Monday, March 4, 2024

What is going on at Kasenseli gold mine ?

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Who is harming ZCCM-IH and Zambia’s interests ?

1. Background

1.1 Former Government Policy on Gold

In a statement on 24 May 2020, Former PS Mines Barnaby Mulenga explained that the PF Govt gave a mandate to ZCCM-IH to coordinate efforts to purchase the gold from artisanal miners and to coordinate all gold trading business in Zambia.

The former PS Mines also said stance of PF Govt was that all gold from Artisanal miners and ZCCM-IH golden mining is bought through ZCCM-IH to Bank of Zambia to build strategic reserves for the country and thus to strengthen the kwacha. The former PF Govt declared gold as a Strategic Mineral meant to allow all citizens to benefit from its exploitation.

1.2 Operation of the Kasenseli mine in Mwinilunga district

Zambia Gold Company Limited (ZGCL) obtained the Small-Scale Mining Licence number 26457-HQ-SML for Kasenseli Gold Mine on 16th June 2020 after following all statutory and regulatory approvals from relevant Government entities and stakeholders including the Ministry of Mines and Minerals Development, the Zambia Environmental Management Agency (ZEMA) and the Chibwika Chiefdom.

ZGCL has obtained the mining licence to exploit the gold deposit but the management is carried out by Kasenseli Mine. The shareholding is as follows: ZGCL (ZCCM-IH 51%,Ministry of Finances 49%) 70%, Chief Chibwika 5%, the two previous licence holders Kampoko Resources with 12.5 percent and PCB Mining 12.5. (ZGCL’s press Statement,
23/08/2021)

Despite its meagre resources, ZCCM-IH financed all the equipment needed for mining and put in place the technical staff, with K45 million of capex initially, rising to K120 million.On several occasions, former PS Mines Barnaby Mulenga and former Mines Minister Musukwa visited the site and congratulated the ZCCM-IH teams for their professionalism, the work they had done and the rapid start-up of the Mwinilunga mine in the face of the national emergency to sustain the kwacha.

On 5 october 2020, the project being developed by ZCCM-IH has so far produced 50 kilograms of gold worth USD $3 million. (Appendix 1)

On 19 July 2021, BoZ has purchased 86.84 Kgs of Kasenseli Gold since december 2020 at a cost of K103.8 million. (Appendix 2)

More than 140 Kgs of gold were extracted from mining operations in Mwinilunga since mining commenced. The Chief Chibwika’s comments on the failure of the operation were therefore completely false and misleading. The amount of gold produced at Mwinilunga is all the more satisfying given that ZCCM-IH’s teams face a number of challenges: fences are constantly being destroyed (Appendix 3), gold ore stolen and equipment ransacked by
Jerabos who seem well coordinated and organised. On each occasion, ZCCM-IH had to replace the equipment and rebuild the fences.

By October 2021, ZCCM-IH had purchased new machines that would have increased raw material processing by a factor of 20 per hour. « The setting up process for the new machinery was almost complete when the government suspended the mining and processing activities at the gold mine ». (Appendix 4)

2. Closure of the Kasenseli Gold mine

On 23 october 2021, Mines Minister Paul Kabuswe has suspended operations and said “What I can tell you is that the new dawn government always has the best interest of the nation and workers at heart. This is not a decision that will take forever. We have given ourselves maybe within a month to be able to resolve all the issues” said
Kabuswe. (Appendix 5)
« If we fail within a month, at the most maybe 60 days just to make sure that all the salient
issues are actually dealt with. »

Two years later, the mine is still closed…

3. The Reasons do not hold water

3.1 Safety
During his visit to Kasenseli Mines Minister Paul Kabuswe vociferated against the ZCCM-IH teams, questioned their professionalism and lynched them in the Media. This is unfair and disrespectful given the hard work of the ZCCM-IH teams. Why should ZCCM-IH be responsible for the death of illegal Mwinilunga Jerabos outside its mining concession? It is the duty of the state! ZCCM-IH, a listed company, does not have to make up for the failings of the Zambian State. What did the Minister of Mines do to prevent these looters and illegal foreigner miners from plundering national assets or ensure the safety of these Jerabos ?

3.2 Questionable behaviour of Mines Director Mooya Lumamba

One can be surprised by the zeal and regulatory arguments used by Mines Director Mooya Lumamba to suspend the exploitation of Kasenseli mine after a year and a half, while the former Mines PS and Minister have visited the site several times. Why did Mines Director Mooya Lumamba not advise the ZCCM-IH teams before? We would like him and his colleagues to use the same firmness and toughness to bring to heel the mining companies that do not be fair with ZCCM-IH or those whose miners denounce the working and safety conditions.

