Biti calls for urgent action on Shabanie

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Finance minister Tendai Biti has called for urgent action to save Shabanie Mashaba Mines Holdings which has literally collapsed due to lack of capitalisation, poor management and corruption that have dogged the asbestos producer since it was seized from its owner, self-exiled businessman Mutumwa Mawere in 2004.
Biti said in his Mid-Term Budget Review statement yesterday that asbestos was the only mineral that had experienced a slump in production in the past half decade. All other minerals, he said, had seen increased production.
“We need to save the mine in the south of the country and resolve the legal issues associated with SMM Holdings,” Biti said.
He said communities were not benefitting anything from the country’s mineral resources.
“Similarly, communities have not been able to see anything developmental out of the resources extracted from their habitats,” Biti said. Business halted at SMM Holdings in 2005 when the mine failed to sustain its operations. By 2008 the situation got worse with electricity being disconnected because the mine could not pay the power supply utility.
In his statement, Biti said excessive power cuts had disrupted production at many mines.
“In mining, productivity in the sector continues to be hamstrung by erratic power supply. This has meant that mining houses have not been able to sustain increased production even in cases where they have had limited access to lines of credit in support of recapitalisation,” Biti said.
For almost two years now, Shabanie-Mashaba Mines has been unable to pay its workers, who told a visiting parliamentary committee on Mines and Energy in May that they were now living in abject poverty – unable even to pay school fees for their children.
Shabanie produces arguably the best chrysolite fibre in the world and has a capacity to continue mining that resource for 17 years.