Academic literature on the topic 'Mines and mineral resources – Valuation – Zimbabwe'

The article examines strategies of harnessing mineral resources for community empowerment, poverty reduction and infrastructure development in mining areas of Zimbabwe. Despite abundant mineral resources, the majority of Zimbabwean indigenous communities living close to the mines have limited access to directly or indirectly benefit from the mineral resources. Using a descriptive survey to collect data, this research article gives a strong proposition on how the Indigenisation and Economic Empowerment Act can be used as a vehicle of harnessing mineral resources. The article argues that pro poor mining policies that ensure the harnessing of mineral resources for community empowerment, poverty reduction and infrastructure development are paramount. The article further argues that the Indigenous and Economic Empowerment Act needs to be harmonised with other sector legislation in the country. The article concludes that the development of infrastructure and provision of public utilities such as electricity, water, establishing micro-credit to small and medium enterprises and implementing broad-based indigenisation policies are some of the strategies of improving rural livelihoods. Similarly direct and indirect linkages between the mining sector and local economy could be enhanced through the provision of food supply to the mine, manufacture of mining inputs, provision of security services and supply of labour by the local community. The article recommends that the harmonisation of legislation that has an effect on harnessing of mineral resources by local communities will ensure community empowerment, poverty reduction and infrastructure development.

The importance of cost estimation of mineral resources in modern economic theory is noted in the article. It is noted that all currently existing methodical and methodological approaches to the valuation of minerals by their economic nature are in fact an analysis of the economic feasibility of realization of investment projects for the development of deposits, which actually answers the question: is the investment project for the development of the field economically viable. Based on the analysis of literary sources, it is established that at the present stage of development of the world economy, the interest in the economic evaluation of the efficiency of development of mineral resources is not waning. However, methodological approaches are different and there is still no unity in them. Experts point out that the current methods require improvement due to the low accuracy of calculations, since the size of the cost estimate depends on the amount of rental payments for the use of mineral resources in mining and the starting price of the sale of a special permit for the development of deposits at auction. For the first time in the economic theory economics, a graphoanalytic method for the cost estimation of mineral deposits has been proposed. The features of this methodological approach based on integral calculus, including the integration of continuous functions, as well as the method of discounting cash flows with simultaneous consideration of the life cycle scheme of deposits, namely mining and geological conditions of mining are opened. The step-by-step sequence of realization of the proposed method is resulted. It is stated that this approach will allow to obtain a more exact cost estimate of a deposit or subsoil by taking into account the following factors: the life of the deposit, the market conditions of the mineral resources, capital and current expenses connected with extraction of minerals and costs of the subsoil user in the post-mining a period of time related to the closure of mines and quarries and the reclamation of disturbed lands formed during the extraction of minerals.

The adequate geological support and engineering of production processes requires mining companies to have structural geologists to be in charge for the acquisition, processing, analysis and preparation of geological and related data during development of a mineral deposit, starting from prospecting and exploration and up to reclaiming. In the prevailing practice, geologists of mining and servicing companies are mostly aimed at the appraisal and control of mineral resources while the study of geological structure of a deposit is assumed finished at the stage of prospecting and valuation as arule. At the later stages, geologists focus mainly on the quality and quantity of minerals, and geological bodies are often interpreted without regard to the actual geological structure of a deposit. The structural geology as a branch within a mining company should have a specific development strategy. This strategy is to account for the necessity of the other services for the input geological data, while the applied geological models should be used in mine design and be integrated in the production process. The intending specialists in the allied services should be informed on the available models, their value and completeness, as well as should possess free and intelligible access for operation. Efficient production management and risk control requires close communication between structural geologists, geomechanics, resource geologists, mining engineers, mineral dressing engineers and surveyors.

