Gold & Silver Forum - Zimbabwe's gold mining industry continues to decline, Lay off even more workers

Pan African Mining and Freda Rebecca lay off 800 as Zimbabwe's gold mining sector bleeds employees.
As Zimbabwe's gold mining industry continues to decline, two gold mining companies plan to lay off even more workers.

Author: Tawanda Karombo
Posted: Monday , 02 Jul 2007

Harare -

About 40,000 mine workers have deserted Zimbabwe's mines over the past 10 years and now Zimbabwe gold producers, Pan African Mining and Freda Rebecca, are planning to lay off a combined 800 mine workers due to the government's failure to pay for gold deliveries to the central bank.

Chamber of Mines president, Jack Murehwa, told a conference in Harare that the closure of mines combined with the slump in minerals output had scared away skilled workers and investors alike.

The country's mining sector, which employed around 75,000 people a decade ago, currently only supports about 35,000 employees.

"There has been a skills flight. Best skills are leaving and most operations are now manned by second rate managers," he added.

"It is a sad outlook and nobody can blame these people for their quest for a (better) life," he said.

Gold and other mining products are still Zimbabwe's major hard currency earners but the mining sector has been hamstrung by foreign exchange shortages, which have prevented it from buying new equipment and supplies. Gold output is this year expected to fall by 23 percent to about 8,700kg from 11,354kg last year, due to operational problems, according to the Zimbabwe Chamber of Mines

Workers have been leaving Zimbabwe in droves and most of them are destined for South Africa, Mozambique and Zambia where the investment climate is conducive for expansion and attractive remuneration.

As confirmation of fears that Zimbabwe's gold mining sector is on the verge of collapse, about 600 workers are set to lose their jobs at Pan African Mining (PAM)'s Ayrshire gold Mine.

The PAM board recently held an emergency meeting at its South African Headquarters over operational constraints being faced by the Ayrshire Mine. Such constraints are believed to have been occasioned by the late payment for gold deliveries to Fidelity Printers and Refineries, a subsidiary of the Reserve Bank of Zimbabwe (RBZ).

A memo to Ayrshire workers warned employees of impending retrenchments.

"No payment has been received from the Reserve Bank of Zimbabwe and the (local official) gold price has remained at uneconomic levels," the memo said.

The PAM board had convened in Johannesburg and decided that all employees who were not required for the care and maintenance of mining equipment or who could not be transferred to PAM's other mine - Muriel - would be "placed on paid leave".

Freda Rebecca gold mine also revealed that it was planning to lay off 180 workers after scaling down operations. David Murangari, the managing director of Bindura Nickel Corporation (BNC), a subsidiary of London-listed Mwana Africa Plc, said the Freda gold mine was facing operational problems related to equipment failure. BNC is in the same stable as Freda Rebecca, also owned by Mwana Africa. He said the gold mine, which employs 564 workers, is currently running one mill instead of two.

http://www.mineweb.com/mineweb/view/...2845&sn=Detail