October 14, 2004 Posted to the web October 14, 2004
Chris Muronzi Harare
NEGOTIATIONS between the Zimbabwe Mining Development Corporation (ZMDC) and Gecamines of the Democratic Republic of the Congo (DRC) aimed at resuscitating smelter operations at the collapsed Mhangura Copper Mines (MCM) have gone off the rails.
Officials at the state-controlled ZMDC, who were locked in negotiations with Gecamines earlier this year, have indicated to The Financial Gazette that the talks collapsed amid revelations that Gecamines was also failing to satisfy its own operational requirements.
ZMDC owns MCM, which shut down operations in 2000 due to a plethora of operational and cash flow-related problems. Low prices for copper on the world market further compounded the once-lucrative mine's woes.
The closure of the mine put the copper refinery and smelting plant, whose major business is treating copper ore fines, out of business.
Domnic Mubayiwa, ZMDC chief executive, indicated that the company was also locked in talks with other entities with the same view of utilising the smelter, which has been lying idle for three years.
"We have been talking with Gecamines but we are worried with the mine's ability to satisfy the Mhangura smelter capacity with concentrates, considering that it is failing to satisfy its own capacity. In light of this we are looking elsewhere for those who can satisfy the capacity of the smelter," said Mubayiwa.
He added that the mining group is talking to international companies in its bid to rescue the smelter.
"There are agents who have approached us with intentions to provide capacity matching concentrates from various destinations. We are waiting to see if they can provide reasonable proof to these claims," added Mubayiwa.
Sources in the sector indicated that a number of companies both on the local and international front have cast covetous glances at the smelter, still in efficient working order, with intentions of snapping it up.
Early this year, ZMDC indicated that plans were underway to buy concentrates from the DRC, Zambia and South Africa but have since abandoned such initiatives.
MCM owes substantial amounts of money to various creditors among them Finhold, the Zimbabwe Revenue Authority (Zimra), the National Railways of Zimbabwe and TelOne.
Before its closure, MCM was dually listed on the Johannesburg Stock Exchange and the Zimbabwe Stock Exchange.
The company was founded in 1954.
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