Global metal price slump won’t bother us: Bravura

Nelson Gahadza

BRAVURA HOLDINGS, which is owned by Nigerian billionaire Mr Benedict Peters, says having three mining projects in Zimbabwe was a calculated strategy to counter fluctuations in global metal prices and cost dynamics.

The ventures — the Bravura platinum project in Selous, the lithium project in Kamativi and the iron ore project in Manhize — are at different stages of implementation.

The lithium market is projected to experience growth in the near term, driven by growing demand for lithium-based products and technologies on a global scale.

Mineral-rich Zimbabwe has some of the world’s largest hard rock lithium reserves, which have attracted different investors, mainly from China.

Through a mining agreement and in partnership with the Government, the group pledged to spend more than US$50 million to explore and develop a platinum mine in the country.

Bravura has since completed exploration work at its platinum project site in Selous, and is now conducting feasibility studies ahead of actual mining and construction of a processing plant.

The lithium project in Kamativi is expected to come online next year, as production of the plant equipment has been completed and is awaiting shipment to Zimbabwe. The equipment was produced in South Africa.

Bravura’s planned processing plant will be able to produce an annual 30 000 tonnes of spodumene concentrate, a lithium-bearing mineral, by reprocessing waste material left behind by a tin mine that closed down three decades ago.

The Government is a key partner in the project; it holds a 40 percent stake.

The Kamativi dump contains around 25 million tonnes of material, with 50 percent suitable for processing through the Dense Media Separation plant. This translates to an annual capacity of 70 000 tonnes per month of spodumene concentrate.

Lithium is set to become Zimbabwe’s third biggest mineral export after gold and platinum group metals (PGMs). The country is already the world’s sixth-largest lithium producer despite several projects that are yet to start production.

Currently, there are more than seven lithium exploration and mining projects in the country, which are at different development stages, with Chinese companies leading the charge.

Similar projects include the Arcadia lithium project near Harare, with an estimated investment of US$477 million; Bikita Minerals’ only global petalite venture, being further developed into a 300 000-tonne per annum spodumene operation; Chengxin Lithium Group’s Sabi Star 3 000t/pa project in Buhera; and Zulu Lithium’s US$34 million spodumene project near Bulawayo.

Processing plants for lithium projects are also being developed across the country, including in Shamva, Kadoma, Chegutu, Goromonzi and Mberengwa.

Over the 12 months to September 2022, Chinese companies and investors had invested approximately US$1,4 billion in Zimbabwe’s lithium industry.

Furthermore, in September 2022, Zimbabwe approved a proposal by a group of Chinese investors to establish a US$2,83 billion battery metals district. Its function is to process battery metals, including lithium.

The 5 000-hectare integrated battery metals district, scheduled to be constructed by 2025, is expected to be the first-of-its-kind “mine-to-energy” industrial park, including two 300-megawatt power stations and a US$450 lithium processing plant.

This makes lithium one of the key prospects for Zimbabwe’s mining industry, which the Government intends to grow into a US$12 billion sector, from US$2,7 billion in 2017.

Zimbabwe earned US$209 million from lithium exports in the first nine months of last year, up from US$1,8 million in 2018 and US$70 million in 2022.

At the Manhize iron ore project, drilling and exploration are at an advanced stage, with analysis of the ore ongoing.

Bravura was awarded a 3 000-hectare concession in Selous, about 50 miles south of Harare, in 2019. The company applied for an extension of the concession, which has since been granted.

During a media briefing last week, group general manager Mr Gbenga Ojo said, while global commodity prices were on the lower side, that would not deter the firm from progressing with its projects, as it has in place strategies to mitigate price volatility.

“We had a strategy to mitigate costs at times when prices were low. Despite the low prices, we have not retrenched, and we are bullish on price recovery, as we continue with our project development,” he said.

He indicated that having the different commodity projects was strategic, with budgets and funding required to advance with the projects already in place.

“Keeping in mind that, as a business, we have a strategy to mitigate our costs, and one of the strategies we have always applied is that we are practically integrated . . .

“There is a commodity cycle that lasts almost five years; they boom and slump, which we have factored into our projects before we start them up,” he said.

Mr Ojo further said, as a business that was integrated, it had been able to mitigate obligations to contractors.

“A good example is that during the Covid-19 period, most companies went into crisis because they had arrangements with contractors in terms of their drilling projects.

“But in our case, these drills are in-house, and so we don’t find ourselves in any contractual challenge. We have the budget for it,” he said.

Zimbabwe produces several mineral commodities, which are, in many instances, exported in raw form.

Recently, global prices of commodities such as PGMs, nickel and lithium, which are key revenue contributors, have been declining, resulting in some companies retrenching and posting losses, while others have suspended expansion projects.

However, Mr Ojo said he was optimistic about prospects of a price rebound considering that the demand and supply cycle would cause prices to correct themselves.

“And even less assumed they stay, we have factored that into our operation, and we will still be a very profitable organisation, and that can be proven by the fact that, while everybody is retrenching, we will not retrench anybody yet, and we don’t plan to retrench anybody because we are in a safe place from an operating position,” he said.

The Government has been pushing mining companies to expedite the implementation of approved and licensed projects, which could play a part in the US$12 billion mining industry.

According to the World Platinum Investment Council, Zimbabwe has the world’s third-largest PGMs resource along the mineral-rich Great Dyke, after South Africa and Russia.

Currently, Zimbabwe has three platinum producers, namely Zimplats, Mimosa and Unki, while the fourth, Karo Resources, is targeting its first ore production by 2025.