London ,Thursday, 20th March 2020- Gemfields Executive Director Sean Gilbertson has revealed that Gemfields has incorporated all its Zambian gemstone licences into Kagem Mining Limited,expanding the footprint of its emerald mining operations in Lufwanyama following approval by the Ministry of Mines.
And Kagem / Gemfields mining Limited will construct a skills training facility in Zambia to enhance vocational skills in the area around the Kagem emerald mine.
Mr. Gilbertson made the remarks when he paid a courtesy call on Zambia’s High Commissioner to the United Kingdom his Excellency Lieutenant General Paul Mihova at Zambia House.
“We have confidence in the Zambian Government and this is why Gemfields has transferred the 11 previously wholly-owned gemstone licences to Kagem, which include the Mbuva-Chibolele emerald and the well- regarded Kamakanga emerald deposit. The transfer enhances Kagem’s resource base and production levels, mitigating the risks associated with the volatile nature of emerald mining and achieving economies of scale. Combining these factors with increased employment, revenues and associated royalties, taxes and dividends will boost Kagem’s position as the flag-bearer for Zambian emeralds and the number one producer of emeralds internationally,” he said.
Mr. Gilbertson said the move is to safeguard Kagem’s position as the leading Zambian emerald producer and one that is able to lead the emerald sector internationally especially in light of increased competition, particularly from Colombia.
He said the transfer follows Kagem’s emerald mining licence renewal to a further 25 years starting from December 2019 to April 2045 and would further Kagem’s position as the prominent global producer of emeralds, setting the stage for Zambia to remain the world’s number one emerald exporter.
And Mr. Gilbertson said the emeralds mine will construct a Vocational Training Centre which will function under the auspices of Zambia’s Technical Education, Vocational and Entrepreneurship Training Authority (TEVETA) and once operational, it will be accredited to TEVETA.
Mr. Gilbertson said the facility will include a four- classroom block, administrative buildings, teacher accommodation, and workshops at an estimated USD 1.5 million investment. The Vocational Training Centre (VTC) will provide short-course skills training in the following areas: bricklaying and masonry, carpentry, plumbing, boiler making, electrical wiring and installation and basic information technology.
Meanwhile High Commissioner Mihova has said Zambian emeralds were becoming popular and that it was encouraging to see that Zambia was a major competitor in the industry and called on investors to consider investing in emerald mining.
Kagem/Gemfields have been instrumental in promoting Zambian Emeralds to the world enlisting the help of celebrities such as American actress Mila Kunis to wear Zambian Emeralds on the red carpet.
Issued by Abigail Chaponda (Mrs.), First Secretary | Press and Public Relations, Zambia High Commission in the United Kingdom.
The rapid spread of the coronavirus (officially named COVID-19) from its origin and epicentre in the central Chinese city of Wuhan in Hebei Province to elsewhere in China in late January was perhaps the first indication that what began as a health crisis would soon be felt in economic terms by countries around the world. Zambia, with its particularly strong trade links with China, is one of them.
COVID-19 has since reached hundreds of countries which are now entering into a lockdown of their own, whilst China appears to be leaving the worst behind it. But what so far appears to be a slow return to normality on the Chinese Mainland comes with significant damage to China’s economy, which is expected to see its first drop in Gross Domestic Product (GDP) since 1976, the end of the Mao era.
Mining For Zambia spoke to acclaimed Zambian economist, Professor Oliver Saasa, and asked for his views on how the COVID-19 pandemic will affect Zambia’s mining sector, on which the country’s economy is enormously dependent.
In an upcoming article, we will look at possible policy measures and responses that Government could implement to mitigate the impending economic damage, and avert a crisis.
Copper inventory levels in China have reached their highest in almost four years, mostly due to a 13.5% decline in the country’s industrial output in a single month, from January to February 2020. The sudden excess in copper supply has sent prices for the red metal tumbling below US$ 5 000 per metric tonne for the first time since October 2016.
Professor Oliver Saasa
How will this affect Zambia?
