The country’s biggest gold producer Metallon Corporation could close the How Mine plant in Esigodini rendering thousands of employees jobless in the event it fails to acquire US$10.9 million in forex needed for the commissioning of shaft sinking by the third quarter of next year.
The low grade of gold ore being explored at the mine can be improved by sinking a new shaft to increase the volume being mined.
The crisis facing the gold mining giant follows its failure to commission both the shaft sinking and a mini ramp up this year, and all the programmes have now been scheduled for next year on condition that the required funding has been secured.
If accomplished these initiatives could see gold production at the mine rising from 3 500 ounces to 4 000 ounces per month.
How Mine operations manager Mr Elton Gwatidzo confirmed the latest development saying apart from the US$10.9 million needed for the commissioning of the plant, the mining giant is also advocating for the increase in foreign currency retention incentive by the central bank to 70 percent from the current 30 percent.
“The downsizing of the mine will be done in two phases. In the event we fail to get the funding by first half of next year our capacity utilisation will drop from 80 percent to 50 percent and by the third quarter we will completely shut down,” he said.
Metallon Gold has since put its Mazowe mine under care and maintenance rendering hundreds of its employees jobless.
Deputy Minister of Mines and Mining Development Honourable Polite Kambamura who was on a familiarisation tour at the mine said he will take the issues at the mine to the central bank for urgent attention saying government will not watch another mine closing operations.
“I was saying the other day, Botswana mines only diamond but they have managed to control that diamond and stabilise their economy for the past 30 years or so. So with gold if well managed and well capitalised we will be able to go that route. So we need to support our mines we don’t want to see our mines dying down,” he said.
Big mining companies like this how mine have been overtaken by small scale and artisanal miners in terms of gold deliveries to the Fidelity Printers and Refineries in the past two years.
The recent announcement by the central bank to extend a $100 million loan to capacitate such mines could see them having a breath of fresh air as most of them are on the verge of closing operations.