HARARE – Mining conglomerate, Metallon Gold Zimbabwe says it is considering paying mining-equipment suppliers in gold amid indications that cash shortages in the country is hampering the miner’s plans to expand output.

Zimbabwe abandoned its own currency in 2009 because of hyperinflation ad adopted a multicurrency regime but the cash shortages persisted as businesses and individuals moved money offshore in the past two years.

Consequently, the import bill increased after exports collapsed.

According to Chief Executive Officer Mzi Khumalo, the country’s biggest gold miner needs at least $400-million to buy new machinery and upgrade existing equipment as it targets a fourfold increase in production.

In an interview with Bloomberg, Khumalo said, “Metallon has held talks with equipment suppliers in South Africa and Canada, among other countries.

“Zimbabwean law enables the company to convert leases on claims around its four mines into special mining leases that can then be used to secure financing for its equipment purchases.

“We can then enter agreements with banks, various financiers on the basis of gold-backed transactions and suppliers will get their payment in gold,” he said.

Mining is the biggest source of foreign exchange for Zimbabwe, which has the world’s largest platinum reserves after South Africa and also has deposits of chrome and iron ore.

Metallon has four mines, namely How Mine, Shamva Mine, Mazowe Mine and Redwing Mine.

The company produced 77 568 ounces of gold last year and plans to increase that to 550 000 ounces by 2023, after new equipment has been installed.

South African-born Khumalo, who bought the Zimbabwe gold-mining assets of Lonmin to build up Metallon, is the former chairperson of JCI, which was South Africa’s first black-owned mining company before its assets were sold.

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