There will be several serious effects. There will certainly be a level of decline in the global demand for copper, and that has led to a lower copper price. The economy of Zambia gets more than 75% of its export receipts from copper, so any reduction in demand will have a serious impact here at home.
Naturally, this means that Zambia’s prospects for growth in 2020 will be affected. In 2019, the government’s projection was a minimum of 4% Gross Domestic Product (GDP), but at the end of last year we posted around 2%. We are a stressed economy that has failed to meet its own set targets by less than half. In terms of projections for 2020, we are hearing figures around 3%. Still, with the coronavirus, we may not reach that.
Then there is the matter of our Foreign Exchange reserves, a pre-existing problem that will only be aggravated. Zambia’s Foreign Exchange reserves stabilised for quite a while at US$1.4 billion, until December 2019. Then they reportedly dropped to US$ 1.2 billion earlier this month. Even at US$1.4 billion, we are still talking about only six weeks of import cover, in terms of reserves in the Central Bank. In the case of a calamity — such as the coronavirus — the extent to which a country can survive without external stimulus is its Foreign Exchange reserves, for importing what we usually need. A decent economy of Zambia’s standard should have 3-4 months of import cover.
To put this in perspective, Botswana has 15 months of import cover. They can survive on their reserves for over one year. If this trend continues, and the virus is not contained, we may reach less than a billion United States dollars in reserves.
Another potential effect on Zambia is related to the fact that China is a major growth country, and countries like ours are extremely dependent on it in terms of commercial interactions. The prospects for renegotiation of our loan repayments to China might be stifled by the fact that its economy has slowed.
Would you please explain why COVID-19 is having such a major effect on the Kwacha’s exchange rate?
The free-fall of the Kwacha is, firstly, because of what is happening in China and elsewhere, in terms of reduced demand and the low price of copper, and its effect on the growth prospects on several larger economies. A substantial portion of our copper exports [usually] go to China. Foreign investors have reduced appetite for Zambian Government Bonds right now, which has affected our dollar liquidity. The market is very nervous at the moment, and there are fears that an economy like Zambia’s that is so significantly dependent on China is not the best investment destination. Secondly, outside our Eurobonds, almost 30% of our sovereign debt is derived from China. Thirdly, China is a major upcoming investor in mining and a number of other sectors in Zambia.
Fourthly, China is the leader in Zambia’s infrastructural development drive, accounting for around 90% of the large infrastructure investments in Zambia, including road construction. But what’s even more important is the fact that both the money being used to construct these roads as well as the construction companies themselves come from China.
Anything that affects China negatively — like the stress of the coronavirus on the Chinese economy — means that not only is road construction going to be affected, but the loan portfolio that actually finances what’s happening will shrink. In other words, the amount of money we can borrow from China will decline. It’s about the interconnectedness and dependence of Zambia on China, and the fact that China has been hit hard economically by the virus.
The free-fall of the Kwacha can also be explained by factors such as the depleting of Zambia’s Foreign Exchange reserves, and the declining production of copper in Zambia.
The copper price rallied above US$ 6 000 in December 2019, and has now dropped off a cliff, showing a 30% decline since January. Yet, in a new report, Fitch analysts have revised up their 2020 copper price forecast to $5,900/tonne from $5,700/tonne as they now expect increased fiscal stimulus from the Chinese government to lift prices higher over the back half of the year.
What are your thoughts on this projection?
My view is that it’s possible copper prices will rebound, depending on which countries are hit by the virus, and when. I emphasise “when” in the sense that there are so many unknowns in terms of risk factors. Since cases of COVID-19 were identified in Zambia on 18 March, we are already fearful, but not to the extent that there is havoc. But the faster it spreads in Zambia, the more serious the economic implications will become.
The panic mode that people (and the government) may go into — stopping movement between cities, for example — would have a serious impact on businesses that are dependent on human movement. The services sector — that’s banking, hotels, retail businesses, public transport services, air travel — accounts for quite a substantial portion of the government’s tax collection. We are already in a fiscally stressed economy, and it will become worse if the coronavirus pandemic is not arrested early.
