers.news/business/2020/05/25/zccm-ih-karma-ltd-gold-deal-is-secured-by-contractual-obligations-in-absence-of-law-govt/

ZAMBIA’S plans to shore up its finances took another turn last week after the southern African country amended legislation to make gold a strategic metal.

According to a report by Bloomberg News, the Zambian government will require artisanal miners to sell their gold production to the state-owned mining investment company ZCCM Investments Holdings (ZCCM-IH).

The cabinet approved the amendment of legislation on May 20, Bloomberg News said, citing the mines ministry’s permanent secretary, Barnaby Mulenga.

Zambia wants its national gold production to help the central bank build up the nation’s strategic reserves, the newswire said.

ZCCM-IH has been mandated to coordinate the purchasing and trading business in Zambia. The country mined about 4,000 kilograms of gold in 2018 and is Africa’s second-largest copper producer.

Last week, ZCCM-IH entered into a joint venture with Array Metals, a mining services company, to process production from a gold deposit, said Reuters citing a statement.

The project aims to produce about three tons of gold within the next two years, worth approximately $150m at current prices. Array Metals estimated the reserve at about three million tons of gold ore material containing between 2.5 and 3.5 grams of gold per ton, according to vice president, Chris Rugari.

ZCCM-IH has overseen the construction of 10 milling plants that will help formalise the artisanal gold sector in the country.

Bringing in artisanal gold production from the edges of society is also part of a continent-wide push to tackle the risks associated with secondary gold production including unsafe mining practices and law-breaking.

Zambia’s milling plants will have a combined processing capacity of 30 tons of ore per day and a targeted average of 7.5kg gold production per month. A gold leaching plant with a processing capacity of 8,000 tons of ore material per leach, and a targeted gold production of 17.5 kilograms per month will be completed by June.

Source: https://www.miningmx.com/news/gold/41980-zambia-advances-plans-to-shore-up-finances-as-gold-to-be-deemed-a-strategic-metal/

Despite a challenging business environment in many sectors across the globe, Zambia’s wealth of natural resources continues to open the door for new investors and opportunities. As the world begins its recovery and gradual reopening in the face of the pandemic, traditional industries require energy, innovation and reinvention.

ZCCM Investments Holdings Plc. – the mining conglomerate whose major shareholder is the Government of the Republic of Zambia – is signalling its intention to take on a leadership role in Zambia’s recovery with its announcement this week that they are partnering with a new strategic mining play – Array Metals.

This company has an estimated inferred resource by JORC standards of 3 million tonnes of gold ore in Mumbwa, with 2.53.5grams per tonne totalling to about 7,500 kgs of gold – 400 million USD in today’s prices.

The two-year exploration study in Zambia’s Central Province entailed gold drilling of 59 holes at a depth of 150 metres, with plans to extend exploration activities to include 100 holes at a depth of 400 metres in the next five years.

The decision by ZCCM-IH to partner with Array Metals through Consolidated Gold Company (CGCZ) is a promising sign that investment in Zambia continues to move forward in the face of turbulent economic times.

This development is the result of several key long-term economic strategies coming to fruition.

First, though Zambia is famed for copper mining, a diversified economy creates resilience, inspires greater investor confidence and supports sustainable long-term growth. Though Array Metals has other new mining projects with 200 million tonnes of copper ore of 2% in Chick, Marie, Ruby, Muriri and Katwaro, in the same region, the additional focus on gold shows how Zambia’s government is working to diversify the country’s economic activities and create sustainable jobs through underexplored markets such as gold.

Furthermore, the gold mine is located under the traditional leadership Chiefdom of Chief Shakumbila in Mumbwa, Central Province. Though the mine had previously been closed for many years, the discovery of the resource through exploration has revived it. Array Metals estimates that the project will create 300 local jobs immediately, with more jobs added as mining begins in earnest.

Another key feature of the endeavour: ZCCM-IH’s partnership with Array Metals encourages mid-sized mining firms venturing into exploration and mining activities. Array Metals has urged the government to support a new generation of smaller companies to take advantage of the opportunities afforded by new discoveries.

In the past, it has been unclear whether medium-sized companies have the capacity to perform mining exploration and mining activities. This partnership is an example that shows that Zambia’s mining sector is ripe for new players and that the barrier to entry is not as high as investors once assumed.

In comparison with the giants that have dominated Zambia’s mining sector, medium-sized companies are nimbler and more innovative. Array Metals is no different, with a strong focus on flexibility and deployment of the most cutting-edge technologies to streamline exploration and production. The fresh competition will spur all companies in the sector to increase outputs and efficiency, driving greater investment and progress.

