Maravi

30 Zim gold mines face closure

30 Zim gold mines face closure
By Kingsley Kaswende in Harare
Thursday July 05, 2007 [04:01]

UP to 30 gold mines in Zimbabwe are faced with imminent closure because they have run out of cyanide, a critical chemical in the production of the mineral, the Chamber of Mines of Zimbabwe (CMZ) has disclosed. “Already, one or two mines have stopped production. I won’t give you the names but there are one or two others that are about to stop until they are given what they require,” said Doug Verden, the CMZ acting chief executive officer, in an interview.

Verden said the Reserve Bank of Zimbabwe (RBZ) had not been able to pay out around US $200 million of what it owes the gold mines, making it impossible for them to procure the critical chemical.

“As a system, we lodge our gold with the RBZ after production. The RBZ takes 40 per cent of the foreign currency we earn, through which we are paid in foreign currency. The other 60 per cent should be paid within a specific period of time as foreign currency. In recent times this hasn’t happened. The 60 per cent hasn’t been paid to the mines, for some from as far back as November 2006. The 60 per cent that has not been paid is needed by the mines to purchase cyanide,” he said.

He said the Chamber had been following up on a regular basis with the RBZ and the Ministry of Mines to find a solution.
“It would seem the Reserve Bank does not have enough foreign currency,” he said.

Verden said several gold mines had completely run out of cyanide and most of them had cut down production quite severely. “Unless they are paid some more of their foreign currency, things will be worse, companies will most likely close,” he said. He said gold production had been falling quite dramatically due to that reason.

All the cyanide that the mining companies need has to be imported from the far East. “The companies are not being paid and all cyanide has got to be imported. You can get it locally and pay in local currency but it is hugely expensive. Those who sell it locally have to import it using foreign currency and they sell it to the mines at a higher mark up so that in the end it becomes cheap to sell your cyanide than to produce gold,” Verden said.

Gold production has fallen by about a 40 per cent. Last year, gold mines produced about 13 tonnes of gold, and Verden said they would be lucky to produce eight tonnes this year.

Labels: GOLD MINES, ZIMBABWE

posted by MrK @ 5:39 PM