In terms of how this may begin to affect the appetite for copper, there are so many unknowns at the moment. As far as mining is concerned, it’s the underlying policy factors that are driving investment away from Zambia’s mining industry, particularly the current fiscal regime for the sector. The impact of coronavirus – that is presently creating oversupply and falling prices – will unfortunately make a bad situation even worse.
“We are already in a fiscally stressed economy, and it will become worse if the coronavirus pandemic is not arrested early.”
So, whether a rebounding copper price will be greeted by increased production by the mining houses in Zambia is a separate question. The answer to that is not clear — it’s more likely not. In 2019, we’ve seen many problems with the fiscal regime. Added to that, because of the Government taking control of Konkola Copper Mines (KCM), that mine’s production dropped by almost 50%. Government complained that no reinvestments had been made by Vedanta, KCM’s majority owner. KCM said that Government had not been paying VAT refunds. The blame game continues in nobody’s interest.
There are many policy challenges within the country that must be addressed. Mines are very concerned about the fiscal regime; they are currently at loggerheads with the government. The year 2019 was so bad that, as a miner, one would need a special sense of humour to reinvest in the industry.
The coronavirus will have several implications for global trade. What do you see as the main implications?
The coronavirus is ‘risk factor number one’ for the entire global economy at the moment, not only for Zambia. We can’t predict how the market will behave. The stability of the global markets as a result of the virus will be determined by the extent to which the production profile [of goods and commodities] matches the demand profile. The virus will advance from one country to another, and the coping mechanisms will vary too.
“The coronavirus is ‘risk factor number one’ for the entire global economy at the moment, not only for Zambia.”
As a result of the virus, there will be a further reduction in copper production. If people in Zambia are sick — or they are scared of getting sick — they won’t go underground. That will mean that we can’t meet our production targets. If we fail to meet our targets, but demand for copper in destinations like China where we send it are high, that means there will be increased competition for copper, which creates a price escalation. We may discover that, depending on how the global market responds to the virus, things could change pretty fast, which could be inflationary.
Some economies have already cushioned the blow, like the United States (US). During the 2008 crisis, the US state had to step in and give big business big money — which, of course, they repaid later. There are not many governments with deep pockets. The Americans have the capacity to cope, but what about poor Zambia?
***
Governments around the world are introducing financial rescue packages and tax incentives to ensure the survival of business. As copper prices continue to sink, mines from Chile to Canada are halting operations, and we are likely to see the same in Zambia before long.
The survival of Zambia’s economy depends directly on the survival of its mining industry. We are in the midst of a pandemic; agendas must go out of the window, as we all pull together. In our next article, we will look at the various economic decisions that are being taken by Governments elsewhere in the world, and consider the options for Zambia. Until then, stay safe!
ZAMBIA’S mining giant plans to invest into the small-scale gold mining sector by formalising trade for the miners and have already begun purchases.
Earlier this week, Zambia Consolidated Copper Mines Investments Holdings (ZCCM-IH) announced that its subsidiary, the Consolidated Gold Company of Zambia had opened a gold testing and processing laboratory that would facilitate the assessment of locally mined gold.
“ZCCM-IH has embarked on an ambitious investment programme to harness the gold potential in the country as mandated by Government, and that so far the company has started buying gold from artisanal and small-scale gold miners as one of the steps towards the formalisation of gold mining and trading activities,” ZCCM-IH Chief Executive Officer Mabvuto Chipata told media.
“We are offering a competitive price, starting from K550 per gramme, and depending on the purity, using thorough technical assaying methods, the price may be higher as compared to prices found on the ground.”
Mr. Chipata further encouraged anyone with gold to come forward and sell to ZCCM-IH as the company will guide such individuals on how they can regularise their activities so that they are compliant with the relevant regulations.
And Karma Mining Services and Rural Development Chief Executive Officer Faisal Keer said the gold lab was critical in the gold trade process to determine the gold content accurately in the ore that will be received from the various miners.
Speaking at a media press briefing, the Consolidated Gold Company Chief Executive Officer said the company has invested US$3.5 million in setting up a laboratory, procurement of gold milling plants and earth moving equipment.
