Harare, Zimbabwe — MININGREVIEW.COM — 07 November 2008 – Several Zimbabwean gold mines – among them Metallon Gold, the largest gold producer in the country with four mines – have ceased operations as a result of inadequate capital.
The Herald Business News confirms that Metallon’s mines have ceased production, and that the company had been hit by a massive turnover of key staff after failing to pay salaries for the past two months.
This follows a Bloomberg News report earlier this week quoting the Zimbabwean Chamber of Mines as saying that most gold mines in the country are unable to operate at this stage because the Central Bank of Zimbabwe has not paid them for deliveries of the metal.
According to latest reports, Metallon’s Redwing Mine in Chimanimani has been invaded by illegal gold panners. An official with the Chamber of Mines said authorities had been informed about what he called “the sad development.”
“Things are really bad,” said a Chamber official who was not willing to be named. “Some gold mines have closed operations because they do not have enough working capital.”
Metallon chief executive Collin Gura confirmed that production at his company was at a standstill. “We have stopped production. We cannot carry on because we do not have revenue,” he said.
Last week, the Chamber of Mines indicated that the central bank owed miners over US$30 million (R300 million) that had accumulated since March this year. No comment could be obtained from the government..
Gura – whose company controls over 55% of the country’s gold industry – said he was optimistic that a solution would be found quickly to restore sanity in the sector.
Economists say developments in the mining industry, which in recent years has been the country’s major foreign currency earner, will worsen the performance of the economy. Gold contributes 35% of Zimbabwe’s foreign currency earnings.