Sabi gold deal back on the rails

Africa Moyo
THE Zimbabwe Mining Development Corporation (ZMDC) last week managed to convince Chandiwana Mines, a consortium of local investors in the diaspora, to commit to its undertaking to plough $26,1 million into Sabi Gold Mine after it emerged that the deal could fall through. It is understood that the new investors, who are earmarked to take up a 59 percent stake in Sabi, were put off by ZMDC’s new demand for a 50:50 joint venture in the project.

As a result, they decided to withhold the planned investment.

Chandiwana is a consortium that is made up of mining experts based in the diaspora and locally.

In May this year, Sabi judicial manager Mr Wesley Sibanda of Welsa International Chartered Accountants confirmed to The Sunday Mail Business that the new investor had indeed put the plans on ice.

It has since emerged that the parties held a meeting on Thursday to chart a way forward.

ZMDC public relations manager, Ms Charity Tambandini declined to comment last week for fear of prejudicing negotiations.

Judicial manager, Mr Sibanda however noted that most of the obstacles had been cleared.

“Those (challenges) have now been cleared and we are almost through with the foundation of the plant. Once that is finished there is nothing that can stop us from operating. We have come to an agreement.

“Equipment has so far been paid for because the investor was not willing to pay for the equipment unless he was sure that there wouldn’t be any problems. So he has paid for the equipment. I think as we talk right now (last Wednesday) it must be at Beitbridge,” said Mr Sibanda.

Sabi has been under judicial management for the past two years after it closed in 2011 owing to working capital constraints.

When ZMDC and Chandiwana Mines clashed, plant refurbishment was 80 percent complete.

More than 50 workers have already been engaged and more will be roped in once the refurbishment is completed.

Sabi took a huge hit after the Deputy Sheriff attached mine assets over debts estimated at over $27 million.

Part of the assets that were attached include a 10-tonne AVM lorry, 75-seater buses, plant machinery and malfunctioning heavy vehicles.

Sabi’s claims were first pegged in the 1890s while production started in 1909.

It was acquired by ZMDC in 1984.

ZMDC now owns 100 percent of the mine through Kimberworth Investments (Pvt) Limited.

At its peak, the mine, which has the capacity to treat 450 tonnes of ore per day, employed 450 workers.

Sabi is part of ZMDC’s gold mining portfolios that include Jena Gold Mines in the Midlands Province and Elvington Gold Mine in Mashonaland West.

Elvington and Jena require US$13,4 million and US$18,5 million, respectively, to ramp up production.

Government is targeting to produce 24 tonnes of gold this year from 18,3 tonnes realised last year.

About five tonnes of gold was delivered during the first quarter of the year.