“The lab is critical in the process as it is meant to determine the gold content accurately in the ore that will be received from various miners, for them to get a fair share and value for their material. It will be able to process about 30 samples per day,” he said.
“The gold milling plants have a capacity of processing 30 tonnes per day, and will be operational by the first week of April 2020. Our target from the gold milling plants is to produce 300 grams of gold per day, which translates into approximately 7.5 kgs per month,” he said.
Mr Keer said the company is helping small scale miners including those dealing in lode gold or quartz gold to develop their mines and increase the mineral ore production by providing mining technical expertise and access to earth moving machinery
He called upon members of the public to utilise the facility and take their samples for testing for them to get a fair share and value for their gold.
Consolidated Gold Company of Zambia Limited is a Joint Venture partnership between ZCCM-IH (45%) and Karma Mining Services and Rural Development (55%) with a purpose of developing a gold processing and trading operation in Zambia.
ZCCM-IH chief executive officer Mabvuto Chipata says talks with various companies outside Zambia are at an advanced stage to secure a viable market for the off-take of gold that will be due to be sold.
And Chipata has announced that ZCCM-IH will be offering a competitive price for gold from the local market, pegged at a starting price of K550 per gramme.
Meanwhile, Consolidated Gold Company Limited have invited all interested stakeholders to utilize a new, state-of-the art gold testing laboratory to ascertain the quantity and quality of gold mineral they may have as personal holdings to secure a market and the best possible sale price.
Addressing journalists following a media tour at the Consolidated Gold Company laboratory in Lusaka, Wednesday, Chipata said talks with various companies outside Zambia were at an advanced stage.
He was responding to a question on what progress ZCCM-IH had made in securing a viable market for the off-take of Zambian gold once the company was ready and in a position to commence sales.
He was responding to a question on what progress ZCCM-IH had made in securing a viable market for the off-take of Zambian gold once the company was ready and in a position to commence sales.
“We are also working with banks in this (gold) project. The whole value chain requires that you start from where you are buying; you need to look at the logistics; you need to look at the security; you need to look at the storage of the gold; the buyer and financing structure…so, this is a big project that we think that all the stakeholders, really, have got a part to play in this process.”
Asked how confident ZCCM-IH was at achieving their projected target of securing 40,000Kgs of gold, or 40 tonnes, in view of the security threats that halted the scoping exercise, Chipata expressed optimism given the progress made so far.
Teams comprising of ZCCM-IH, Ministry of Mines and Minerals Development and the Ministry of Home Affairs personnel were deployed to eight gold mining and panning sites across the country to undertake a scoping exercise, according to Chipata.
The exercise was, however, temporarily halted due to the fragile security situation over the last few weeks following the recent spate of gassing attacks in various areas of the country.
“How confident are we at achieving the target? You will appreciate that this is a project that we are doing for the first time. We know that Kansanshi Mine produces about 4,000-5,000Kgs of gold as we stand. The work we are doing now in terms of exploration will help us ascertain the quantities of gold that are on the ground, particularly, in Mwinilunga area (North-Western Province). In Rufunsa (District) as well, once we start exploration work, we will be able to ascertain the quantities that are there,” he replied.
“The information we have now is based on the information we have informally. So, we think that once we have done exploration work, we will be able to announce how much quantities we will discover in each of the areas as we go on during the year.”
And he announced that ZCCM-IH would be offering a competitive price for gold from the local market, pegged at a starting price of K550 per gramme.
“I must say that so far, our moving into the market to buy the gold, has been received favourably by the artisanal miners. We are offering a competitive price, starting from K550 per gramme, and depending on the purity using thorough technical assaying methods, the price may be higher. Compared to prices found on the ground ranging from K350 to K500, the price range we are offering compares favourably to this, but also to market prices as well, once the purity or gold content is determined,” Chipata announced.
Meanwhile, speaking earlier, Consolidated Gold Company Limited chief executive officer Faisal Keer invited all interested parties to utilize the new, state-of-the-art gold testing laboratory to ascertain the quantity and quality of gold mineral they may have as personal holdings to secure a market and best possible sale price.
