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Chinese firm gets lucrative US$200m Zimbabwe exploration deal

by Staff reporter
25 Jun 2023 at 18:22hrs | Views
GOVERNMENT has awarded a US$200 million contract to China Harbour Engineering Company (CHEC) to modernise Zimbabwe's geological survey and metallurgical laboratory infrastructure facilities, the Zimbabwe Independent can reveal.

Zimbabwe's mining sector suffers from a lack of data due to an outdated geological database and absence of a comprehensive national exploration programme, and the decision by cabinet to award the lucrative deal, dubbed the National Exploration Infrastructure Project, to the Chinese state-owned engineering giant is seen as a solution to the problem.

There are fears that the country risks losing vital geological information as a result of time-worn infrastructure at the Zimbabwe Geological Survey and the state of the Metallurgical Laboratories, both of which fall under the Ministry of Mines and Mining Development.

A cabinet source told the Independent that the deal recently got an executive nod and was good to go.

"The deal went through cabinet and was approved," the source said.

Mines and Mining Development minister Winston Chitando did not respond to questions sent to him.

CHEC is China's largest overseas infrastructure construction company.

Zimbabwe's mining sector, with close to 60 different minerals, has suffered from under-investment in exploration, making it difficult to determine the extent of its mineral resource endowment over the past four decades.

To date, crucial and sensitive data regarding the country's mineral resources remains in the hands of Western governments.

A Canadian firm was contracted by the government in 1985, through the Canada International Development Agency (Cida), to conduct aeromagnetic surveys. However, government top sources say the company left without handing over the results.

Some of Zimbabwe's critical digital data is stored at the Geophysical Data Centre (GDC) in the united States and local officials have to apply for permission to access the data.

As a result, investors have been sceptical to sink money into a sector with limited exploration data.

"There are also fears among market watchers that the country could lose on potential revenue or parcel mining title to investors with no financial muscle to undertake particular mining projects without scientifically backed data to show the exact potential of the deposits," a source said.

"There are instances where companies posing as foreign investors have taken bulk samples of minerals to their home countries for analysis citing lack of adequate testing facilities locally and never returned with the findings."

The massive exploration project comes after the launch of the Responsible Mining Audit Initiative and a recent policy announcement by President emmerson Mnangagwa that compels mining companies to pay half of their royalties for strategic minerals in physical mineral stock.

Zimbabwean tax experts also recently lobbied the government to update the country's geological database and establish a public exploration firm.

A source in the Ministry of Finance and economic Development said: "This is a done deal and everyone is convinced this is the right decision. The Chinese company has shown real commitment and capacity in terms of both engineering and financing to implement this massive infrastructure project.

"Geologists and mining engineers from the mining ministry are already working flat out on the implementation plan for this large-scale project, which is expected to provide an in-depth understanding of the location and quantities of mineral deposits."

Under the national exploration Infrastructure project, geophysical surveys will be conducted throughout the country using special planes fitted out with aeromagnetic, radiographic, electronic and ground penetrating radar equipment that can gather subsurface information about mineral resource deposits to construct a comprehensive geological database.

An airborne survey is a common type of mineral survey carried out using low-flying aircraft. The aircraft flies a grid-like pattern with height and line spacing determining the quality of the data and cost of the survey per unit area.

To efficiently carry out the surveys, CHeC will work closely with local firms, after which geologists from the Zimbabwe Geological Survey will collect rock and soil samples from potential deposit sites for analysis in Zimbabwe.

The project will train Zimbabweans, who are expected to work in laboratories and on data collection and management.

Exploration has always been an unintelligible but hotly contested turf in Zimbabwe.

The infrastructure deal followed hard lobbying by CHeC officials before the 2021 Forum on China-Africa Co-operation Summit.

At the summit, China pledged uS$40 billion in fresh funding to Africa for strategic projects aimed at fostering economic growth and the scramble is on among African leaders for a piece of that pie.

A trip to Harare in July last year by China's top diplomat, Yang Jiechi underscored the importance of Beijing's relationship with Zimbabwe.

The Beijing-headquartered CHeC is a subsidiary of the Chinese state-run conglomerate, China Communications Construction Company (CCCC), in which the Chinese government has a controlling stake and explores the foreign overseas market on behalf of the CCCC.

CCCC is the world's largest infrastructure development company and the single-largest beneficiary of China's global Belt and Road Initiative (BRI) in terms of project value.

CHeC, which has previously been China's face at the heart of the country's highway construction, was last year in the eye of a storm during a battle for the replacement of Zimbabwe's aviationradarsystem.

The Chinese firm was selected as the sole bidder and received a multi-million-dollar contract to replace airspace communication system meant to stop mineral smuggling through the airspace. The tender was only open to Chinese and Russian firms.

The Joint operations Command (Joc) and the office of the President and Cabinet directed that the deal be awarded to a company drawn from countries that the government considers friendly.

CHeC had to deal with reports that it was covered under sanctions imposed by the united States government and the World Bank on its parent firm. The firm made it clear in earlier public statements that it was not covered by sanctions imposed by the World Bank in 2011, which ran until July 2017.

The country's exploration turf has always been contested.

The government in 2013 cancelled a uS$33 million tender for an aeromagnetic survey in the Manicaland province at the last minute after state procurement officials unearthed evidence of tender rigging and midnight tampering of tender documents by prospective bidders.

The eastern Highlands, which borders Zimbabwe and Mozambique, could not be explored in the 1970s and 80s due to the civil war, which ravaged neighbouring Mozambique during that time. under this latest project, the government seeks to curb incidences of mineral rushes as experienced during the discovery of diamonds in Marange.

According to reports, an ultra-high resolution aero-survey was done in 2019, which combed through large swathes of unexplored land surrounding Great Zimbabwe ruins and the Greater Mwenezi area in Masvingo, revealing vast deposits of minerals and targets, which do not appear in Zimbabwe's outdated geological maps.

Another exercise was carried out in Matebeleland South province, which also showed vast resources.

Source - the independent