HomeBusiness Digest‘Chidhakwa misled MPs on gold saga’

‘Chidhakwa misled MPs on gold saga’

MINES minister Walter Chidhakwa (pictured) misled parliament in November last year when he alleged that he had engaged Townsend Enterprises on how government and the company were going to prevent the loss of gold worth millions of dollars to the Kariba Dam wall as no such discussions were held, mining executives have revealed.


Gold deposits along Gache-Gache River were discovered last year by a private company, Townsend Enterprises, which had been sub-contracted by the Zimbabwe Power Company (ZPC) to supply sand to Chinese firm Sinohydro for the construction of Kariba South Power Station.

Townsend applied for a special dispensation grant from the Ministry of Mines and Mining Development to recover the gold in the sand used for the Kariba Dam wall construction. Chidhakwa’s ministry however refused to grant the special dispensation, arguing that riverbed mining is exclusively reserved for the state.

It is estimated that the country lost an estimated three kilogrammes of gold per day to the dam wall during the time Townsend Enterprises was operating, costing the country more than US$35 million in potential earnings. The price of gold is currently pegged at US$40 000 per kilogramme.

Discussions are taking place to extend Townsend’s contract to supply sand to Sinohydro for the construction of Kariba South Power Station.

Verbatim recordings from the National Assembly show that Zhombe Member of Parliament Daniel Mackenzie Ncube on November 23 last year questioned Chidhakwa on why government was failing to grant Townsend a special dispensation grant.

“There is a company already extracting sand for the Sinohydro project in Kariba. I understand we are building a golden wall in Kariba. Why can we not allow them to extract gold from that sand which they are taking to the project for the benefit of the country?” asked Ncube.

In his response, Chidhakwa said the decision by government on riverbed mining is that only the state can undertake it.

“The company that is being referred to by the honourable member was allowed to go and extract sand and that decision has not yet been made. We have since discussed and agreed that, that company will only take sand which will have been processed by the concentrators which belong to ZCDC,” the minister said.

“So the way it will work is that ZCDC will extract the ore, it will take out the gold and then it will pass on that to the company so that the construction of the power station will continue.

“We already had a stockpile of sand which had already been processed through the Nelson concentrators and we had established that there was no gold in that particular sand. It is possible that some gold may have been included on the wall but once ZCDC went on the site and put in its concentrators and all the equipment, the sand that they are collecting now goes through our Nelson concentrators.”

However, mining executives close to Townsend said, contrary to Chidhakwa’s claim, the company did not hold discussions with the government. In fact, Townsend was still waiting for Chidhakwa’s response to the numerous letters the company had written to him. Townsend, in the letters seen by the Zimbabwe Independent, began engaging government on the matter in November 2015 and on May 3 last year wrote to Chidhakwa but did not get a response.

The company then wrote another letter to the mines minister on July 22 to remind him that the country was being prejudiced of gold worth millions of dollars. The company pleaded with Chidhakwa for permission to extract gold from the sand it was delivering to Sinohydro.

“I am sure that you will agree that ZCDC will not be able to extract gold from the same sand that Townsend is extracting and washing and then sending to Sinohydro,” reads one of the letters written by Townsend. “Every day that Townsend extracts sand and is not empowered to remove the gold, the country and fiscus lose money.

Don’t you think that granting permission to Townsend to recover the gold and sell it to Fidelity Printers and Refiners will be in the best interests of Zimbabwe?”

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