The government has urged large scale mining company Metallon Corporation to manage its assets in a bid to expedite access to loan facilities to boost productivity.
As efforts to maximise mining industry productivity intensify, government has challenged Metallon Gold to apply various recapitalisation measures and manage their assets to expedite government efforts towards the mine’s access to loans for recapitalisation.
Addressing Shamva Mine management, Deputy Minister of Mines and Mining Development Cde Polite Kambamura said the mining sector is on an expansion drive, hence government will look into the plight of Shamva Mine to ensure that requisite funds are availed to retain the productivity levels which are collapsing.
“Our main thrust in the transformation and stabilisation programme is to ensure that new mines are opened and existing one are expanded. We will talk to authorities to look at retention percentages….the issue of small scale miners being given 1.5 million, I think it should be the case with large scale operators given the status of our economy, but they need to be given loans not grants, recapacitate,” said Cde Kambamura.
Earlier, Shamva Managing Director Mr Thomas Lusiyano had said milled gold tonnage had drastically taken a nose dive due to the adverse economic environment, hence the need for quick financial injection to rescue operations.
“Our processing plant is producing 40 percent of our budget in terms of ounces of gold and that’s a sad state of affairs because it’s a fixed cost which is killing us,” said Mr Lusiyano.
Shamva Gold Mine is producing 23kg of gold per month whereas its capacity is 85kg which can cascade to 120kg.
An injection of $5 million is needed to revamp the mine towards normal to above productivity levels.
The government is targeting production of 100 – 120 tonnes of gold per annum and increasing the revenue from $2.6 billion to $4 billion by 2023.
Metallon Corporation has applied for a loan facility of $18 million through RBZ for its four mines which include Shamva Gold Mine, Mazowe Gold Mine, How Mine and Redwing.
The current disparity between the US dollar and the bond has not helped matters as the mine imports spares for their equipment.
However, the monetary policy made strides to address the anomaly through allocating 30 percent payment in forex to the gold production sector.