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Down but not out

Mining through a global pandemic

The COVID-19 pandemic has affected the commodity markets in a variety of ways. On a company level, operations have been affected through isolated outbreaks and government mandated shutdowns.  Demand for many commodities like copper, iron ore and Zinc remain low with a lower near-term demand on the horizon. One of the key exceptions to this is Gold which typically benefits from higher levels of uncertainty, according to Delloite’s  Mining and Metals -Global leader Andrew Swart

This global pandemic outbreak, with reason caused markets to shake and many businesses; including some longstanding household names were forced  into administration and closure. The mining sector is no exception and our resilience as companies will be defined by our ability to employ crisis management disciplines. For all our operations at Kromount Technologies (including those at the mines we manage on behalf of our Consulatancy and Management Service clients), our first concern has been for the safety and welfare of our staff.

covid 19 blog

When COVID-19 hit,  Zimbabwe was already experiencing increased food insecurity heightended by the El Niño-induced drought,  as well as economic crises linked to shortages of cash and high inflation. During the first weeks of the mandatory lockdown our community sustainable development subsidiary ‘Truth’ focused its efforts to the distribution of PPE, handwashing soap, buckets with taps and emergency food parcels. Working with Triumph Africa (our 2020 and 2021 supported charity), we were able to distribute these emergency packs to over 700 vulnerable families across the communities where we operate.

The mining sector was classified as an essential service and miners were allowed to go back to work in the early stages of the lockdown subject to complying with the COVID-19 Regulations. Before restarting  our  operations, we updated our Health and Safety policies and procedures,  conducted COVID-19 awareness and prevention training  as well as additional PPE to our staff. We also stopped all non-essential visits and tours of our flagship mine Vuti Quarry and gold mining sites.

It has however not been all gloom in this period as it presented opportunities for Mergers and Acquistions as well as Joint Ventures to those with strong balance sheet positions within the sector.  In 2019, the Zimbabwe government announced a plan to grow the mining sector’s annual earnings to US$12 billion by 2023, which would be a 344% spike from US$2.7 billion earned in 2017. Gold, platinum and diamonds are earmarked to fuel this growth, contributing respectively US$4 billion, US$3 billion and US$1 billion to the US$12 billion target.


The US$12 billion target for mining earnings offers even more opportunities to the sector and can be a propeller for socio-economic development post Covid-19. It is no secret that Zimabwe is a resource rich country, and it is no surprise that the mining sector played a featuring role in the latest National Budget. Finance and Economic Development Minister Mthuli Ncube presented a National Budget in which the economy is projected to grow by 7 percent.The mining sector is key to this growth, with a forecast of 11 percent in 2021 as compared to minus 4,7 percent recorded this year.

Achieving this target  of 11 percent is hinged on increased production levels and this requires greater structured investment into the sector.“That is attainable through mostly expanded operations and building fundamental infrastructure that should support the sector, such as sustainable base load energy supplies for example”  as highlighted by the Mines and Mining Development Committee chairman Mr Edmond Mkaratigwa

Funding such growth has always been the challenge. Bloomberg recently reported on 4.4% stake acquisition in Great Dyke Investments  by Fossil Mines Ltd. Fossil, owned by Zimbabwe’s Obey Chimuka, will invest $30 million in the Darwendale project, through a combination of cash and services, including for engineering, procurement and construction. This is an example of an opportunity that arose after the coronavirus pandemic delayed project fundraising, which was originally due to be completed this year. The Financing of $665 million is now expected to be finalized in the first quarter of 2021 according to Great Dyke Investments  Chief Executive Officer Alex Ivanov.

We have seen similar opportunities although not on the same scale,  At Kromount Technologies .  Leveraging our balance sheet position we have been able  to expand our asset portfolio. We are equally delighted to have helped  some of our clients in our Gold Mining Consultancy  and Management service to complete acquisitions in order to scale up their operations.

At Kromount Technologies we  have also seen a growth in the number of newcomers to the sector and are in the process of helping these mining syndicates and companies to strategically plan and kick start their operations.

risks in mining

Finally, understanding risk and having adequate and current risk systems across any organisation is essential to navigating through pre-existing challenges that are now compounded by the effects of the global pandemic. The same applies from ASM to mining on a large scale.

Deloitte’s  Resilient Leadership framework defines three time frames of the crisis. Respond is mainly about managing continuity. Recover concerns learning and emerging stronger. Thrive is about taking the measures to grow sustainable business for various potential scenarios.

Practical take aways from Andrew Swart for navigating this season include

  • Determine how to maintain critical services whilst ensuring safety of empolyees through a number of posible scenarios
  • Focus efforts on undertsanding your financial and legal exposure, formulate plans to release cash and formulateviability through uncertainty
  • Consider if the Crisis can be a catalyst to rethink how and where work can be done. Improve the ability to collaborate remotely and accelerate adoption of automation and digital capabilitiies


Jack Makate, is Kromount Technologies Operations Director.