Tinashe Makichi Business Reporter
Zimbabwe’s biggest gold producer Metallon Gold Corporation’s problems have deepened amid revelations the group has gone for months without paying creditors and employees of some of its mines.
The Herald Business gathered this week that the group, which owns five gold mines in Zimbabwe has been producing, but the majority of the proceeds were allegedly being shipped out of the country.
The gold mining group is currently facing charges of externalising over $30 million through false dividends paid to shareholders, without profits to back them, and fictitious external loan payments.
Metallon Gold Zimbabwe’s current stable includes How Mine, Shamva Mine, Mazowe Mine, Redwing Mine and Arcturus Mine (currently mothballed) making it’s the country’s largest gold miner.
The gold mining giant produced a total of 94 212 ounces of the precious metal last year, with the group’s output constituting approximately 25 percent of Zimbabwe’s total production that year.
A source said this week that the gold miner was facing huge challenges that have resulted in it failing to pay salaries for its employees and meeting obligations of some of its units’ critical supplier creditors.
“It is quite mind-boggling that such a big mining group is struggling to the extent of failing to honour its salary and creditor obligations.
“At Mazowe mine, which has an average production of 12 060 ounces, employees have gone for months getting half salaries and sometimes nothing yet the group has been producing.
“Looking at Mazowe the group has even set up a new state of the art $18 million Sands Retreatment Plant,” said the source privy to goings on.
“Creditors have also been on the tail of the mining group and the allocation of funds in the group have been shredded in secrecy,” the source added.
Contacted for comment, Metallon had not responded to questions sent by email by the time of going to print.
South African based politician and Metallon chairman Mzi Khumalo has come under spotlight on the state of affairs at the mine, as he is among those accused of siphoning funds from the gold mining group. Mr Khumalo founded Metallon in 2001 after purchasing the Zimbabwean assets from Lonmin in 2002.
He has held the position of chairman at various South African firms including JCI Limited, Capital Alliance Holdings Limited and Point Waterfront Corporation, as well as having been non-executive director at Mintek, Telkom, McCarthy Retail Limited, Ridge Mining and Anglo American Corporation.
A creditor who requested anonymity told this publication that Metallon Zimbabwe used to be one of the best paying debtors, but that there had been shift in recent times, which is now worrying them.
The group’s gold production is expected to be approximately 115 000 ounces in 2017. This year Metallon’s focus has been on the completion of Mazowe Processing Plant and the Mazowe and Shamva tailings Facilities.