“This laboratory is targeted at the operations we are setting up starting with Rufunsa where we are working with small-scale and artisanal miners there from the surrounding area. We have so far invested about US $250,000 in setting up this lab that will be able to process about 30 samples per day. The lab will also be open to the general public for them to come and have their samples tested from here,” said Keer.
“The next step in the project, as you saw, we have procured 10 milling plants to be set-up on the Rufunsa site and also some earth-moving machinery. The gold milling plants have a capacity of processing 30 tonnes per day and will be operational by the first week of April, 2020.”
The media tour was organized as part of efforts to sensitize all stakeholders of progress ZCCM-IH had made in the ongoing gold value chain project.
The company has started buying gold from artisanal and small-scale gold miners as one of the steps towards the formalization of gold mining and trading activities.
ZCCM-IH’s national target for gold from both primary and secondary sources is 40 tonnes or 40,000Kgs.
The Ministry of Mines and Minerals Development (MMMD) of Zambia has hinted of plans to set up a Minerals Commission similar to that of Ghana to regulate its mineral resources especially its recently found gold reserve.
Mr Barnaby B. Mulenga, the Permanent Secretary at the MMMD said the regulatory and policy functions were lumped together at his ministry and were keen on making sure those functions were decoupled as had been done by Ghana to ensure efficiency and productivity.
He gave the hint when he led a four-member delegation from the MMMD to visit the management of the Minerals Commissions of Ghana to learn about the Commission’s operations and how it was able to handle the challenges in artisanal small-scale mining.
The meeting, facilitated by Friends of the Nation in collaboration with Oxfam was part of a three-day visit to by technical officials of the MMMD to Ghana as a follow-up to a similar visit made by Government, Civil Society and Miners representatives from Zambia to Ghana in 2018 and 2019 respectively.
The team is scheduled to meet institutions such as the Ministry of Lands and Natural Resources, Minerals Commission, Precious Mineral and Marketing Company, Ghana Geological Survey Authority among others.
Mr Mulenga said the solid legal regime such as resettlement of disputes, local content and participation instituted by Ghana might be adopted and domesticated to ensure the country derived the needed benefit for development.
“We have heard a lot of positive stories about Ghana involvement in the mining sector, especially in Gold production. We recently have the discovery of gold in Zambia and therefore we felt that let us go to those doing it for a long time.
“We have challenges to do with a small scale under the artisan sector and we felt we could learn lessons from Ghana in terms of how she has been able to handle this particular sector. It is amazing how Ghana has found novelty ways of addressing such problems”.
Mr Addae Antwi-Boasiako, Chief Executive Officer, who briefed the delegation on their operations said among the Commission’s mandate was to formulate recommendations of national policy for exploration and exploitation of mineral resources with special reference to establishing national priorities having due regard to the national economy.
He said it provided an advisory to the Minister of Lands and Natural Resources on matters relating to minerals and monitoring the implementation of laid down policies on minerals and report to the Minister.
Mr Antwi-Boasiako said the Commission as part of its mandate monitored the operations of all bodies or establishments with responsibility
The Ministry of Mines and Minerals Development (MMMD) of Zambia has hinted of plans to set up a Minerals Commission similar to that of Ghana to regulate its mineral resources especially its recently found gold reserve.
Mr Barnaby B. Mulenga, the Permanent Secretary at the MMMD said the regulatory and policy functions were lumped together at his ministry and were keen on making sure those functions were decoupled as had been done by Ghana to ensure efficiency and productivity.
He gave the hint when he led a four-member delegation from the MMMD to visit the management of the Minerals Commissions of Ghana to learn about the Commission’s operations and how it was able to handle the challenges in artisanal small-scale mining.
The meeting, facilitated by Friends of the Nation in collaboration with Oxfam was part of a three-day visit to by technical officials of the MMMD to Ghana as a follow-up to a similar visit made by Government, Civil Society and Miners representatives from Zambia to Ghana in 2018 and 2019 respectively.