Thesis (MPA)--Stellenbosch University, 2014.
ENGLISH ABSTRACT: The aim of this research was to investigate the challenges to effective strategy implementation at the Zimbabwe Mining Development Corporation (ZMDC). Strategic planning is argued to have overshadowed the area of actual strategic implementation. Organisations put a lot of effort into drafting good plans, but do not put equal effort into their realisation. It was assumed that there is a big gap between strategic planning and implementation. This is what drove the researcher to go into the field and explore the situation at the ZMDC in greater depth in a bid to bridge the gap through research on the subject matter. Literature on strategy and strategy implementation was analysed critically. The research was guided by the post-positivism research philosophy. This research paradigm enabled the use of qualitative methods, which facilitated the interaction with respondents. The case study research design was adopted, as the research sought to discover the impediments to strategy implementation and the best way forward in turning the strategies on paper into action. The major findings were that there indeed were loopholes in strategy implementation at the ZMDC. The challenges to the strategy implementation process at the ZMDC were noted to be poor delegation, lack of training and development, poor ethical values, limited resources, low motivation of employees, poor communication and coordination, lack of control and poor teamwork. The organisation was noted to have deficient communication processes, which contributed to the challenges facing strategy implementation. The findings brought to light the fact that strategic planning starts with the executive management, hence the need for their commitment to owning the entire process of strategic planning and execution. The study revealed limited involvement of staff in the initial stages of developing strategy. In order to enhance the implementation of strategies, it was recommended that motivational leadership at the ZMDC had to be ensured. Leadership, ownership and drive are required to compete effectively and to deliver growth. Management should adopt the „Strategy into Action‟ planning approach, charting a course through performance factors, linking strategic thrusts to projects, as well as departmental and individual activity, with the ultimate goal being to enable the ZMDC to effectively translate strategic goals into results in a clear and inclusive process. To turn strategic desires into action that drives results, the ZMDC leaders need to develop strategic thrusts and broad-based action plans, putting the vision to light, and picturing to everyone what would be viewed as strategic success and what it takes to achieve and measure the desired outcomes.
AFRIKAANSE OPSOMMING: Die doel van hierdie navorsing was om ondersoek in te stel na die uitdagings vir doeltreffende strategie-implementering by die Zimbabwe Mining Development Corporation (ZMDC). Daar word aangevoer dat strategiese beplanning wesenlike strategiese implementering oorskadu. Organisasies werk hard aan die opstel van goeie planne, maar werk nie ewe hard aan die verwesenliking daarvan nie. Die aanname is gemaak dat daar ʼn groot gaping tussen strategiese beplanning en implementering is. Dit het die navorser aangemoedig om die situasie by ZMDC prakties en op diepgaande wyse te ondersoek ten einde hierdie gaping deur navorsing oor die onderwerp te oorbrug. Die literatuur oor strategie en strategie-implementering is krities ontleed. Die navorsing is gerig deur ʼn post-positivisme-navorsingsfilosofie. Hierdie navorsingsparadigma het die gebruik van kwalitatiewe metodes moontlik gemaak, wat interaksie met die respondente in die hand gewerk het. ʼn Gevallestudie-navorsingsontwerp is gebruik, aangesien die doel van die navorsing was om die struikelblokke tot strategie-implementering en die beste pad vorentoe om strategie op papier in aksie oor te skakel, te bepaal. Die vernaamste bevindings was dat daar wel skuiwergate in strategie-implementering by ZMDC is. Die uitdagings rakende die strategie-implementeringsproses by ZMDC is geïdentifiseer as swak delegering, gebrek aan opleiding en ontwikkeling, swak etiese waardes, beperkte hulpbronne, lae motivering van werknemers, swak kommunikasie en koördinering, gebrek aan beheer en swak spanwerk. Daar is gemerk dat die organisasie gebrekkige kommunikasieprosesse het, wat tot die uitdagings vir strategie-implementering bydra. Die bevindings het aan die lig gebring dat strategiese beplanning by die uitvoerende bestuur begin, en dus is hul toewyding tot eienaarskap van die algehele strategiese beplannings- en uitvoeringsproses noodsaaklik. Die studie het beperkte betrokkenheid van personeel by die aanvanklike fases van strategie-ontwikkeling getoon. Ten einde die implementering van strategieë te bevorder, is die aanbeveling om motiveringsleierskap by ZMDC te verseker. Leierskap, eienaarskap en dryfkrag is nodig om doeltreffend mee te ding en te groei. Die bestuur moet die beplanningsbenadering van „Strategie in Aksie‟ aanneem, wat die weg deur prestasiefaktore aantoon en strategiese dryfkragte aan projekte asook aan departementele en individuele aktiwiteit koppel. Die uiteindelike doelwit is om ZMDC in staat te stel om strategiese doelwitte doeltreffend in ʼn duidelike en insluitende proses in resultate om te skakel. Ten einde strategiese strewes in aksie wat resultate lewer om te skakel, moet ZMDC se leiers strategiese dryfkragte en breedgebaseerde aksieplanne ontwikkel, waardeur die visie duidelik gemaak word en almal duidelikheid het oor wat as strategiese sukses beskou word en wat dit verg om die gewenste uitkomste te bereik en te meet.

