Zimbabwe has a favourable mining geology, so far largely underexploited. The country‟s political boundaries coincide almost completely with the geological boundaries of the Zimbabwean Craton and are intersected by the Great Dyke. The structural geology includes rift valleys in the north and northwest (Zambezi Rift) and mobile belts in the north (Zambezi Belt), east (Mozambique Belt) and south (Limpopo Belt).
Zimbabwe's mineral resources are mainly found in the following geological formations and bodies:
The Greenstone Belts:
Gold and silver, as well as considerable resources of iron ore, nickel,
copper, cobalt and podiform chromite, also chrysotile asbestos (Mashaba Igneous Complex),
limestone, pyrite and antimony;
The Karoo Basins:
Considerable bituminous coal, coking coal, anthracite and coal-bed
methane (CBM) resources;
The Carbonatite Igneous Complexes:
phosphate (Dorowa, Showa);
diamonds (Morowa, River Ranch);
Lithium minerals, columbite-tantalite, cassiterite, et al;
Recent alluvial and placer deposits:
Gold and diamonds (possibly from reworked Umkondo
The Great Dyke:
PGMs (the second largest deposits of platinum in the world after the
Bushveld Complex in South Africa), copper, nickel and cobalt. Also chromium (chromite
seams), as well as minor asbestos and magnesite;
The Magondi Supergroup:
Copper & silver (Dewera Group);
MINING SECTOR RESOURCE BASE
Zimbabwe’s Estimated Mineral Resources
Annual Mineral Production
The mining sector has been the key driver of the Zimbabwe economy since 2009, with an average annualised growth of more than 30%. It currently accounts for more than 50% of total exports, and its contribution to GDP has grown from an average of 4% in the 1990s to around 13% from 2009-2011
The table below shows annual reported mineral production since 2010. Given allegations concerning transparency in diamond extraction, the output reported here may well be significantly under-reported.
Zimbabwe is well endowed with world-class coal resource which offers vast investment opportunities. According to the Chamber of Mines and the Reserve Bank of Zimbabwe, it is estimated that coal resource in Zimbabwe is around 26-30 billion tons. The coal deposits occur in two basins located on either side of the Zimbabwean Craton.
· The Mid-Zambezi Basin to the north; and
· The Save-Limpopo Basin to the South
The southern coal deposits are poorer in quality; the northern coal deposits are less affected by igneous intrusions and tectonic activities. Zimbabwe‟s coal resource is under-explored. There is scope for further investment especially given that coal mining has been deregulated to allow for more players to participate.
Zimbabwe' coal deposits:
Nearly all coal production is for the local market – power (Hwange), the cement industry, agriculture and in the past, for coke production for Zisco and exports (Zimbabwe used to also export about 100 ktpa of coke, mainly to Zambia and DRC).
By-products from coke production are tar and benzole. A distillation plant was constructed in Kwekwe in the 1990s by Zimchem which takes all tar and benzole from both the Hwange and Zisco coking plants (when operational), for the production of a variety of chemical products. Oil-from-coal projects have been mooted since the 1950's and are once again under investigation, as are possibilities for gasification of Zimbabwe's substantial coal reserves and the tapping of the CBM reserves for production of ammonia for fertilisers, as well as power (CCGT).
Projections of future coal output and capital investment
A World Bank (2012) mineral production scenarios study forecasts a base-case of 9.8Mt by 2018 (6Mt from Sengwa) and an optimistic case 40Mt by 2018 (“investor friendly” case) which could subsequently expand to 82Mt. The investor friendly case assumes that Hwange mine is recapitalised, the Sengwa operation is expanded further and an even bigger coal operation begins in Lubimbi, all of which would require over US$7 billion in investment.
Hwange Colliery Company continues to be the major coal producer in the country.
The coal sector offers potential opportunities for:
- Coke Production for domestic market and exports;
- Power generation;
- Coal to Liquid (CTL) Technologies;
- Coal Bed Methane Gas and Coal Gasification;
- Infrastructure development;
- Procurement Equipment Supplies and Consumables;
- Technical support services;
- Products and services;
- Skills and manpower development;Participation in the construction of the Gwayi/Shangani Dam.
