Theft threatens viability of Manicaland gold producer
CHINESE gold producer Ming Chang Sino Africa’s operations in Odzi, Manicaland Province, have been frustrated by significant losses due to theft with a recent audit revealing that over 10 000 litres of diesel meant for business operations could not be accounted for since commencement of operations in May this year.
The company currently employs 41 local staff permanently while another 80 are part-time. Management expressed disquiet over the criminal misconduct saying this had potential to hamper viability and growth of the business.
Ming Chang Sino Africa, currently developing the mine on vast mineral claims with its local partners, had to report the matter to the law enforcement authorities leading to an investigation that unearthed an elaborate pilferage scheme that management feared may have cost the company 10 000l of diesel.
At least three employees resigned earlier in September during police investigations while others simply went AWOL when they got wind that the net was fast closing in on the culprits.
Mine director Liu Xiaolong told The Herald Business and Finance that the culprits drained diesel from excavators, trucks and two on-site fuel storage tanks whose combined capacity is 50 000l.
“More than 1 000 litres was stolen every month and this puts us to at least 6 000 litres and maybe it can even reach 10 000l,” Mr Liu said during a tour of the mine.
“It took an internal audit which looked at the traditional use of fuel using similar new trucks for the same kind of work. We looked at log books and found serious discrepancies. For example, excavators which used to be 25l per hour on peak have now reached 40l per hour. At the same time, our average fuel consumption per hour is plus or minus 20l yet it has shot to at least 25l per hour. We investigated and caught some workers draining fuel which is then sold to small-scale gold miners in the area,” Xialong said.
He said investigations by the police confirmed that fuel was being stolen and action has since been taken to address the anomalies.
After disciplinary proceedings against the suspected culprits and tightening of internal controls, consumption for the excavators declined significantly to between 16 and 18 litres per hour.
“Some suspects remain on the mine because we could not catch everyone involved or prove allegations, but the new system is working,” he said.
Mr Xialong said the company has 16 gold claims and it is currently working on one of them
“Indications are that these are very good deposits and the mine life is quite long. We are prepared to invest millions of US dollars on this project, but I can’t give you the specific numbers at this stage,” he said.
Currently, the company is using open cast mining.
In phase two of the project, the mine hopes to employ 60 more permanently and the combined figure could double as the project grows with targets to hit 300 employee minimum.