Master of Science in Engineering by advanced coursework and research: A research report submitted to the Faculty of Engineering and the Built Environment, University of the Witwatersrand, Johannesburg, in partial fulfilment of the requirements for the degree of Master of Science in Engineering Johannesburg, 2016
The mining sector plays a significant role in the economy of Zimbabwe. The mining sector is the second largest contributor to the country’s GDP at over 20%. Zimbabwe as a country is endowed with abundant mineral resources. The top three commodities in terms of estimated resources are iron ore, coal and platinum with resources of 30 billion tonnes, 26 billion tonnes and 2.8 billion tonnes respectively. Zimbabwe’s vast mineral resources and reserves are of strategic importance to the Zimbabwe economy. Coal mining is one of the major economic contributors to the mining industry in Zimbabwe. The purpose of the study is to determine the optimal operational model for Makomo Resources from a mining and processing point of view. The study is based on a coal-mining project in the Zimbabwean mining industry. Makomo Resources is the largest privately owned coal mining company in the country, which has a mining licence to perform coal-mining activities in the north-west part of the Bulawayo Mining District of Zimbabwe. Makomo Resources applies a conventional strip mining method by means of truck and shovel to extract the coal reserves. Makomo Resources is supplying over 200,000 tonnes of coal per month to the local and export market. The mine has invested in USD20 million capital to commission a wash plant. The study investigates how to optimise the plant throughput by comparing two mining options: Mining Option 1 - crush and screen 2m power coal, crush & screen and wash a full 7m low ash coal seam and wash 2m of coking coal. Mining Option 2 – crush and screen 2m power coal, crush & screen a 3m low sulphur coal seam and wash low ash coal and coking coal of 4m and 2m respectively. The study investigated all the marketing, geology, mining and financial parameters in the Zimbabwean coal mining context. The study determines the appropriate mining methodology and explore to optimise the coal processing. Two financial models were developed to evaluate and compare the two proposed mining options, determine their feasibility and conclude the optimal mining model. Financial techniques were used to analyse and evaluate the two mining options. The financial models were used to analyse and evaluate the following:  The cashflow over the 10-year period.  The Net Present Value (NPV) and Internal Rate of Return (IRR) of each mining option.  The payback period of the washing plant.  Profitability Index per mining option. The NPV of a project determines the economic value of the mining project. The decision on a mining investment is mostly related to the NPV and IRR of the project. Discounted Cash flow (DCF) models were developed for both mining options that shows project cash in and out flows and calculates economic indicators, such as IRR and NPV. The NPV and IRR were the main methods for the evaluation of the two mining options. The resulting DCF models were developed in an Excel spreadsheet format designed for a 10-year Life of Mine (LOM) period. Mining Option 1 has a higher NPV of USD38.2 million in comparison to USD9.7 million for Mining Option 2. The IRR for Mining Option 1 was calculated at 48%, which is bigger than the IRR for Mining Option 2 of 26%. Mining Option 1 has a simple payback period and discounted payback period of 2.7 years and 4.9 years respectively. Mining Option 2 has a simple payback period and discounted payback period of 3.9 years and 11.9 years respectively. Mining Option 1 has a shorter payback period than Mining Option 2. Both mining options have a Profitability Index (PI bigger than one with Mining Option 1 and Mining Option 2 recording values of 1.87 and 1.18 respectively. Mining Option 1 has the better PI value and is therefore more profitable. Based on the economic evaluation, Mining Options 1 is by far more attractive than Mining Option 2, which results in a better return on the investment and profitability, therefore the preferred option.
MT2017