As a result, larger, more established companies will no longer command monopolies, and Zambia’s government will have more leverage to garner revenue and help all citizens reap the benefits of the assets under Zambian soil.

This development also shows that there is a conducive environment for investment in Zambia more broadly. Growing production of copper and gold in Zambia, creating jobs for Zambians, increasing the country’s GDP and introducing fresh competition in key sectors will add value in both the short and the long term.

The joint venture partnership between CGCZ with Array Metals is a powerful symbol to international investors, increasing confidence in Zambia’s mining sector and in the Zambian economy overall. In times of uncertainty, investors must weigh their decisions carefully. This partnership is a step forward that demonstrates to Zambians and to the world that ZCCM-IH is looking toward the future.

Source: https://www.itnewsafrica.com/2020/05/mining-sector-leading-economic-recovery-in-zambia/

ZCCM Investments Holdings has entered into a joint venture through its subsidiary Consolidated Gold Company Zambia, with Array Metals, a global mining firm to process gold ore in Mumbwa, west of Lusaka.

An initial investment of approximately 2.5 million Kwacha will be pumped in the first stage of the project and will go towards the setting up of a gold wash plant and other mining machinery to mine and process placer gold raw material.

In the agreement, CGCZ will hold a 65 percent stake and Array Metals Zambia 35 in the project with the initial phase targeted gold production of about 3-tonnes, worth about 150 million United States Dollars at current prevailing market prices.

Speaking after signing the agreement, Array Metals Group Vice President Chris Rugari said the overall targeted gold production is 7500 hundred kgs from the resource, estimated to be worth 400 million dollars at the current prevailing market pr
ce.

He however said the agreement with CGCZ will first process part of the resource and later ramp up production and processing.

And ZCCM-IH Chief Executive Officer Mabvuto Chipata said the strategic drive to harness the gold potential as mandated by Government from areas with recorded gold occurrences in the country is aimed at contributing to the 40 tonne target, which can only be
chieved through such partnerships.

And, CGCZ Chief Executive Officer Faisal Keer said the firm is partnering with various small-scale gold miners in the country by providing mining technical expertise, access to earth moving machinery and gold processing lines to kick-start and boost their gold production.

Mr. Keer said the mining and processing operations in the Mumbwa project is earmarked to start by mid-June 2020, once all statutory and regulatory approvals are obtained.

Source: https://www.znbc.co.zm/news/zccm-ih-in-joint-venture-for-mumbwa-gold/

Zambia’s state mining investment company ZCCM Investments Holdings (ZCCM-IH) has entered into a joint venture with mining services firm Array Metals to process production from a gold deposit, the company said in a statement on Wednesday.

Africa’s second-largest copper producer, Zambia, is trying to diversify its revenue base, and aims to produce 40,000 kg of gold in 2020 from primary and secondary sources including gold bought from small-scale miners.

ZCCM-IH subsidiary Consolidated Gold Company Zambia (CGCZ) will hold 65% of the project processing gold in Mumbwa, west of Lusaka, with Array Metals Zambia holding 35%.

The project aims to produce about 3 tonnes of gold within the next two years, worth approximately $150 million at current prices, the statement said.

Array Metals estimated the reserve at about 3 million tonnes of gold ore material containing between 2.5 and 3.5 grams of gold per tonne, Vice-President Chris Rugari said.

The overall targeted gold production is 7,500 kg from the resource, but under the agreement only part of the deposit would be processed before ramping up production, Rugari said.

Rugari said Array Metals hoped to contribute to the development of Mumbwa, traditionally known for agriculture, through economic diversification and job creation.

Zambia has also built 10 milling plants to process gold in a drive to formalise artisanal and small-scale miners and diversify from copper mining, ZCCM-IH said last week.

As part of the push to monetise gold resources, the government is also trying to make copper mines account for the gold they produce as a by-product of the mining process. First Quantum Minerals’ Kansanshi Mine, the only copper mine that has declared its gold production, produced 4,200 kg of gold in 2018.

Source: https://africanminingmarket.com/zambia-partners-with-array-metals-to-process-gold/6927/, https://www.reuters.com/article/zambia-mining/zambia-partners-with-array-metals-to-process-gold-idUSL8N2D21AL

The COVID-19 Pandemic has shaken every economic cluster to the core and has left the world grappling with economic challenges that dwarf the global financial crisis of 2008.

The mining sector has not been spared and has had to quickly reorganise under exceptional circumstances. This shock is also being felt in one of the most vulnerable constituents of the mining industry which is artisanal mining. It is important not to forget this group in the race for COVID-19 survival.

