Ministers stall $20m gold recovery

A LOCAL company, Townsend Enterprises, which is contracted to supply river sand for the construction of the US$533 million Kariba South Power Station extension project, has made an impassioned plea to Finance minister Patrick Chinamasa seeking a special dispensation to recover gold from the sand.

By Hazel Ndebele

Government has contracted a Chinese company to boost energy output from the country’s largest man-made lake as the country continues to face perennial energy shortages. This project is running concurrently with the upgrading of the dam wall at Kariba resulting in private companies like Townsend being engaged as suppliers.

The development comes as it emerged that the country has lost gold worth US$20 million to the dam wall in the last seven months.

The company was last year sub-contracted by the Zimbabwe Power Company (ZPC) to supply sand to Chinese firm Sino Hydro from a concession on the Gache River owned by Chapungu Safaris. The company then discovered gold deposits on the sand before writing a letter to Mines minister Walter Chidhakwa in January requesting for the special grant.
Chidhakwa has not responded to the request.

Government sources said this week Townsend wrote a letter to Chinamasa dated July 6, asking him to intervene as the company believes he has legal power to assist in the matter.

In the letter, the company said the price of gold had increased to about US$1 370 per ounce.

The company said the dam wall had been plastered with gold worth at least US$20 million, which could have been used productively.

The structurally weak dam wall is being fortified to avoid collapse and also to allow it to house new turbines.

“Townsend also argued that the ban on alluvial mining should not affect the company’s application for the special dispensation as it only wanted to separate gold from sand and not to mine. The company said because it did not have the authority to remove the gold from the sand that is delivered to Sino Hydro, the mineral and value were being wasted on the dam wall daily,” said an official.

Government in 2014 banned alluvial mining in river beds, banks, wetlands and any land within 200 metres of naturally defined river banks. This was done through Statutory Instrument 92 of 2014, Environmental Management (Control of Alluvial Mining) Regulations.

Townsend also argued that the broke government, which is desperate for cash, cannot afford to lose additional revenue. The company also highlighted that it does not understand why government is not interested in granting the special dispensation licence considering that it acted in good faith by informing government and seeking permission to extract the gold.

The company delivers 450 tonnes of sand to Sino Hydro daily.

Government sources said Chidhakwa sent a technical team to take samples at the Gache area, but has still not responded to the request.

Laboratory tests showed there were between two and seven grammes of gold per tonne of sand. Platinum was also discovered at the site.

He also sent a team from the Zimbabwe Consolidated Diamond Company (ZCDC) to take more samples. The ZCDC team led by Sebastian Mabenge, a metallurgist, went in and out of the area several times before moving in with equipment.

In May, Chidhakwa told journalists that his ministry had “accidentally” discovered new gold and platinum deposits and had swiftly moved in to ring-fence the area.

Chidhakwa has since said government will soon begin full-scale mining in Gache through the ZCDC, the consolidated diamond mining company which is struggling to mine in Marange.

The wasteful loss of gold, according to sources, is conservatively estimated at three kilogrammes per day.

Government sources told the Zimbabwe Independent that Townsend had initially approached Reserve Bank of Zimbabwe governor John Mangudya in December 2015 after the discovery of the gold. However, the governor advised the company to deal with the Mines ministry.

The central bank is the sole buyer of gold in the country through Fidelity Printers.

One thought on “Ministers stall $20m gold recovery”

  1. marekere says:

    Gold worth millions in the sand! We will reconsider the deal and reissue the sand supply contract to a Chinese company! This will be done with thoroughness and in a very transparent manner.

    Thank you Townsend!

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