3.3 Strange « social license »

ZGCL has undertaken corporate social responsibility initiatives as such sinking of a water borehole, solar powered with 10,000 litres tank capacity, 3 water collection points in Kasenseli, a Rural Health Centre and moreover corporate social investment initiatives as such working on the main roads (Appendix 6). Kasenseli Gold mine is the only mine project in the country in which the community holds a shareholding at 5 % through the
Chibikwa chiefdom Trust. (ZGCL’s press Statement, 23/08/2021) Mines Minister Kabuswe said “You may wish to know that the Zambia gold company has lost its social license with the people ». (Appendix 5)
What is this strange « social licence » ?

In an English court ruling, 2,500 residents , including 643 children, of the villages of Shimulala, Kakosa, Hippo Pool and Hellen, near the Nchanga copper mine, were found to be victims of pollution and poisoning generated by the Vedanta-run KCM operation. Where was the so-called social licence of KCM ? Similarly, we are eager to know the « social license » of Kobolds’ Mingomba and FQM’s Kalumbila Nickel mines…

4. Disastrous consequences

4.1 « ZCCM IH profitability questioned »

This is the title of an article in the Zambian Businnes Times (edition of 8 November 2023), which rightly points out that the profitability of ZCCM-IH is only 1%, which is very low compared to standards… When millions of dollars are invested in developing a mine and they are unsuccessful because of shady decisions and political interference, this cannot be otherwise…

4.2 Collapse of the kwacha

The mandate given to ZCCM-IH was to mine Zambia’s gold and sell it to BoZ in order to significantly strengthen the kwacha. Analysts say the indefinite closure of Kasenseli gold mine has also put the build up of gold
reserves by the BOZ in disarray, contributing to the streak of the Kwacha depreciation.(Appendix 7)
Yesterday, Bloomberg anounced that Zambia’s kwacha falls to a record low against the US dollar… (Appendix 8)

4.3 Job losses in the Mwinilunga district

Few months ago, Mwinilunga town Council Chairperson Jonathan Chinyimba has called upon President Hakainde Hichilema to quickly push up reopening of Kasenseli Gold mine.He said the delay has caused the people of Mwinilunga to remain in poverty, and remain without employment as youths are crying day and night. (Appendix 9)
In June 2012, late President Sata said Zambia was tired of moving with a “begging bowl” from one developed country to another as the country had the capacity to become self-reliant and lift its millions of unemployed youths out of poverty if its vast natural resources were exploited to the benefit of Zambians. These words ring out bitterly now with the closure of the formidable Kasenseli gold mine…

5. Very fishy situation

The consequences of the mine’s closure are catastrophic for the kwacha, leading to inflation and therefore high prices, as well as a lack of work and development in the Mwinilunga district.When Mines Minister Paul Kabuswe closed the mine, he said : “ What I can tell you is that the new dawn government always has the best interest of the nation and workers at heart (cf 2).

In July 2022, President HICHILEMA said he will resolve all outstanding issues at Kasenseli Gold Mine and making the mine operational is top priority for government (Appendix 10).The mine is still closed despite reasons that do not hold water, affecting the interests of the country and the people of Mwinilunga.

Moreover, there have been recurring rumours on social networks and in the press about illegal mining and hijacking at the mine since the closure and the end of ZCCM-IH monitoring.So why cannot ZCCM-IH use its mining licence? Who has a vested interest in ensuring that ZCCM-IH does not control the mining and exploitation of gold? Who are the bigwigs who have an interest in keeping the Kasenseli gold mine closed?

We would request anyone with information about this very fishy situation to get in touch with us.

Issued by:
Thierry CHARLES
Spokesperson of Minority Shareholders of ZCCM-IH
10 November 2023, FRANCE.
[email protected]

Appendix 1

50KGs Of Gold Worth $3 Million Produced At Kasenseli


Appendix 2
https://www.lusakatimes.com/2021/04/23/bank-of-zambia-purchases-282-79-kilogrammes-of-gold-
since-last-december/
Appendix 3

Illegal Miners Invade Kasenseli Gold Mine


Appendix 4
https://dailynationzambia.com/2021/12/kasenseli-in-machinery-boost-gold-production-to-increase-
with-new-equipment/
Appendix 5

Govt suspends operations at Kasenseli gold mine


Appendix 6

‘Kasenseli gold only benefited politicians, foreigners’