The team is scheduled to meet institutions such as the Ministry of Lands and Natural Resources, Minerals Commission, Precious Mineral and Marketing Company, Ghana Geological Survey Authority among others.
Mr Mulenga said the solid legal regime such as resettlement of disputes, local content and participation instituted by Ghana might be adopted and domesticated to ensure the country derived the needed benefit for development.
“We have heard a lot of positive stories about Ghana involvement in the mining sector, especially in Gold production. We recently have the discovery of gold in Zambia and therefore we felt that let us go to those doing it for a long time.
“We have challenges to do with a small scale under the artisan sector and we felt we could learn lessons from Ghana in terms of how she has been able to handle this particular sector. It is amazing how Ghana has found novelty ways of addressing such problems”.
Mr Addae Antwi-Boasiako, Chief Executive Officer, who briefed the delegation on their operations said among the Commission’s mandate was to formulate recommendations of national policy for exploration and exploitation of mineral resources with special reference to establishing national priorities having due regard to the national economy.
He said it provided an advisory to the Minister of Lands and Natural Resources on matters relating to minerals and monitoring the implementation of laid down policies on minerals and report to the Minister.
Mr Antwi-Boasiako said the Commission as part of its mandate monitored the operations of all bodies or establishments with responsibility for minerals and report to the Minister and also received and assessed public agreements relating to minerals and report to Parliament;
Mr Collins Anim Sackey, Acting Director of Policy and Planning and Tittles at the Commission stated that unlike the previous practice, where small scale mining was done haphazardly, the government together with other stakeholders had initiated and started the Community Mining Scheme (CMS) to end the illegal small scale mining.
He said the scheme was inclusive, well regulated with a dedicated central processing site adequately equipped and would stop the old practice of mining in water bodies.
Mr Sackey said a technology called the GalamStop software was developed to monitor activities of miners and the life cycle of mining and related licenses, while tracking systems were embossed on heavy equipment to track its activities.
Talking about the local content in the sector, he said there was a new law in the offing that sought to strengthen the local participation in the mining industry.
He noted that the existing legislation specified local content in areas of human resources and the supply of goods and services, but the new regulation would insist on levels of local equity participation in any mining activities.
Mr Richard Hato-Kuevor, the Economic Justice Lead and Extractive Industries Policy Advisor, at Oxfarm explained that the visits were aimed at strengthening the relations between Ghana and Zambia in collaborating on initiatives to improve the mining industry to
“We are also facilitating this to create a platform for African countries with some commonalities share ideas, unite, grow their economy and create jobs for the youth. This is one of surest ways to spur development on the continent,” he added.
ZAMBIA’S formalisation of the gold industry is gaining momentum with ZCCM-Investment Holdings (IH) starting buying gold from artisanal miners.
Last week, the holding company started buying gold from miners although the volumes bought so far are yet to be quantified.https://epaper.daily-mail.co.zm/
ZCCM-IH recently held a press briefing and media tour of the gold testing and processing laboratory.
The briefing was addressed by ZCCM-IH Chief Executive Officer, Mr. Mabvuto Chipata and Karma Mining Services and Rural Development/Consolidated Gold Company Chief Executive Officer, Mr. Faisal Keer.
Speaking at the event, Mr. Chipata informed the media that ZCCM-IH has embarked on an ambitious investment programme to harness the gold potential in the country as mandated by Government, and that so far the company has started buying gold from artisanal and small-scale gold miners as one of the steps towards the formalisation of gold mining and trading activities.
He announced that ZCCM-IH is offering a competitive price, starting from K550 per gram, and depending on the purity using thorough technical assaying methods, the price may be higher as compared to prices found on the ground.
Mr. Chipata further encouraged anyone with gold to come forward and sell to ZCCM-IH as the company will guide such individuals on how they can regularise their activities so that they are compliant with the relevant regulations.
And speaking earlier Mr. Faisal Keer noted that the lab was critical in the process as it is meant to determine the gold content accurately in the ore that will be received from the various miners, for them to get a fair share and value for their material.
