Zimbabwe: 5000 Lose Mining Jobs As RBZ Fails to Make Gold Payments

“Daily updated mining exploration news on gold”—–Zimbabwe’s largest gold mining exploration firm has stopped operations at its five mines across the country, resulting in 5,000 people losing their jobs and officials laying the blame squarely at the door of the Central Bank.

The Reserve Bank of Zimbabwe (RBZ) has recently come under severe scrutiny after international donor group, Global Fund, announced that more than US$7 million in donations had been diverted by the central bank for other purposes. The group suspended future grants to Zimbabwe until the money was repaid, a move which immediately saw the central bank come up with the millions that were repaid on Friday.

But the bank will now have to answer for the closure of Metallon Gold’s five mines, after officials said this week’s closure resulted from long delays receiving payments for gold delivered to the RBZ.

“We have no mine which is operating at the moment,” Metallon Gold’s CEO Collen Gura said on Thursday. “We cannot continue to produce when we are not getting paid, so there are no operations at any of our mines across the country.”

Metallon Gold, which produces 40 percent of the country’s gold output, is owned by South African mining mogul Mzi Khumalo. According to the Chamber of Mines, Zimbabwe’s gold production plunged by 61 percent in March, compared to February this year, while the country’s average monthly gold production has declined from more than two thousand kilograms in 1999 to a mere 267kgs this year. Gold has traditionally been one of Zimbabwe’s main foreign currency earners, but the mining sector has been crippled in recent months by power cuts, shortages of foreign currency and the exodus of experienced personnel.

At the same time Zimbabwe’s central bank apparently owes gold producers US$30 million, dating back to end of 2007.

“The failure by the RBZ to pay for gold delivered to it has decimated the entire gold industry,” the Chamber of Mines said in a statement released Thursday.

Political analyst Professor John Makumbe from the University of Zimbabwe on Friday said the country’s central bank “has a lot to answer for and be held accountable to.” Makumbe said the mine closures are a serious threat for the country’s future “not just because of the loss of jobs but also because of the devastating effect this will have on the already fragile economy.”

Makumbe also argued that the mine closures mean that rebuilding the country will take even longer, because of the time and money needed to reopen mines.

“The Mugabe regime can ignore the crisis as they are doing,” Makumbe said. “But at the end of the day it will be many years to come before Zimbabwe can be repaired.”