
ZIMBABWE’S mining sector has huge potential for rapid growth given its scope for bulk mining with major mining houses in the country planning to spend big on exploration projects this year with an aggregate budget of about US$50 million.
The increase in investment is attributed to several factors, including the Government’s supportive policies, the discovery of new mineral deposits, and the strong global demand for minerals.
One company that has set aside a huge purse for exploration works is Kavango Resources, a London Stock Exchange-listed mineral exploration company, whose chief executive Mr Ben Turney has described Zimbabwe’s mining sector as having “untested potential for bulk mining”.
He noted that most projects are not pure exploitation but are producing assets on a fairly small scale.
The country is endowed with abundant mineral resources ranging from gold, platinum, and diamond to lithium, among others.
Zimbabwe’s mining sector has witnessed a surge in investment over the past two years, with several companies investing heavily in exploration, expansion, and plant construction.
The country has over 60 recorded minerals, but only 10 are being actively mined. The rest will be mined once there is sufficient exploration and resource definition.
There have been calls in the sector to incentivise exploration activities that will unlock the discovery of more minerals as the mining sector is a vital cog to sustainable socio-economic development in Zimbabwe
Exploration data is considered critical for attracting investors and determining the amount of resources to be committed towards exploiting a mineral. The absence of extensive exploration work over the years has resulted in the country failing to determine the extent of its entire mineral wealth.
Kavango Resources is an exploration company targeting world-class base and precious metal discoveries in Zimbabwe and Botswana. The entity, which has footprints in Matabeleland, is pursuing projects that include the Hillside and Nara.
According to its website, the Hillside Project contains a historic high-grade underground mine that produced a reported 18 000 ounces of gold from ore at a grade of 7,7 grammes per tonne over a strike length of more than 350m.
Kavango has identified multiple zones with the potential for scheelite and gold production parallel to the trend responsible for historical production.
Within these zones, the company has designated three prospects as a priority due to their near-surface, bulk mining potential.
Kavango said Hillside has the potential to host a bulk mineable gold deposit. The company has entered an exclusive option to acquire the asset.
On the other hand, Nara covers four historic underground mines with a total recorded production of 92 000 oz of gold. The average grade of ore mined was 9,76g/t, and in addition to that the historic mines also produced credits of tungsten and silver.
The project has also supported continuous surface small-scale mining and custom milling over the last 30 years. This has generated an estimated 150 000 to 250 000 tonnes of tailings, which presents an opportunity for potential near-term revenue generation.
Speaking during a recent StockBox chat, a media platform for listed companies to connect with investors monitored by our Bulawayo Bureau, Mr Turney said: “Everything I have seen on the ground confirms that we are right about this. We are turning out as a well-financed company and we moved to drilling quickly.”
He said they completed their first phase of drilling before Christmas in the Hillside project.
“We have assay tests and we are taking samples across the border to Johannesburg. We completed all the drilling at the Nara project and will test that locally in Zimbabwe,” said Mr Turney.
He said he is encouraged by the progress of the projects.
“We love what we have seen so far and we are encouraged by that. One of the great things about these projects is that they are not pure exploitation, but these are existing producing assets on a fairly small scale,” said Mr Turney.
“But the great thing about Zimbabwe is the enormous untested potential for bulk mining. If the core samples we have seen so far live up to expectations, it’s going to be an exciting period for Kavango.”
According to the latest State of Mining Industry Survey report released by the Chamber of Mines in November last year, major mining houses in the country are planning to spend big on exploration projects this year with an aggregate budget of approximately US$50 million. There are indications that the sector requires US$2 billion in the next 12 months to ramp up and sustain operations.
The planned exploration projects come at a time when mineral revenues are set to decline by about 20 percent this year and a further 10 percent next year due to global softening commodity prices.
“Exploration analysis of survey responses show that about 90 percent of mining houses are undertaking exploration activities around their mines. The aggregate exploration budget for 2024 is approximately US$50 million,” reads the report.
In the past 24 months, Freda Rebecca has spent around US$29 million on exploration, mine development, and tailings storage projects to sustain their operations.
On the other hand, Shamva Gold Mine has set aside more than US$7 million in exploration activities around their mine to ensure the availability of mineable resources to achieve 200 000 tons of ore per month while Pan African Mining is injecting US$13 million on exploration and shaft deepening to sustain their operations.
The report further says Bulawayo Mining Company is spending more than US$7 million on exploration, shaft sinking and deepening as well as tonnage ramp-up to sustain their operations. Falcon Gold is planning to spend more than US$400 000 on exploration and development at their mine to sustain and ramp up production.
In the past five years, several closed but potentially productive mines have been resuscitated with some changing mining scope of production.
For instance, Kamativi Mine in Hwange District, Matabeleland North Province which has not been operating for almost 30 years, is back in production but mining lithium.
Kamativi Tin Mine was closed in 1994 when the international price of tin plummeted to unsustainable levels. At that time the tin mine employed about 3 000 workers and still had a life span of over 40 years.
In recent years, the Government discovered lithium deposits at the disused tin mine and a Chinese investor was engaged to re-open the mine.
In Mberengwa District in Midlands Province, mining group Kuvimba Mining House (KMH) is transforming Sandawana Mines into a world-class high-grade lithium operation that will have an annual turnover of US$4,5 billion once a beneficiation plant is installed.
The mine, which has a history dating back to 1955 when emeralds were first mined at the operation, is being resuscitated as a lithium and tantalite mine by KMH following a cumulative capital injection of US$56 million.
Sandawana, which exchanged hands over its long history, has been an important producer of emeralds for 40 years before production was suspended in 2010 due to working capital challenges and a reduction in emerald resources.
The mining sector is a major contributor to the economy, accounting for 13 percent of the gross domestic product and employing over 50 000. The sector also generates more than 70 percent of the country’s exports.
Under Vision 2030, the industry is expected to anchor the country’s economy towards the envisaged upper-middle-income economy status.
Herald