He called upon members of the public to utilise the facility and take their samples for testing.
Consolidated Gold Company of Zambia Limited is a Joint Venture partnership between ZCCM-IH (45%) and Karma Mining Services and Rural Development (55%) with a purpose of developing a gold processing and trading operation in Zambia.
ZCCM IH in collaboration with Karma Mining Services and Rural Development Limited in Consolidated Gold Company Limited has established a gold testing laboratory following the group’s announcements that it intended to diversify into other commodities through strategic partnerships.
ZCCM-IH CEO, Mr Mabvuto Chipata (left) and Karma Mining Services CEO, Mr. Faisal Keer (right)
Earlier in the year, in the week that saw ZCCM IH Group CEO Mabvuto Chipata declare a profit for the year of K448 million and a K53 million dividend for the financial year ending March 2019 at their Annual General Meeting, the CEO announced the Group’s gold intentions.
“ZCCM-IH has started buying gold from artisanal and small scale gold miners from various places. This is part of the steps towards the formalisation of the artisanal gold miners”, according to a press invitation issued by Loisa M Kakoma, ZCCM IH Head of Public Relations on 10 March 2020.
The opening of the lab is only the beginning of what Financial Insight believes is ZCCM IH’s carefully crafted roadmap of becoming a forceful gold player in the value chain. A value chain links the steps a product takes from the primary producer to the consumer. It includes research and development, input suppliers and finance. For example, the gold value chain spans the production steps from the ore in the ground to the retailing of the fine gold jewelry. This is the reason why opening up a gold laboratory is so important to ZCCM IH’s ambitions.
By starting with small scale miners, the Group is essentially re-writing the way mining ought to be conducted in Zambia by putting in place structures and captures of the essence of value creation at each stage in a formalized manner. This is the sensitivity of traceability that is demanded by the industry as it was elaborately echoed at the February 2020 mining indaba by Mark Bristow, President of Barrick Mining. Traceability, which is a facet of supply chain management, is one type of Cost of Chain model whereby the material in the chain can be traced back to its actual sources. Depending on the solution deployed, it enables mining organizations to make informed, actionable decisions, better engage with their employees and communities and more efficiently manage resources.
With the opening up of the lab and the signing of strategic joint ventures, the Group will also be embarking on “other efforts include providing technical expertise, access to earthmoving machinery and production equipment to small scale gold miners”.
In achieving the latter, ZCCM-IH with its partner Karma Mining Services and Rural Development Limited in Consolidated Gold Company Limited have set-up a laboratory aimed at establishing gold content in ore to be purchased from artisanal and small-scale gold miners.
During the laboratory media tour and press briefing on the gold project in Rufunsa, Mr Faisal Keer, CEO of Consolidated Gold Company Limited said that the laboratory is critical as it is meant to determine gold content accurately in the ore that will be received from various miners, for them to get a fair share and value for their material. The main objective of this is to curb the smuggling of gold out of the country, provide an open market and competitive prices for the artisanal and small-scale gold miners and ultimately take stock of the gold output from artisanal and small-scale miners.
ZCCM-IH and Karma Mining Services and Rural Development have entered a joint venture partnership through the incorporation of consolidated gold company of Zambia Limited, which both have a shareholding of 45% and 55% respectively. The purpose of this joint venture is to develop a gold processing and trading operation in Zambia and they are working closely with the Ministry of mines to make this a success.
Embarking on an ambitious investment program to harness the gold potential in the country as mandated by the government, the following has been done. Firstly, they have started preliminary activities in the Kasenseli area in Mwinilunga and from the samples that have been collected so far, the results have been positive. To add on, the collabo has started buying gold from artisanal and small-scale gold miners as one of the steps towards the formalization of gold mining and trading activities.
During his speech, Mabvuto Chipata, ZCCM-IH CEO, mentions that so far, moving into the market to buy gold has been received favorably by the artisanal miners and encouraged anyone with gold to come forward and sell to them. This also includes household miners, as this will help and guide such individuals on how they can properly extract gold from their various items in a safe and profitable manner as well as regularize their activities so that they are compliant with the relevant regulations.
