Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
HARARE, Nov 5 – Zimbabwe will announce in two weeks the successful bidders for assets owned by state-owned mining company ZMDC, including gold mines, the mines minister said on Monday, adding more companies would be put on sale at the end of November.
Selling struggling state-owned companies, known locally as parastatals, is part of President Emmerson Mnangagwa’s wider reforms to cut government expenditure.
Mines Minister Winston Chitando told a parliamentary committee that after announcing winning bidders for its six mines, the Zimbabwe Mining and Development Corporation (ZMDC) would put on sale its remaining 20 assets by the end of this month.
We would like to see each and every asset owned by ZMDC getting into production – Mines Minister
ZMDC will either sell outright, or seek joint ventures, for the mines, most of which are either operating below capacity or under care and maintenance, Chitando said.
London-listed Caledonia Mining Corp, which already operates Blanket mine in southern Zimbabwe, is among the bidders for the two gold mines.
“As government, we would like to see each and every asset owned by ZMDC getting into production,” Chitando said.
Gold is Zimbabwe’s single largest mineral export. Bullion output reached a record 994,726 ounces between January and October this year, compared with 952,397 ounces for the whole of 2017, Chitando said.
Small scale producers, who are paid in cash for their deliveries to a central bank-owned subsidiary, now account for 61 percent of total gold production in Zimbabwe, according ministry of mines data.
Big gold miners, however, say their operations are being hampered by U.S. dollar shortages, which last month forced RioZim to temporarily shut its mines.
(By MacDonald Dzirutwe; Editing by Mark Potter)