Appendix 7

Kasenseli gold mine closure contributing to Kwacha slide


Appendix 8
https://www.bloomberg.com/news/articles/2023-11-09/zambia-s-currency-plunges-to-record-
despite-government-steps?cmpid%3D=socialflow-twitter-markets#xj4y7vzkg
Appendix 9

HH urged to step in over delays in Gold mine re-opening


Appendix 10
https://www.znbc.co.zm/news/resolve-kansenseli-gold-mine-impasse-chief-chibwika/
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14 COMMENTS

  1. I’ve always contended that gold production enhances the strength of the Kwacha. I’ve seen this in about a dozen of countries in which I’ve worked. Zambia has the potential, through artisanal mining, to double gold production in 18 months. In addition to this mine, Chumbwe Gold Mine, Don Robin and Matala Gold Mines and a plethora of others in Mukushi, Eastern Province and Central Province remain untapped. My roadmap for doing so is available to those interested.

    • What is crucial but we havent been told is how many carats is this gold from Kasenseli? It looks like the Ministry of Mines would rather have the haphazardness of the past miners than to improve on the sanity of ZCCM-IH operations. As for the minister giving himself one month to solve issues dont forget this is a government that promised the Kwacha would gain value to single digit figures by 14h00 of their swearing-in. They are experts at exaggeration and lies so Kabuswe was just confirming the flock from which he comes

  2. Zambia, a country just too rich to be this poor. When you go to villages and compounds and see the unbelivable squalor that people live in, you ask yourself what wrong we did as a country to deserve all these years of under development. The struggle is and has been real for years on end now for a country endowed with gold and other abundant resources. Unbelivable

  3. Not very well written, but soke great questions to think about.
    Zambia has no reason to have a weak currency with all the gold available. One can even go further and ask, where is the gold being mined in Mpika and Mumbwa going? We know kasenseli is not the only place gold is being extracted. There are many, many places. Who is benefitting?

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  4. It looks like this country has been sold. If you have opportunity to travel around into the rural areas that are rich in natural resources, you will see for yourself. Foreigners are everywhere. Land, is being sold to foreigners in thousands of hectares at the expense of locals. Instead of favouring local ownership of our resources, foreigners are being given preference.
    Zambians I urge you to buy as much land in rural areas, as you possibly can. There us a scramble for zambia by foreigners. Just recently I met two guys who came all the way from India, and have been given 7000 hectares of land by government.

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  5. The problem with Zambia is that each party’s aim is to undo what the previous government did. All we need is to improve on what your predecessors were doing…. but greed, pride and selfishness always triumph. The only thing Upnd has maintained is the NHIMA which I suspect is benefitting some pockets…. but we’re benefitting.
    Chiluba dismantled everything KK had put in place.
    We need continuity but with a different approach.

  6. The Black Mountain has been mined since 2005 but Upnd finished it within months of being in power. The number of trucks transporting the stuff was unbelievable.

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  7. The most times we hear of ZCCM-IH complaining, it is the minority shareholders. For example, government unilaterally surrendered dividends (shareholding) rights opting for paltry royalties at Kansanshi mine.
    The last time the ‘bigfish’ cried foul was when they ‘betrayed’ Vedanta’s KCM for liquidation. It follows therefore that the big fish, IDC and GRZ, are enjoying themselves and benefiting in the Kasenseli river basin sidelining the tu kapenta.

  8. Thierry Charles is asking who the bigwigs behind the chaos at Kasenseli gold mine are when he’s mentioned them in his statement. Mooya Lumamba is no longer in the picture because he was unceremoniously dismissed. But between Lumamba and Kabuswe, the latter is not honest. Lumamba was a straight man and that’s why he couldn’t fit in the government of crooks. Kasenseli is officially closed but illegally open as Bally and his team fix things. Give them chance to work. That gold is building mansions

  9. All Mighty Father, thank You for this day.I thank You for the GIFT of life and family. I ask that You would guide my path through and through, more specifically, my thoughts, words and actions. Please be with me throughout the day and help me navigate whatever comes my way. Most importantly, help me to reflect and live out my life in a way that is honoring to You. To hell with upnd govt

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  10. Point 4.3 makes very sad reading, poverty in the midst of plenty and this is a reflection of our resource rich Zambia.

    Needless to say gold in Zambia like sugilite have become free for all.

    I’m not sure of what government policies are available for the mining of these minerals

  11. We are a nation in which opportunists pounce on national assets and wealth as confusion reigns. The opportunists include those who pounced when we were selling off national assets under the pressure of Western capitalists in 1991

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