Shabanie Mine de-watering on course

Published: 03 May 2018

A de-watering exercise at former asbestos mining giant, Shabanie and Mashaba Mines Holdings (SMM), is expected to be complete by the first quarter of next year as it seeks to restore underground access to the mines' main working levels, Mines and Mining Development minister Winston Chitando has disclosed.

This comes after the mines' underground shafts were extensively flooded since the company's closure, 10 years ago.

The completion of de-watering of SMM's troubled Shabanie Mine in Zvishavane and King Mine in Mashaba's shafts will result in the two mines resuming production before the end of next year, according to Chitando.

"There is de-watering happening at King Mine in Mashava which is expected to be complete by December this year," Chitando said.

"After that, the next stage is the de-watering of Shabanie Mine and the exercise should be complete by first quarter of next year," he added.

Government has been seeking investors to
resuscitate the two mines but several investors that had shown interest in the business were put off by the quantum of bailout cash required to resuscitate the mines.

It is understood that equipment worth millions of dollars has been trapped underground by rising water levels making it inoperative.

This is made worse by the fact that the mines now have antiquated technologies which may require upgrading.

Now, government targets to first open Gaths Mine, which is still shallow and cheaper to resuscitate.

Shabanie Mine runs for about a kilometre into the ground and requires a much bigger chunk of capital to revive. Gaths Mine is about 700 metres from the surface.

At one time SMM was the world's sixth largest asbestos producer with an annual output exceeding 140 000 tonnes.

But the miner has been plagued by legacy issues, including a dispute over ownership pitting government and dispossessed former shareholder,
Mutumwa Mawere.

Mawere lost control of SMM in 2004 after government accused him of pillaging the company's coffers to pay for his shares previously held by Turner and Newall plc.

He has denied these allegations, insisting his payment for shares was above board and not prejudicial to any stakeholder.

The expropriation of Mawere's shareholding in SMM was done using a controversial law that allows the State to take over assets of businesses deemed to be insolvent and incapable of servicing debts owed to State entities.

Government appointed AMG Global Chartered Accountants' partner Arafas Gwarazimba to administer operations until the two mines became viable.

He did not succeed in turning around the company's fortunes.

In fact, the takeover of the company by the State marked the deterioration of the company's fortunes.

A Parliamentary committee recommended a few years ago that government should restore Mawere's ownership of SMM to enable the mines to reopen.

But this has not happened.

A United Kingdom court ruled that Mawere's Africa Resources Limited had legitimate title to the mining firm after the government-appointed curator took the dispute to the United Kingdom.

At its peak, SMM employed about 7 000 workers.

SMM closed in 2008, four years after government's take-over of the company.

- The Financial Gazette

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