Toronto, Canada — 02 September 2013 – Some 900 workers at Dalny mine near Kadoma in Zimbabwe have been sent home on unpaid leave after the mine was shut down with its parent company “’ Toronto-listed New Dawn Mining “’ blaming the lack of progress in its indigenisation programme, as well as power supply problems.
The company has warned that it is uncertain about the continued viability of its other operations in the country which include Old Nic and Turk-Angelus mines in the Matabeleland regions as well as the Camperdown and Golden Quarry mines in the Midlands, reports allAfrica.com. The junior gold miner also owns 85% of Venice mine near Kadoma.
In making this announcement at the end of last week, New Dawn blamed a dip in gold prices and power supply problems with the Zimbabwe Electricity Supply Authority (ZESA), as well as the country’s indigenisation programme.
The mine would remain under care and maintenance until the company managed to “satisfactorily address the financial and operational issues that contributed to its shutdown, or until a potential sale, joint venture or some other arrangement is realised.
“The substantial fall in the price of gold over the last nine months, exacerbated by the impact of previously reported operational problems at the mine, has resulted in a serious liquidity problem,” the company said.
“As a result, the amounts owing to ZESA in respect of the Dalny Mine operations were not being paid on a basis acceptable to ZESA, thus causing ZESA to issue a notice of disconnection of electrical services to the mine. Without electrical power, the company cannot operate the mine and was thus forced to shut-down Dalny mine operations.
New Dawn said the mine’s operational obligations, including the ZESA debt, had increased to US$3 million, adding that a “steadily increasing payroll, high domestic royalties, taxes and other fees” had also worsened the situation.
The firm also blamed delays in reaching an agreement with the government over its indigenisation compliance plan for the problems at Dalny mine adding that uncertainty over the issue was also adversely impacting other group operations.
“A major underlying factor contributing to the Dalny mine’s current difficulties has been the more than two year delay in the still incomplete approval process for the company’s proposed Plan of Indigenisation,” New Dawn said.
“A timely approval of the plan had been expected to provide the company with access to sufficient investment capital to fully fund the development of a cost efficient operation at the Dalny Mine.”
Source: allAfrica.com. For more information, click here.