Metallon downsizes operations

METALLON Corporation (Metallon), Zimbabwe’s biggest gold miner, says it has down-sized operations in line with foreign currency shortages in the country.
This comes as the viability of local mining companies has come under threat following the central bank’s failure to avail adequate foreign currency to the sector.
Ranga Mberi, Metallon’s public relations officer, told The Financial Gazette last week that the group’s operations were not immune to current challenges faced across the industry, “particularly in the delay of payments for gold deliveries and foreign currency shortages for securing key inputs”.
“Pending resolution, and as a temporary measure, some staff have regrettably been sent on leave to manage costs, while the mine continues operations,” he said.
The company’s operations in Zimbabwe comprise four separate underground gold mines, How, Shamva, Redwing and Mazowe. Each of the mines is serviced by its own dedicated processing facilities and accompanying infrastructure.
It also has “significant exploration potential at all the mining operations”, most of which it says are the “subject of active and on-going exploration”.
Because its processes are heavily dependent on foreign currency, the mining industry has been particularly hit hard by the current shortages.
The central bank’s undertaking to allow gold producers to maintain only 55 percent of their export earnings in foreign currency has not helped the situation either. Miners insist that this is not enough.
Still, the government has not been able to follow up on these commitments. Two weeks ago, RioZim announced the suspension of production at its three mines for the second time in four months citing the central bank’s failure to avail foreign currency.
The apex bank however claims that the miner was paid its dues after the shutdown.
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