The Karma Mining Services and Rural Development – KMSRD joint venture – JV with ZCCM Investment Holdings to form a gold company “Consolidated Gold Company of Zambia – CGCZ Ltd” for the purpose of developing a gold processing operation in Zambia will take off by end of March 2020.
The company in which ZCCM-IH have a shareholding of 45% and 55% for KMSRD respectively has invested about US$ 3.5 million into a laboratory which has been set to determine the gold content accurately in the ore that will be received from various miners for them to get a fair share and value for their material.
Addressing the media in Lusaka on March 11, 2020, attended by the Zambian Business Times – ZBT, KMSRD Chief Executive Officer – CEO for the gold mining company – CGCZ Faisal Keer disclosed that about $250,000 has been invested in setting up a lab that will be able to process about 30 samples per day.
This partnership comes after ZCCM-IH announced its initiative to start buying gold from artisanal and small scale miners across the country as one of the steps towards formalization of gold mining and trading activities in Zambia.
Faisal said the lab will also enable the general public have their samples tested adding that the gold company has also procured ten gold mining mini- processing plants to be set-up in Rufunsa and other gold mining areas. The company has also procured some earth moving equipment.
He added that the gold mining processing plants have a capacity of processing 30 tonnes if gold per day and will be operational by first week of April, stating that out of the target from the gold mining plant is to produce 300 grams of gold per day, that translates into approximately 7.5 kgs per month.
“Once we have received the mineral processing license which is in the process and most likely to be out by end of this month, we will then proceed to setting up the Gold leaching plant in Rufunsa aimed at chemically processing the gold stock piles with a capacity of processing about 8,000 tonnes” he said.
At the same event, ZCCM-IH Chief Executive Officer Mabvuto Chipata said the company’s partnership with Karma Mining Services and Rural Development will go a long way as it has over 20 years of experience in gold processing and has developed several gold processing, production and trading operations.
He added that this investment is in line with ZCCM-IH’s strategic objective in mining chain value creation which is to diversify the company’s investments away from copper linked investments to other minerals such as gold and other precious metals.
ZCCM-IH and Karma Mining Services and Rural Development have entered have joint venture partnership through the incorporation of Consolidated Gold Company (CGC) of Zambia with 45% and 55% shareholding.
The company has invested $3.5 million in setting up a lab, procurement of gold milling plants and earth moving equipment. The gold milling plants have a capacity of processing 30 tonnes per day, and will be operational by the first week of April 2020.the target from the gold milling plants is to produce 300 grams of gold per day, that translates into approximately 7.5 kgs per month.,
During the laboratory media tour ZCCM-IH (CEO) Chief Executive Officer Mabvuto Chipata stated that this joint venture is to develop a gold processing and trading operation in Zambia.
“The operation of the project accords ZCCM-IH an opportunity to participate in the value chain of the gold sector through gold processing,” Chipata said.
He further said that the investment is in line with one of ZCCM-IH‘s strategic objectives in mining value creation which is to diversify the company’s investments away from copper linked investment to other minerals such as gold and other precious metals.
The total project investment is about $3.5 million.
Meanwhile CGC (CEO) Chief Executive Officer Faisal Keer said that this laboratory is targeted at the operations working with small scale gold miners.
“This lab is critical which is meant to determine the gold content accurately in the ore that received from the miners to get a faire share and value for their minerals,” keer said.
Keer also said that the company is helping licenced small scale gold miners in the area,
“And also providing access to earth machinery in order to increase gold ore production and aiming to transfer technical skills to the miners who are dealing in lode gold or quartz vein gold mining,” he added.
So far the company has invested about $250,000 in setting up the facility.
And eight gold mining and panning sites across the country to undertake a scoping exercise. Based on the scoping exercise ZCCM-IH has started purchasing gold in Rufunsa, Vubwi, Mumbwa and Luano.
The national target for gold from both primary and secondary sources is 40 tonnes and secondary sources on artisanal and small scale gold miners which is about 43% from the national target.