Gold output reached a post-independence peak of 27 tonnes in 1999 before the economic meltdown led to a steady decline to 3.6t in 2008. Gold output which has been on a recovery path since the adoption of the multi-currency system, eased marginally in 2014 to 14.5t from 14.7t recorded in 2012. According to World Gold Analyst report 2013, gold mines are generally working sub-optimally and below capacity and many are not generating enough cash flow to fund the development and exploration they need to prove up new reserves and open up working faces, activities necessary to sustain or increase production as existing resources become depleted. Many players in the sector rely on old and poorly-maintained plant and equipment, which affects productivity.
Projections of future gold output and capital investment
According to a World Bank study (2012), gold production in Zimbabwe could reach 957, 000 ounces by 2018 in the current policy framework but could reach 2 648 000 ounces with more investment stability. The World Bank production scenario would require a capital investment of US$420 million for the lower case scenario and US$2.5 billion for the optimistic scenario.
The gold sector is dominated by numerous small underground mines many of which are privately owned. The bulk of production however, comes from a few medium-sized mines. The major gold producers, and their gold output in 2012, are shown in the table below:
Gold Producers and Output
The gold sector offers potential opportunities for:
- Resuscitation of existing companies;
- Establishment of new mining companies; and
- Advisory services (capital raising)
Platinum Group of Metals
Zimbabwe has the second largest known platinum deposits in the world after South Africa. Based on current production, Zimbabwe is the third largest platinum producer, and the fourth largest producer of palladium. Platinum reserves and mines are found along the Great Dyke which is a layered igneous complex extending north-south of Zimbabwe for about 550km. The Great Dyke resources are estimated at 2.8 billion tonnes grading 5.54 g/ton (grams per ton).
The PGMs industry has emerged as one of the fastest growing in the mining sector. Figure below shows the PGM output from 2009.
Projections of future platinum output and capital investment
A scenario study by the World Bank (2012) forecasts that by 2018, output could increase to 930 000 ounces at a cost of $1.8 billion in investments, in a policy and cost setting similar to an advanced mining country (such as South Africa or Canada). However, the same study pointed out that with the current policy and cost scenario, not much would be expected to change, despite a large investment of US$700 million by Zimplats that is needed to maintain production at its current level.
There are currently three PGM mines operating namely, Zimplats (Implats), Mimosa (Aquarius & Implats) and Unki Platinum (Anglo Platinum). There are about five other platinum projects, at Local beneficiation and further expansion. There are also opportunities to combine resources with incumbent firms to set up a refinery plant.
The diamond sector is particularly politically sensitive, within Zimbabwe and internationally. Investors interested in the sector are advised to contact our Embassy in Harare to discuss the issues. Annual diamonds output eased from 12.0million carats in 2012 to 9.6 million carats in 2013. Due to the predominant Archaean geology present in Zimbabwe, most of the country has good prospects for diamond mining. Zimbabwe's diamonds can be divided into two categories: the traditional kimberlites and the alluvial.
The kimberlites were first mined commercially at the River Ranch mine in Southern Zimbabwe. The mine has however been entangled in disputes; although the mine was not a major producer, it is estimated that there remain good deposits. In 1997 Rio Tinto Group discovered Murowa pipes (~40km from Zvishavane) and mining started in 2004 (reserves are estimated at ~20Mt of ore).
The World Bank (2012) scenario study estimates that with no major investment, kimberlite production is expected to remain at the current level of 565,000 carats to 2018. However, in a more favourable policy conditions, an investment of US$100 million could result in production of 1 million carats per year. Investment in this sector is expected to reduce operating costs from about US$100 per carat to US$60 per carat.
In 2006 alluvial diamonds were discovered in the Chiadzwa area of Marange District (~90km SW of Mutare), which led to a chaotic “diamond rush”. This was followed by controversial state involvement to regularise extraction through the creation of joint ventures with ZMDC; this period was tarminshed by widespread allegations of human rights abuses (more information available on request).
Due to secrecy around Marange mining, production figures could be higher than the official figures. The value of these alluvial diamonds is much less on average than in the kimberlite pipes, averaging about 25% of the value per carat. Operating costs are however very low at about US$4 per carat. The World Bank (2012) scenario study estimates that an investment of US$150 million could increase production to 15.2 million carats per year by 2018.
It should be noted that before being certified by 17 the Kimberley Process Certification (KPC), the Government was reported to have built up large stockpiles of diamonds, with various reports valuing the stock at over US$1 billion, and some as high as US$5 billion.
Key Players in the Sector
- Mbada Diamonds (Pvt) Ltd
- Marange Resources
- River Ranch
There are reports that Government wants to consolidate operations in diamond sector and have fewer players in a bid to improve accountability and transparancy.