Chronicle Editor
Business Reporter—
Zvishavane-based Sabi Gold Mine will resume operations next month after the Zimbabwe Mining Development Corporation struck an agreement with local investment consortium, Chandiwana Mining Cooperation for a capital injection into the mine.Chandiwana Mining Corporation will invest about $26 million in the gold mine. Chandiwana Mining Corporation is a local investment vehicle owned by Zimbabweans based in the diaspora.
Sabi Gold Mine judicial manager Wesley Sibanda told The Herald Business yesterday that the refurbishment of the mine has already been completed and operations are set for the beginning of 2017.
“We reached an agreement with ZMDC over Sabi Mine and ZMDC has since passed a resolution so that Chandiwana starts mining.
“All refurbishments of the mine have been completed and we will be starting mining on the 1st of January next year. I cannot comment on the structure of the agreement at the moment, but Chandiwana will be starting operations at Sabi Gold Mine next year,” said Mr Wesley Sibanda.
The gold miner has been undergoing renovations after securing funding from the investor. The mine closed down in May 2014 due to shortage of working capital and ballooning debts.
The judicial manager had previously identified seven potential partners, but finally settled for Chandiwana Mining Corporation.
Dr Sibanda said following the investment by the local consortium, the mine will settle its debts that include salary arrears dating back to 2014, which have accumulated to over $2,8 million.
“With the availed funds we are going to clear our salary arrears while at the same time we re-engage the workers.
“We owe our workers a total of $2,8 million and we owe our creditors about $10 million and ZMDC $12 million,” said Dr Sibanda during a mine tour recently.
Sabi Mine needed recapitalisation to the tune of $15 million to increase production capacity to 45 kilogrammes per month while the mine’s break even point stands at 26kg per month.
Sabi gold mine suspended run off mine to pave way for mine development and was downgraded into a project under development with employees sent on unpaid leave.
ZMDC had been facing litigation for the $7,8 million debt owed by Sabi Mine due to its sustained losses.
The Sabi Gold Mine deal is however part of ZMDC’s bigger plan to revive all gold mines within its portfolio. The mining group plans to introduce a phased recovery approach towards the revival of its three gold mines that were either shut down or put under care and maintenance.
ZMDC is also close to securing about $6 million from Fidelity Printers and Refiners and other sources to cater for the recapitalisation of Jena Mine, which remained operational despite challenges affecting the group.
The State-owned mining group is looking at using short, medium and long term phased recovery strategies with the aim to improve efficiencies and ramping up production at the mines.
ZMDC was established by an Act of Parliament in 1982 with the aim to create a vibrant and versatile mining power house to transform Zimbabwe’s mineral wealth to the world class standards.
It wholly owns Jena Mine, Elvington Mine and Sabi Mine currently under judicial management
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