Martin Kadzere Senior Business Reporter
WONDER Bay Company, a local mining firm, has received approval to open a medium sized gold mine in Hope Fountain, about 85 kilometres north of Bulawayo at a cost of US$30 million. WBC is controlled by Zimbabweans with 57 percent shareholding while South Africans own the remainder.
Greenland Syndicate (the local partner in the project) owns 42 percent stake while 10 and five percent equity have been allocated to community and employees respectively.
Caratrom of South Africa, a company with strong links with West Lake Safaris Estates holds another 42 percent while one, Jakobus Grange owns one percent.
According to sources, the project is expected to commence during the first half of this year.
“The investment would be staggered in three phases with US$5 million expected to be injected in the first year, about US$8 million in the second year and US$16 million in the third year.
“The project, to be located in Hope Fountain under Bulawayo mining district seems to be taking shape and if all things go well, it will be up and running during the first half of the year,” the source said. “There are no issues with the indigenisation authorities as the shareholding structure is in line with the required empowerment thresholds.
“It will be a fairly big project that has potential to create close to 150 permanent jobs.”
Zimbabwe is targeting to become one of the top five gold producing countries in Africa within the next three years, according to Finance Minister Patrick Chinamasa.
Minister Chinamasa said Government would implement various strategies to boost gold output. “Our intention is to reorganise the gold sector. We want to become one of the top five if not top four gold producing countries on the continent in the coming three years,” he said.
Minister Chinamasa said legalising the operations of gold panners was also crucial if the country was to realise a substantial increase in gold output. Zimbabwe has over 20 000 gold panners whose output, if properly accounted for, would significantly increase the country’s gold output. The Chamber of Mines of Zimbabwe has said that gold production could reach 50 tonnes in the next five years.
But this is dependent on the gold sector securing about US$1 billion in fresh capital and the availability of reliable power supplies.
Zimbabwe’s gold sector is slowly recovering after declining sharply in the last decade.
Gold output reached an all-time low of three tonnes in 2008 having peaked at 27 tonnes in 1999.
In 2012, gold production was 14 tonnes, earning the country US$1,9 billion. Production figures for last year are yet to be released but the country had set 17 tonnes as target for 2013.
The target is unlikely to be achieved as declining prices prompted most gold miners to cut production.
Global gold fell 28 percent last year, notching up its biggest annual decline in 32 years as prospects for global economic recovery prompted investors to switch to riskier assets.
Gold prices reached to all-time highs of US$1 920,30 an ounce in September 2011 but ended at US$1 201,13 per ounce on Tuesday last week, the last day of 2013.