M.Com. (Business Management)
All valuations of mineral assets in South Africa are guided by the South African Mineral Resources Committee (SAMREC) and South African Mineral Valuation (SAMVAL) codes. They have also been adopted by the Johannesburg Securities Exchange (JSE) in order to protect shareholders. Different capital budgeting methods are used for mineral assets valuation in South Africa. These are the net present value (NPV), internal rate of return (IRR), payback period, cost, market and real options methods. It is not known which capital budgeting method is most often used for mining property valuations, as South African mining companies and associations are not required to share their capital budgeting processes with the public. In addition, the SAMVAL code does not recommend the use of the real options method and no reasons are provided. The study was aimed at establishing the capital budgeting method most often used for mining property valuations in South Africa, as well as the reasons why the real options method is not recommended by the SAMVAL code. A judgement sample of expert valuators was utilised in the study and interviews were carried out using open ended questions. The research revealed that NPV is the capital budgeting method most often used for mining property valuations followed by the IRR method. Outside South Africa, Bhappu & Guzman (1995) found that these preferences were reversed. Since the IRR method represents a notional rather than an actual return on investment, South African valuators were found to be more rational than their overseas counterparts in the application of these discounted cash flow (DCF) methods. The findings also revealed that the cost, market and payback methods were less preferred to the NPV and IRR methods. The reasons given were all consistent with the theory. The cost method was avoided because it uses historical cost data which is not usually applicable, the market method was limited due to the lack of available information on truly comparable projects and the payback method was shunned for undervaluing mining properties by ignoring cash flows that arrive after the payback period. The respondents also indicated that the real options method is the least used. The method (which includes the value of embedded optionality) was regarded as complex and not widely understood and this was also thought to explain why it is not recommended by the SAMVAL code. This finding indicated that in South Africa the embedded optionality in mining projects may not be taken into account and as a result, opportunities for the exploitation of its mineral assets could be missed.

Dissertation submitted to the University of the Witwatersrand, Faculty of Commerce, Law and Management in partial fulfilment of the requirement of the degree of MASTER OF COMMERCE IN DEVELOPMENT THEORY AND POLICY University of the Witwatersrand Faculty of Commerce, Law and Management School of Economics and Business Sciences – SEBS Corporate Strategy and Industrial Development (CSID)
Zimbabwe’s mineral sector has been the major contributor of the national economy’s Gross Domestic Product (GDP) since the economic meltdown post land reform programme. The scale of the crisis resulted in the adoption of the multicurrency system in 2009. In an attempt to save the economy from total collapse the government has turned to the mining sector to establish linkages through mineral beneficiation. This study has analysed whether the creation of linkages in the mineral sector, through beneficiation and value addition, could resuscitate the economy. Literature on natural resources shows that countries that are resource-rich experience slow growth rates than resource-poor countries. The study found that mineral resource dependency could be a platform or foundation for economic growth and developmental opportunities through linkages creation in the mineral sector. However, resource-based development strategy is a challenging development path that needs a strong state with vested capacity to actively direct and co-ordinate economic transformation through deepening of the resource sector. Political tensions in Zimbabwe are the overriding obstacles to economic linkages creation in the mining sector and across other sectors. It is therefore, imperative to understand the socio-economic and political dynamics and interactions that influence and shape policy decisions, implementation and their outcomes in order for Zimbabwe to optimise economic linkages and revive its economy.
MT2017

