Shamva Gold Mine has reopened after Landela Mining Venture acquired and injected fresh capital into the business, previously owned by Metallon Corporation.
“We are almost one month into production and we are now focusing on growth,” Landela chief executive Mr David Brown said yesterday.
Metallon suspended operations at three of its mines including Shamva and Mazowe last year due to mounting debts estimated at US$200 million. The Associated Mine Workers Union of Zimbabwe applied for the reconstruction order of the two mines while Mr Reggie Saruchena of Grant Thornton was appointed the interim corporate rescue administrator. Dr Cecil Madondo of Tudor Consultants was also appointed to deputise him for purposes of rescuing the two mines.
Mr Brown said Landela was also working on improving production at Freda Rebecca in Bindura while the acquisition of Mazowe Gold Mines was close to finalisation.
“The major drawback for Freda is Covid-19 but we are working on trying to improve production. What we will basically do is to inject capital to maintain production and then to expand operations,” said Mr Brown, a former chief executive of Implats.
Landela has been buying mining various assets in platinum, nickel and chrome sectors.
The company is now a significant shareholder in the Zimbabwe Stock Exchang-listed Bindura Nickel Corporation, Great Dyke Investments, which is building a platinum mine expected to become the country’s largest ahead of Zimplats, Mimosa and Unki as well as ZimAlloys, which owns smelters and significant chrome reserves.
Earlier, a local consortium, Vara Mining, made a bid for Mazowe and Shamva mines and had indicated plans to invest as US$120 million over three years towards expansion.
The consortium had already secured offshore funding with the objective to sweat both assets to optimal returns premised on expansion at both Mazowe and Shamva to achieve economies of scale mainly by developing near surface resources to augment underground operations and introducing industry best practices across the value chain.
Metallon used to be the country’s largest gold miner, accounting for more that 50 percent of output. The company, founded in 2002 when Mr Mzi Khumalo, one of most recognisable businessman in South Africa, acquired Lomnin’s Zimbabwean gold mining assets for US$16 million.
Government is banking on mining and agriculture as proving impetus to stimulate economic resuscitation.