RioZim shuts down Renco gold mine

One of Zimbabwe's largest gold mines has been shut down reportedly due to non-payment for its gold bu the country's Reserve Bank

HARARE - 

RioZim, one of Zimbabwe's major mining companies has reportedly shut down operations at its Renco gold mine, one of the country's largest producers, said to be owing to the failure by the Reserve Bank of Zimbabwe to pay for gold deliveries.

"Renco mine ceased operations Thursday and they are no-longer operational as the mine cannot sustain its operations," said an impeccable source who declined to be named.

Other sources who were contacted by Mineweb confirmed the development, saying the Reserve Bank of Zimbabwe had failed to pay for gold remittances, a development that has "about 400 workers employed by RioZim at the Renco gold mine" losing their jobs.

The closure of the Renco gold mine was also confirmed by representatives at the country's mine workers union.

"We are concerned that some of our members have lost their jobs at the Renco mine owing to a sad development in our mining sector," said a senior legal representative officer for mine workers.

He said the association could embark on demonstrations to force the central bank to pay for the gold remittances.

No official confirmation could be obtained from RioZim officials by the time of writing this article.

The development comes as reports indicated that Zimbabwe's gold mining sector had suffered losses amounting US$448.5 million in last year due to a slump in production which was worsened by low support prices and electricity shortages.
Zimbabwe only managed to produce seven tonnes of gold last year, which earned US$155, 5 million. At its peak, the country produced as much as 27 tonnes!

Renco mine produced total gold output of 277 kilogrammes for last year's second quarter, a significant decline as compared to 372 kilogrammes for the same period in 2006.

In a statement to shareholders last month, RioZim said its production targets had been hampered by an unreliable operating environment.

"...for the group to realize its full potential given the strong international metal prices requires an enabling local economic environment," the statement noted, adding that prospects for a brighter future lay "in the hands of the country's policy makers".

Under Zimbabwe's regulations, mining companies are not allowed to sell their gold output to any other agent except the country's central bank.

President of the Zimbabwe chamber of mines, Jack Murehwa said the fixed rate made illegal gold trading lucrative and "attractive as the mines get more from the parallel market that from the reserve bank".

Unofficial mining industry statistics indicate that Zimbabwe could have lost up-to US$150 million through illegal exports of gold in the first six months of this year.

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Related Links ARTILCES:  RioZim may close gold mine and put diamond project on hold  Gold glitters for RioZim  Zimbabwe gold sector prospects for recovery hamstrung  OTHER PAGES:  GOLD NEWS AFRICA

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