A research report in partial fulfilment of the requirements for the degree of Masters of Science in Engineering submitted to the Faculty of Engineering and the Built Environment, University of the Witwatersrand, 2019
Mining operations are by nature capital intensive. Historically mining companies have in general been poor at capital allocation decision making, which translated in poor returns on capital invested and impairments. Better capital allocation strategies are required for mining companies to unlock more value from invested capital. This research focussed on identifying factors to consider during the capital allocation decision-making process that can potentially unlock value in mineral projects. The research included a review of capital allocation decisions and performance of five mining companies from 2001 to 2017. This period covers one full commodity price cycle to determine the impact of the prevailing commodity price on capital allocation decisions. Through analysis of the historical capital allocation of the five mining companies the research aimed to test if it is possible to unlock value by allocating capital in a counter cyclical approach compared to the prevailing commodity prices. From the analysis of the historical capital allocation decisions made by five mining companies a number of common trends were identified. The research found that during a period of higher commodity prices, mining companies focussed primarily on volume growth. This is confirmed by a strong correlation between the value of capital approvals and the average commodity prices of the basket of minerals produced. The higher allocation of capital towards growth initiatives, such as expansionary capital and acquisitions, have in a number of instances resulted in significant capital over-expenditures in projects. The over-expenditures have directly contributed to a number of impairment charges made by the diversified mining companies during a declining commodity price cycle. Conversely, during periods of declining commodity prices mining companies focused on rationalisation of mining projects and operations and disposal of assets that do not meet minimum investment criteria. During these periods capital allocation towards growth projects were reduced, with most capital allocated to reduction of net debt on the balance sheet. The research found a common trend of higher capital allocation towards growth projects during historical high commodity prices, and during subsequent lower commodity prices capital allocation was directed towards reduction of net debt and disposal of loss making assets. Results from the research conducted on the five mining companies indicated that there may be correlation between return on investment and the timing of the capital investment in relation to the position on the commodity price cycle at the time of the investment. However, the results obtained for the five mining companies were influenced by operational returns from existing operations, which makes it difficult to determine returns realised on incremental capital expenditures. From the results obtained from the analysis the following recommendations are made for a capital allocation strategy to increase the probability of unlocking value over the long term. Firstly, a company should have a clear capital allocation framework that is guided by the mining company’s strategic objectives. The framework should clearly indicate the hierarchy of importance when allocating capital to different areas. Secondly the company should clearly identify the minimum investment criteria to be met before capital is allocated to an investment. Lastly the mining company should aim to consistently invest capital throughout the commodity price cycle, and be cautious of over allocating capital towards growth projects during periods of high commodity prices.
TL (2020)

Although referencing temperate, rather than tropical, rainforest destruction in the United States of America the above passage highlights the shift in landscape valuation driven by modern demographic and economic pressures. Firstly, as a greater proportion of the world’s population shifts to the tropics over the course of the twenty-first century, more and more local smallholders will rely on tropical forests as a source of freshwater, agricultural land, and urban land, as well as timber, medicine, and food (Ghazoul and Sheil, 2010; The State of the Tropics Project, 2016). Furthermore, rather than solely being contexts for local subsistence and use, tropical forests are now also national and international ‘mines’ that provision high value wood, minerals, fuels, and land for multi-national businesses and markets. Notions that tropical forests should be removed, rather than managed or maintained, in order to increase local productivity and land value, have led to them becoming the most threatened terrestrial environments on the face of the Earth after the polar ice-caps. Certainly, the increasingly dramatic impacts these pressures are having upon them form part of broader discussions of a new, human-driven era of earth systems domination known as the ‘Anthropocene’ (Malhi et al., 2014). Disproportionate biodiversity, the regulatory role these habitats play in local and regional soil structure and chemistry, and their position within local, regional, and even global climate systems mean that human alterations to tropical forests, that have been argued to have changed in nature and scale since the European industrial revolution of the eighteenth century and the ‘Great Acceleration’ of the 1960s, have massive implications for the planet as a whole (Malhi et al., 2014; Malhi, 2017). As a result, tropical forests are a focal political, economic, and cultural battlefield between local populations reliant upon living within them, and business and governmental interests seeking to extract from them. This chapter explores the tensions that exist in the human occupation and use of global tropical forest regions today, including the advance of urbanism and industrialization, exploitation of mineral, floral, and faunal resources by local groups and multi-national corporations, and their key position in discussions of anthropogenically induced climate change.