The artisanal sector has always been the pariah of the mining industry; circumspectly acknowledged but never entrusted with meaningful resources and support.

As governments craft rescue packages, the artisanal mining sector should also be afforded attention, especially in Southern Africa, where the vocation largely remains unintegrated.

Artisanal mining should not be shunned or left to collapse post COVID-19 because the sector has a direct impact on the livelihoods of many vulnerable urban and peri-urban communities. The survival and support of this sector is of strategic importance to economic development agenda in Southern Africa.

Thus, the COVID-19 pandemic presents an opportunity to increase state influence and direction in the development of this sector and this opportunity should not be wasted. It is important for governments and industry players to re-look at how this sector can be purposefully included in the new economic matrix.

Recent reports on the artisanal sector have stressed the apparent unpreparedness and vulnerability of these miners. There is need to increase awareness on the pandemic in mining areas, assist with safety and health supplies, improve access to healthcare and to revise the regulatory structure of the sector.

It is important to mobilize and donate resources towards this cause because of the high mobility of artisanal miners and traders within countries and between borders in Southern Africa. Mobility is at the heart of the transmission of COVID-19 and as the region slowly reopens it is important to anticipate and manage the implications of mobility in the artisanal sector.

Presently artisanal miners do not have direct access to state assistance because many operate at the periphery of the mining industry. They also do not have enough resources to protect themselves and those around them effectively.

As such, consumables such as sanitizers, bleach, masks, thermometers, freshwater and gloves must be distributed in communities surrounding artisanal mining sites. It is also important to extend free COVID-19 screening, testing and monitoring services in the surrounds of artisanal hot spots.

This can be effectively achieved by mapping artisanal mining activity and setting up mobile services in the communities that host and surround these miners. This approach will encourage miners to report cases and be proactive about receiving appropriate assistance.

It has also been noted that disruption of supply chains, restricted movement and constrained liquidity have had an impact on prices. The Artisanal Gold Council has made available a report that has followed the recent price trends in artisanal gold supply chains in parts of Africa, Latin America and Asia.

Generally, the Council noted that gold spot prices being offered to artisanal miners fell since the advent of the pandemic. The drop ranges from 19% to as much as 60% in some of these areas. It is trite that the sector is susceptible to a higher degree of negative disruption and market fluctuations because there are no safeguards to insulate such miners from the extremes of volatility.

The result of depressed prices is added strain on miners and consequently on their ability to sustain their small operations. The collapse of liquidity in these informal eco-systems should be avoided at all costs as it directly affects the livelihoods of vulnerable communities and could possibly increase the pressure for prolonged humanitarian assistance in such areas. It is important to enable miners to keep mining and be able to fend for themselves safely.

Illegal artisanal mining is supported by the black market and whilst the black market offers convenience and unrestricted activity, it remains primarily predatory in nature. It is important for governments to target and diminish the influence of the black market by creating an alternative trading prospect for these miners.

Governments need to establish a system that directly buys product from artisanal miners. It is important to assert government buyers as the primary buyers in this sector and consequently as the buyer of choice.

Such a system will benefit both parties by ensuring that artisanal miners receive fair and stable prices and governments are also resultantly able to account for product that is ordinarily smuggled out of the country.

An open relationship would also ensure that miners can cut out middlemen, retain more income and have a simplified supply chain which is an easier chain to keep open even in exceptional circumstances such as been occasioned by the pandemic. This approach insulates the sector and ultimately lessens disruption and volatility to their livelihoods.

This system can also be bolstered by pairing collaboration with benefits such as access to more claims, bespoke health care products or financial and technical assistance. Artisanal miners understand the disadvantages of their current business models and would therefore support an alternative that affords them a greater degree of stability, continuity, access to amenities and increased capacity.

Once a positive relationship has been established it is easier to navigate the full integration of this sector in a sustainable and viable manner. The direction that Zambia is taking by utilizing its state-owned mining company ZCCM-IH to directly buy gold from artisanal miners is a good step towards managing the sector more efficiently and should continue to be developed until it delivers a competitive and inclusive model for the artisanal and small scale mining sector.

Artisanal mining is at the heart of achieving inclusive transformation in the mining industry because it is rightly placed to benefit the very target constituents that play a direct role in facilitating broad based development.

It is trite that with or without the impacts of the pandemic mining countries in Southern Africa were already struggling with increasing rates of unemployment owing to deteriorating economies.

