ZMDC set to undergo major restructuring

The Zimbabwe Mining Development Corporation (ZMDC) is set to undergo major restructuring amid revelations government has engaged a top German mining consulting group — DMT GmbH & Co. KG — to evaluate its governance, systems and quantify how much funding the state-run entity needs in fresh capital.

By Chris Muronzi

Sources this week told businessdigest that DMT GmbH & Co. KG, an independent engineering and consulting company, has been engaged to lead the turnaround of the poorly run government mining group.

DMT GmbH & Co. KG specialises in natural resources exploration, mining, coke-making technology, construction and infrastructure, product testing and building safety as well as industrial testing and measuring technology.

According to the sources, the German-based group will undertake a comprehensive assessment of the ZMDC’s governance, technical operating systems, processes and procedures to determine the possible quantified and time-bound interventions needed to get the group running again.

A team of technical experts from Britain and Germany is expected in the country on Sunday.

The appointment of DMT GmbH & Co. KG is widely seen as current Mines minister Winston Chitando, a former executive chairman of Mimosa Mining Company, efforts to return the group to profitability and enable the shareholder to extract value from the investment after years of mismanagement , corruption and looting.

Chitando is widely seen as a credible business leader and efficient minister. Before his appointment, he was leading the turnaround of yet another troubled mining group, Hwange Colliery Company as chairman. Hwange is now under reconstruction due to financial problems.

ZMDC’s performance and record is disastrous. Sanyati Mine was closed in 1999 due to metallurgical challenges. Sabi Gold Mine was under judicial management, while Sandawana Mine, an emerald mine, was closed in 2012 owing to depressed emerald prices at the time.

Only its Kamativi Tin Mine was set to resume operations after an investor committed to allocate US$1 million for working capital.

Another operation, Elvington Mine, was closed in 2003 after a shaft collapsed.

The ZMDC holds approximately 26 000 hectares of platinum claims in the Hartley and Shurugwi areas of the Great Dyke. It has entered into joint-venture agreements with international companies for exploration and resource estimations, but nothing much has materialised.

Its other ventures like the joint-venture with Graphitwerk Kropffmuhs to form Zimbabwe German Graphite Mine (ZGGM) (Pvt) Ltd, which mines graphite in Karoi and Sandawana emerald mine were said to be struggling a few years ago.

Among some of the companies the group has equity in are Todal Mining Platinum, Shin Zim, Platinum Platinum, Ruschrome Platinum, Global Platinum Resources Platinum, Afri –Sino Mining Resources Uranium, ZiGGM t/a Lynx Mine Graphite, Marange Resources (diamonds), Kimberworth Investments t/a Sabi Gold, Jena Mine, Mineral Development t/a Elvington Gold Gold, Sandawana Mine, Kamativi Tin Mine, Mhangura Copper Mine, SMM Holdings (Pvt) (asbestos), Sanyati Copper Mine, Lomagundi Smelting (copper).

The group also had interests in diamond operations Mbada Diamonds, Diamond Mining Corporation, Jinan Mining, GyeNyame Resources, Kusena Diamonds, Anjin Mining Investments, and Rera Diamonds.

The DMT group operates from 30 offices worldwide. According to the company’s website, DMT has to date completed several thousand projects in over 150 countries, working in over 25 countries in a typical year.

In the full-year to December 2017, the company reported a turnover of €105,3 million (US$119,2 million).