eBusiness Weekly
Martin Kadzere
Landela Mining Venture is on the verge of taking over Metallon Corporation’s Shamva Gold Mine as it moves towards gaining a greater control of Zimbabwe’s mining assets.
Ownership of Landela has largely remained a secret, but business tycoon Kudakwashe Tagwirei, who has vast business interests in fuel and energy sectors, is linked to the investment vehicle.
The impending deal comes at a time Government has just announced closed gold mines will be designated as Special Economic Zones.
Tagwirei has consistently denied any links to Landela.
The latest development comes after mid-tier Canadian miner B2Gold dismissed reports it was considering buying Metallon’s Shamva and Mazowe, saying it was not — for now — interested in any mergers or acquisitions.
Earlier reports had indicated B2Gold would bid for the two mines if it was to be exempted from a law that require producers to sell gold to Fidelity Printers and Refiners, an arm of the Reserve Bank of Zimbabwe.
Landela chief executive David Brown told Business Weekly in a telephone interview on Wednesday that he was hoping the deal would be concluded “in the short term”.
“We are working with rescue business practitioners to take over Shamva Gold Mine and we are hopeful that this will be concluded in the short term,” said Brown, former chief executive of Impala Platinum Mine, a significant shareholder in Zimbabwe Platinum Mines.
“We would want to bring back the mine and create employment.”
Metallon Corporation owns four gold mines in Zimbabwe namely Mazowe and Shamva, which are currently under administration. The other mines are How and Redwing.
Mazowe and Shamva mines were placed under the administration after the High Court granted an application by Associated Mines Workers’ Union of Zimbabwe for a reconstruction order. Reggie Saruchera of Grant Thornton was appointed the interim corporate rescue administrator of the two mines while Dr Cecil Madondo of Tudor Consultancy was also appointed the assistant administrator.
Sources told Business Weekly that apart from Shamva gold mine, Landela was angling to buy all other mines owned by Metallon.
“While negotiations for Shamva Mine seem to be at an advanced stage, Landela is also interested in all other Metallon mines,” said one source who requested not to be named for professional reasons. However, Brown has maintained that “at this stage its only Shamva gold mine”.
Of late, Landela has been buying mining various assets in platinum, nickel and chrome sectors.
The company is now a significant shareholder in the Zimbabwe Stock Exchange listed Bindura Nickel Corporation, Great Dyke Investments, which in building a platinum mine expected to become the country’s largest ahead of Zimplats, Mimosa and Unki as well as ZimAlloys, which owns smelters and significant chrome reserves.
Earlier, a local consortium, Vara Mining made a bid for Mazowe and Shamva gold mine and had indicated plans to invest as US$120 million over three ytears towards expansion. Vara Mining comprises a team of local entrepreneurs and business executives with extensive knowledge, experience and expertise in mining and related services.
The consortium had already secured offshore funding with the objective to sweat both assets to optimal returns premised on expansion at both Mazowe and Shamva to achieve economies of scale mainly by developing near surface resources to augment underground operations and introducing industry best practices across the value chain.
Metallon used to the country’s largest gold miner, accounting for more that 50 percent of output.
The company, founded in 2002 when Mzi Khumalo, one of most recognizable businessman in South Africa acquired Lomnin’s Zimbabwean gold mining assets for US$16 million.
The mines owe tens of millions of dollars to some of its service creditors including the Zimbabwe Electricity and Distribution Company, which last year took Metallon to courts over $9,3 million debt.