It is therefore reasonably foreseeable that with the rising unemployment being instigated by the pandemic, the artisanal mining sector will extend further in the short to medium term. It is important for governments to anticipate this growth and move to quickly sanitize the sector by creating a sustainable and viable formalization solution.

It is a considered view that the only way to uplift the informal sector would be to craft safeguards and rules that protect capital and encourage innovation in this cluster. Naturally, capital and innovation will remain inaccessible to the informal sector because there are no structural and legal safeguards to protect ideas or investment.

The sector will struggle to grow if it cannot acquire a status that enables it to be a suitable destination for investment and ideas. Presently the artisanal sector is supported by linear capital from buyers, little free funds available to the artisanal miners through other means and from donor driven project financing from non-governmental interest groups.

All these financing options are limited and erratic and therefore cannot not spur or facilitate the needed lift to create sustainable growth, hence the continued impoverished existence of artisanal mining.

The future of the mining industry requires a balanced industry in which both large- and small-scale are competitive alternatives. It would remain unfortunate for mineral rich countries in Africa to fail to fully take advantage of the accrual of social capital and the potential for broad-based development that can be attained by creating a solid and comprehensive legal, financial, and institutional structure to support the artisanal mining sector.

Source: https://www.miningreview.com/gold/securing-a-place-for-artisanal-mining-post-covid-19/

The Zambian government’s majority-owned ZCCM Investments Holdings PLC has started 10 gold milling plants with a combined processing capacity of 30 tonnes per day, targeting average monthly output for 7.5 kilograms of gold.

The milling plants are part of phase one of the company’s gold processing project in Rufunsa under its 45%-owned joint venture, Consolidated Gold Co. Ltd.

About US$3.5 million will be spent on the Rufunsa project, the company said May 13.

Consolidated Gold CEO Faisal Keer said that the business model involves giving various artisanal and small-scale gold miners access to the milling plants to boost gold production.

Reuters reported the same day that Zambia is looking to formalize artisanal and small-scale miners in a bid to tackle informal gold mining and diversify from copper.

The state mining investment company is targeting production of 40,000 kilograms of gold in 2020 from primary as well as secondary sources, the news wire added.

ZCCM approved a proposal in early-January to enter a joint venture to develop a gold processing and trading operation in Zambia with local gold processor Karma Mining Services and Rural Development Co., which holds the remaining 55% stake.

The company noted that next stage of the first phase is also underway, which involves setting up the gold vat leaching plant to chemically process gold stock piles from two old gold mines, and concentrates from the gold milling plants.

The vat leaching plant will have a processing capacity of 8,000 tonnes of ore material per leach and will target gold monthly output of 17.5 kilograms. Completion is scheduled by June and official launch of the project is scheduled for July following production of a few gold dore bars.

The milling and vat leaching plants are expected to produce 25 kilograms per month.

Phase two of the project will involve setting up the same model in Mumbwa district, and is expected to start before year-end.

Zambian Ministry of Mines Permanent Secretary Barnaby Mulenga said in December 2019 that the country aims to boost revenue from gold production by accounting more thoroughly for volumes of the precious metal produced as a byproduct of copper operations, Reuters reported.

Source: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/zambia-state-jv-starts-processing-gold-from-informal-miners-58619951

Consolidated Gold Company Ltd Commences Phase One Of The Gold Processing Project In Rufunsa.

The Phase involves ten (10) gold milling plants with a processing capacity of 30 tonnes of ore per day, and a targeted average of 7.5 kilograms gold production per month.
The next stage of the Phase is also underway which involves the setting up of the gold vat leaching plant in Rufunsa. The plant is aimed at chemically processing the gold stock piles from two old gold mines, and concentrates from the gold milling plants.

Gold US$1,717/oz vs US$1,703/oz yesterday – Zambia to begin processing artisanal gold 

Zambia has built 10 milling plants to process gold produced by informal miners, in attempt to diversify from copper mining- according to the state mining investment company ZCCM-IH. 

The project is being undertaken by Consolidated Gold Company and ZCCM-IH, and is part of a continent-wide push to tackle informal mining of gold which deprives African states of revenue. 

Zambia aims to produce 40,000kg of gold in 2020 from primary and secondary sources, and intend to complete a gold leaching plant with a targeted gold production of 17.5kg per month by June (Reuters). 

The ten milling plants will have a combined processing capacity of 30 tonnes of ore per day and a targeted average of 7.5kg gold production per month (Zambia Daily Mail). 

Source: proactiveinvestors.co.uk/companies/news/919584/morning-view—gold-prices-continue-to-rise-on-second-covid-19-wave-fears-919584.html