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Munyaradzi Musiiwa, Midlands Correspondent
SABI Gold Mine in Zvishavane will this month resume operations following the completion of a deal between a Zimbabwe Mining Development Corporation (ZMDC) and a local investor, Chandiwana Mining Co-operation.
Chandiwana Mining Co-operation has already injected $26 million into Sabi Gold which ceased operations more than two years ago.
The deal was stalled in April this year after ZMDC questioned the method which was used by the judicial manager in selecting the investors and negotiating the deal.
Operations were supposed to resume in June this year.
Mines and Mining Development Deputy Minister Fred Moyo confirmed in April that there were other grey arrears that needed to be dealt with before operations resume at the mine.
There were disagreements between ZMDC and Sabi in terms of the modalities and approach in terms of how the mine was going to be run.
Deputy Minister Moyo said the agreement had not been fully approved by the Government in terms of cash flows and the model but the management went on to resume operations.
He, however, said the challenges were minor and would not stall the resumption of operations at the mine.
“These are not major challenges. It is a two-fold in that the model that was used by ZMDC and judicial manager. I raised questions because I felt the cash flows were not properly distributed,” he said.
Sabi judicial manager Dr Wesley Sibanda confirmed that operations would resume in mid-August once they receive some consumables.
He said the mine was undergoing renovations after securing funding from the investor.
“We are waiting for consumables and we are looking forward to resume mining activities by mid-August. Very soon we will be operating,” he said.
Dr Sibanda said Sabi and ZMDC had formed a joint venture with Chandiwana Mining which has secured funding from foreign investors.
“A local investor has organised its funds from the diaspora and it is going to avail a maximum of $26,1 million to cover debt and equity. The mine closed down in May 2014 due to shortage of working capital and the mine was also debt ridden. Our plant also broke down and we had no money to repair it. We then started looking for potential investors to form a joint venture and inject capital so that we cover our debts as well as repairing the plant.
“We identified seven potential partners and we finally settled for one investor. We sat down with ZMDC, the Master of High Court and the judicial manager and agreed to form a joint venture with the investor,” he said.
Dr Sibanda said the mine will settle its debts that also include workers’ salary arrears dating back to 2014 which had accumulated to $2,8 million.
“With the availed funds we are going to clear our salary arrears while at the same time we will re-engage the workers in phases. We owe our workers a total of $2,8 million and we owe our creditors about $10 million and ZMDC $12 million,” he said.
Dr Sibanda said the mine was now being vandalised by artisanal miners who were trespassing into the mine and blasting into the shafts damaging the pillars and other infrastructure.
He said the mine would also re-engage its workers.
“We are anticipating starting engaging only 100 when we resume operations. We will, however, engage the rest as time goes on,” he said.
Sabi Gold Mine used to produce about 50 kilogrammes of gold per month with a total workforce of 420.
derick.khumalo