BULAWAYO Mining Company (BMC) Private Limited, a subsidiary of Metallon Corporation Group needs about $11 million to complete its expansion projects at its How Mine operations as it moves to ramp up its gold production, which has experienced a drastic slump over the past few years.

In an interview, BMC operations manager, Mr Elton Gwatidzo said How Mine’s production capacity had dropped owing to a myriad of challenges ranging from use of obsolete machinery and lack of adequate capital to purchase strategic consumables.

“In terms of production we are producing at over 80 percent of capacity, which means we do have under-utilised capacity due to various reasons to do with procurement of consumables, our aged equipment, which requires replacement and obviously the (ore) grade, which has dropped with the depth as we progressed over the years. So those are the major challenges we are faced with in our production profile but we are producing at over 80 percent of our capacity and we do have quite a considerable capacity to go back to 100 percent and even ramp it up to above 100 percent through projects that we have identified,” he said.

Mr Gwatidzo said the mine was pinning hopes of improving its production capacity upon commissioning its mini ramp project.

“We do have the mini expansion ramp up project, which initially is meant to bridge the gap between the drop in (gold ore) grade that we have experienced, which has resulted in us producing below 4 000 ounces per month. So we will be going back to 4 000 ounces per month upon commissioning of this project,” he said.

Mr Gwatidzo said commissioning of the mini ramp up project has been hampered by prevailing foreign currency shortages in the country.

“This (mini ramp up) project has had its problems in terms of funding due to forex shortages from the market, from the first quarter of 2018. What we have done so far is that we have approached our authorities and we are glad that we have been allocated the 30 percent although it has been overtaken by events on the market where people are now pricing above normal pricing and so we are lobbying the RBZ (Reserve Bank of Zimbabwe) through our chamber of miners and Gold Mining Producers Association to get that allocation reviewed to above 70 percent,” he said.

Work on the mini ramp project is already underway and was supposed to be commissioned in August at a total cost of $3 million while another project, the sinking of a new shaft to increase the volume being mined was supposed to be commissioned in September. The shaft sinking project requires over $5 million with the entire modernisation and re-engineering of the mine’s operations estimated to cost $10,9 million.

“The shaft sinking, which enables the continuity of the mine requires $5,3 million and we have expended part of the money and we are in need of excess of $4 million to commission it without stopping this mine from operating and then we have got the insurance spares component which is sitting at around $5,6 million,” said Mr Gwatidzo.

He said commissioning of the two projects was now expected next year.

“We are now looking at commissioning in the second quarter of 2019, which is the shaft sinking project then the mini ramp up project we will commission it in the third quarter going into the fourth quarter of 2019 because already we are saying we do have a gap in terms of the capital funding on that front,” said Mr Gwatidzo.

He said the company was in talks with Fidelity Printers and Refiners to access funding through a loan facility that would be extended to large scale gold miners. Mr Gwatidzo also noted that the mine’s operations were also affected by erratic power supplies.

“Zesa needs to recapitalise their equipment. Zesa requires two transformers that can cater for our needs in terms of our 33 kVA (kilo-volt-ampere) grid. They have hooked a lot of customers in that grid and that has reduced the amount of power that they supply to the mine so what they need is to invest in a bigger transformer at Springs Sub-station that will enable us to have enough capacity in terms of power,” he said.

BMC was forced to embark on a labour rationalisation two months ago, which saw about 60 workers being laid off as part of its efforts to reduce costs, increase productivity, and ensure the long-term viability of the company.

“We identified redundant positions so that we create space in terms of the cost structure of the company, this was in an effort to keep the mine running at a profitable level that was acceptable to enable us to then eventually invest in capital projects that can enable us to expand. We have plans to expand our production to 100 000 per month, that requires huge capital and it starts with us managing our current costs and creating that space,” said Mr Gwatidzo.

The company’s staff complement stands at 953 employees, including contractors. The group trimmed its workforce across its business units, which also includes Mazowe, Shamva and Redwing mines as part of its efforts to contain costs.

- Sunday News