Sabi set to reopen

04 Dec, 2016 - 00:12 0 Views
Sabi set to reopen

The Sunday Mail

Africa Moyo —
SABI Gold Mine is on the cusp of resuming operations following a five year hiatus after the Zimbabwe Mining Development Corporation (ZMDC) closed ranks with the investor, Chandiwana Mining Corporation, and thrashed a 51/49 percent shareholding structure in favour of the former.

Disagreements between ZMDC and Chandiwana over the shareholding structure — which had initially seen Chandiwana getting a 59 percent stake and 41 percent for ZMDC – almost scuppered the deal, with the investor allegedly withholding funds in protest.

Chandiwana Mines is a consortium of 5 000 Zimbabwean mining experts based in the Diaspora and locally, which agreed to plough US$26,1 million into the revival of Sabi Gold Mine, a key contributor to economic development. ZMDC owns 100 percent of Kimberworth Investments (Pvt) Limited which trades as Sabi Gold Mine.

Last week, Sabi judicial manager Mr Wesley Sibanda of Welsa International Chartered Accountants, told The Sunday Mail Business that an agreement has been struck, which will see ZMDC getting a controlling 51 percent stake while Chandiwana pockets 49 percent.

“It’s a done deal. We (ZMDC and Chandiwana Mines) have agreed on everything. We agreed on 49 percent for Chandiwana and 51 percent for ZMDC.

“Currently, we have finished all the refurbishments at the mine — both underground and plant. What we are now waiting for is a letter from the Minister of Mines and Mining Development (Mr Walter Chidhakwa) before we start operating,” said Mr Sibanda.

ZMDC is understood to have asked for a letter from Government as a form of consenting to the deal since Sabi is a national asset. Minister Chidhakwa’s mobile could not be reached last week to establish when he would write the letter.

Chandiwana had entered into a deal with ZMDC that would have seen it investing US$26,1 million into the revival of Sabi. Some of the funds have been used to acquire equipment, all of which is “now at the mine”.

Mr Sibanda said once the letter from Minister Chidhakwa is obtained, mining operations would commence immediately, with underground mining.

“We agreed that we will start with underground mining and they (Chandiwana) put in US$5 million for that and the rest of the requirements will be borrowed and we will be able to pay back,” said Mr Sibanda. In May, Sabi had already co-opted 50 employees and expectations were high that once the plant refurbishment has been concluded, more employees would be engaged on a phased basis.

At its peak, Sabi can employ up to 450 people and used to significantly contribute, not only to the Zvishavane economy, but also to the national economy.

The mine has a capacity to treat 450 tonnes of ore per day. Once operations resume, Zvishavane residents will get more employment opportunities. Currently, Mimosa Mine, Pote Investments and the Midlands State University are the biggest employers.

Sabi has been under judicial management since 2014 after halting operations in 2011 due to working capital constraints.

Its operations took a knock when most of its machinery was attached by the Deputy Sheriff over liabilities estimated at over $27 million against assets worth US$11,6 million, making the company technically insolvent.

The mine’s claims were first pegged in the 1890s and production resumed in 1909. Sabi was acquired by ZMDC in 1984. ZMDC also wholly owns several mines including Jena Gold Mines which is based in Silobela, Midlands province and Elvington Gold Mine based in Chegutu.

Elvington Mine suspended operations in 2003 due to the collapse of one of its main shafts. There are frantic efforts by ZMDC to revive its other mines, at a time Government is pinning hopes on gold mining in light of the falling prices for other minerals such as platinum and diamonds.

Government has set at target of 24 tonnes of gold this year and 17,3 tonnes were delivered to Fidelity Printers and Refiners (FPR) between January and October 31, 2016.

Gold exports are expected to generate about US$1,1 billion this year, representing a 32 percent rise from last year’s haul. ZMDC is in the market looking for US$6 million to recapitalise Jena Mine, as part of measures to improve productivity.

Government recently sacked ZMDC’s former head honchos; general manager Mr Sydney Simango, chief operating officer Mr Caesar Mashumba and finance director Mr Wilson Chinzou, for allegedly running down the key parastatal.

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