HomeGoldZimbabwe faces mining sector collapse

Zimbabwe faces mining sector collapse

Production of gold
like this is almost
at a standstill
in Zimbabwe
Harare, Zimbabwe — MININGREVIEW.COM — 14 November 2008 – The troubled mining sector in Zimbabwe is facing possible collapse, as gold mines start to dispose of equipment to meet operational costs and monthly wage bills which they cannot pay because of non-payment of over US$30 million R300 million) owed to the mines by the country’s Reserve Bank.

Revealing this in a report from the Zimbabwean capital, allAfrica.com quotes “The Zimbabwe Independent” as saying that Metallon Gold, which produces 50% of the country’s gold, has closed five mines – Redwing mine, Shamva gold mine, How mine, Arcturus mine and Mazowe mine – due to failure by the bank to pay for gold deliveries.

The Chamber of Mines has also warned that more gold producers could face the same fate if the Reserve Bank delays payment for deliveries made two years ago, or fails to import critical raw materials from South Africa by the end of next week.

The Chamber said the sector, which was one of the biggest gold producers in Africa less than 10 years ago, was on the brink of collapse with several mines unable to sustain operations, or pay wages and salaries.

Some gold firms had not been paid a single cent for deliveries for a whole year, according to the mines body. Most mines have gone for three months without paying employees.

The Chamber labelled the Reserve Bank’s non-payment for gold “a travesty of justice” and said exploration work had completely ceased, while most underground mines had flooded, because they did not have the funds to pump out water seeping from shafts.