Zimbabwe’s largest gold miner Metallon Gold is negotiating a $10-million loan from local and foreign banks to restart operations at its closed mines next month, a state-owned newspaper reported on Wednesday.
The Herald said Metallon hoped to secure the money by the end of this month and would use it to fund operations and re-equip its mines.
A majority of the country’s gold mines shut last year as they struggled with an economic crisis made worse by hyper-inflation, which made the local currency worthless.
”The [Metallon] group is currently engaged in discussions with some lending institutions both local and offshore. We are encouraged by the positive responses we are getting, especially from local financial institutions,” Collen Gura, the company’s chief executive was quoted as saying.
Gura said Metallon planned to immediately resume production at two of its biggest mines — which contribute 66% of output and 95% of cashflow — and planned to reopen the other three later using its own resources.
Zimbabwe’s central bank in February allowed gold producers to sell their own bullion after output slumped by more than 50% in 2008.
Last month London-Listed Mwana Africa Plc chief executive Kalaa Mpinga told Reuters the company planned to reopen a Zimbabwe gold mine within six months after the central bank move allowing producers to sell gold on the world market.
”This allows us to export gold for our own account and be in control of our own destiny. Given this background … Metallon Gold is in its preparatory stages to resume operations,” Gura said.
Metallon’s mines have a capacity to produce 15 000 ounces of gold every month.
Gold contributes one-third to Zimbabwe’s export earnings following the collapse of commercial agriculture after President Robert Mugabe’s seizure of white-owned farms to resettle landless blacks.
At its peak, the country produced 2 400 kg of gold per month. Last year production stood at a record low of 3 072kg. — Reuters