HomeBusiness DigestRBZ-owned mine facing collapse

RBZ-owned mine facing collapse

GOLDEN Kopje mine, a mine owned by the Reserve Bank, could be headed for collapse amid reports that government is failing to court a new investor due to stringent investment conditions and a sharp decline in mineral ore.

Mining sources told businessdigest this week that production at the Chinhoyi-based gold mine dropped to an all time low of 2kg per month after the mine stopped underground mining when a Chinese company withdrew from the mine last February.
At its peak, the mine produced up to 40kg of bullion monthly. The source warned that the mine could also lose machinery worth several millions due to flooding.
Questions faxed to the Reserve Bank and the Mines ministry on Monday were not attended to by the time of going to print.
Sources however said Golden Kopje, a mine owned by Carslone Pvt Ltd, a subsidiary of the central bank, could soon be submerged after the cash-strapped Reserve Bank reportedly failed to attract new investors owing to “unviable” investment conditions.
The source said new partners are shying away from the mine saying a 51/49% ownership controlled by government was less enticing for an investor that would bail out a mine seeking immediate recapitalisation.
“Production at the mine is very low despite the relatively improved power supply that could be attributed to the winter wheat crop in surrounding farms. The mine is currently dump-treating — recycling slimes that were left behind by previous investors who practised underground mining,” said a mining source.
“Recently an investor withdrew a US$35 million bid arguing that his equity should have been higher than the 49% being granted by government. The mine urgently needs fresh capital lest it could collapse.”
The same source said after a Chinese investor withdrew last year, the central bank made massive job cuts that saw the mine cutting its staff complement to just over 120 from 300.
With the central bank saddled with millions of dollars in debt for gold deliveries made by miners three years ago, any plans by the central bank to resuscitate operations at the mine could be an exercise in futility.
Other debtors are also in hot pursuit of Reserve Bank properties with some properties having been auctioned in recent months.
The apex bank is seeking recapitalisation from treasury after the International Monetary Fund warned that the current financial position of the bank leaves Zimbabwe’s financial services sector exposed.
Carslone took over from businessman MacDonald Chapfika in 2007 after paying US$16 million.
The collapse of Golden Kopje could deal a severe blow to Zimbabwe which last year struggled to produce 5 tonnes of bullion. More than 10 years ago, Zimbabwe produced 29 tonnes of gold. –– Staff Writer.

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