Once known as Africa’s “bread basket” – and then as a “basket case” during the Mugabe years – a revitalized Zimbabwe is now looking to continue its economic rebound through the support of its mining industry.
Mines and mining development minister, Winston Chitando, recently said of Zimbabwe’s investment climate: “President Emmerson Mnangagwa set the US$12B mining sector target by the year 2023 and that immediately jolted us into action which brought reforms to lure more players in the sector. We have witnessed a growing number of foreign companies occupying key sub-sectors.”
The government pointed to several recent examples of growing confidence in the Zimbabwe mining sector including New York Stock Exchange-listed Caledonia Mining (NYSE: CMCL) chief executive officer, Mark Leamoth, who revealed in July that they will continue to invest heavily at its Blanket Gold Mine in Gwanda, citing Zimbabwe as their permanent home for future growth prospects, having acquired another mining asset Bilboes to catapult it to a 200,000oz per annum mining house.
Johannesburg Stock Exchange listed Implat’s (JSE: IMP) chief executive officer, Nico Muller, whose primary asset is platinum miner, Zimplats (ASX: ZIM), along the Great Dyke, recently noted that Zimbabwe is their best bet for future growth having last year announced a US$1.8B mine plan.
Other mining sub-sectors have also witnessed hefty investment inflows such as at the Arcadia lithium mine in Goromonzi, which is expected to start producing lithium by the second quarter of next year.
As part of the country’s plans to attract further mining investment, Zimbabwe’s top envoys in various capitals across the globe have pledged to harness the government’s mantra of “friend to all and enemy to none” to exploit investment opportunities for the country’s economy.
New developments
Tharisa (JSE: THA), a PGM) and chrome co-producer dual-listed on the Johannesburg and London stock exchanges, recently highlighted Zimbabwe’s potential at a ceremony for the start of construction at the Karo Platinum site. The ceremony was attended by Mr Chitando.
Tharisa is a 70% shareholder in Karo Mining Holdings which in turn indirectly owns 85% of the Karo Platinum Project, with the government of Zimbabwe holding the remaining 15%, on a free carry basis.
The ceremony was also attended by local chiefs, dignitaries, and Karo construction and development partners.
Significantly, representatives from Total Eren, a leading France-based renewable energy independent power producer, and Chariot Limited (AIM: CHAR), the Africa-focused transitional energy group, were in attendance with Total Eren having signed a memorandum of understanding to partner on and develop, finance, build, and operate a 30MWp solar photovoltaic (PV) project that will provide competitive solar electricity for the Karo Platinum Project.
Mr Chitando reiterated that Zimbabwe is open for business and welcomed Karo as a partner of the government in this new mine development, which will see Karo create some 1,000 permanent jobs and up to 7,000 jobs during the construction phase. Some 100 jobs have already been created prior to the construction commencement with a similar number of contractors on site.
Karo is set to be a significant contributor to both GDP and delivering a sustainable, long-life integrated mining operation through Tharisa’s proven world class development approach for projects such as Karo.
The mining lease area for the Karo Project covers an area of 239km2 and is located within the Great Dyke in the Mashonaland West District of Zimbabwe, approximately 80km southwest of Harare and 35km southeast of Chegutu.
The Great Dyke is a PGM bearing geological feature that runs from a north to south direction. At approximately 550km in length and up to 11km wide, it is second globally to the Bushveld Complex of South Africa in terms of its PGM resource base.
“Days of celebration like today are immensely important in the development of large scale, impact projects like Karo Platinum,” Karo’s managing director, Bernard Pryor, said.
“It shows the commitment from both the government of Zimbabwe, our local stakeholders, and the entire Karo team in ensuring we deliver this project on time and on budget. It has been a mere four years, interrupted by over a year due to COVID-19, since we first set foot on the ground, and I want to thank the entire Karo team and the Honourable Minister Chitando for their commitment to this project.
“It is now up to the Karo team to deliver on the timeline provided, and I look forward to welcoming all again here when we deliver our first ore into the mill in Q3 2024.”
Karo background
Karo Platinum was awarded a special grant in the Great Dyke in the Mashonaland West District for an area of 23,902.9ha in 2018.
A comprehensive exploration programme was undertaken, while at the beginning of the second exploration programme, a comprehensive implementation study was commenced and completed, resulting a favourable outcome, with the study advocating the development of an open pit mining operation with proposed output of some 150,000oz of PGMs annually.
The initial exploration programme comprised some 238 diamond core boreholes totalling 32,483m, which took place from November 2018 to April 2019. This programme was followed by a second phase of drilling comprising 77 diamond core holes totalling 7,642m.
The second phase of drilling was completed in December 2020. The programmes generated over 22,000 samples that were assayed by an independent laboratory. The total number of drill holes completed were 315.
The Karo Special Economic Zone was declared by the Zimbabwe Investment Development Agency in October 2019, the investor and development licenses are valid for 10 years and can be renewed.
Incentives such as favourable corporate tax rate and exemptions from withholding tax have been gazetted for Special Economic Zones.
The implementation studies conducted by Karo shareholder Tharisa plc, developed the following economic case:
- Initial Great Dyke open pit resource: 152Mt containing 9.97Moz at 2.04g/t (6E)
- 3PGE+Au (Pt 45.0%, Pd 42.0% Rh 4.0% and Au 9.0%) base metal rich – 0.10% Cu and 0.12% Ni
- 20-year open pit mine plan at an average grade of 3.0g/t (6E) targeting average production of 150Kozpa of PGMs in concentrate
- Strong financials: CAPEX ~US$250M with peak funding of ~USD310M
- Project post- tax NPV12.9 US$770.4M, IRR of 47.6%, and ROIC of +47.0%
A mining lease was issued on 12 March 2021.
