BioMetallurgical chases $400m mining projects

AFTER claiming years of politically-motivated attacks from former President Robert Mugabe’s regime, which hampered mining operations, the BioMetallurgical Group is now pursuing $400 million worth of mining projects.

By Blessed Mhlanga

The projects will be pursued at the Chaka and Globe and Phoenix Mines in Kwekwe and at the Empress Mine as part of major mine redevelopments. According to BioMetallurgical, the projects are expected to create around 10 000 permanent jobs. To that effect, engagements with Mines and Mining Development minister Winston Chitando have been ongoing for the group to have government support in its mining endeavors.

NewsDay reporter Blessed Mhlanga (ND) sat down with the BioMetallurgical Group managing director Lee W John (LWJ) recently to find out what are his company’s plans under the new dispensation.

ND: Can you outline to me, to what extent are you exposed to Zimbabwean business?

LWJ: My only business and home and place of residency is Zimbabwe and 100% of my investments are in Zimbabwe and I consider myself Zimbabwean, everything is here.

ND: What businesses do you run in Zimbabwe?

LWJ: My businesses include a company which is called Zimbabwe Nickel Exploration Company, which owns the Empress Nickel Mine between Kadoma and Gokwe and we are looking at re-opening that. It was closed in 1983 and no one has been able to come up with the technology or the means to reopen it because it is a very low-grade mine, but we are in the process of gaining national project status and I am in communication with the minister (Winston Chitando) on this and its looking positive.

I also have two gold mining companies Kwekwe Consolidated Gold Mines (KCGM) and Homestade Mining and Technical Services. Both own mining claims within and around Kwekwe and we have very big claims there as well. KCGM was mostly jambanjad (taken forcefully) from me at the end of 2012 to 2015 and that was a battle in the courts. We won every case in the courts but due to the political interference by the G40 faction, we just got delayed and basically it was a very good case of justice delayed and justice denied.

At the same time, I faced trumped up criminal charges. It took me through the courts and prison for two-and-half years, but the Zimbabwe court system prevailed in the end and I was acquitted. And, these were good results from the court but very slow, tiring and personally difficult.

So we are looking at reopening KCGM, the mines that were jambanjad by ‘you know who’, and they were greatly vandalised, so we need millions of dollars to fix that vandalism and millions more to expand. But, we are in the process of organising the finances and plans are in place to reopen a chunk of the plant hopefully by the end of this year. The surrounding mines can create up to 1 000 jobs initially.

ND: You talk about political interference in your business, why do you want to invest millions more, do you now feel safe?

LWJ: We feel very safe now. I think the new President (Emmerson Mnangagwa) is doing a fine job, we are very happy with what he is doing so far. There are a lot of forces working against him, so we have to recognise the challenges he is facing. I am very confident with what he is trying to do for the country.

ND: Let’s talk about gold mine concerns, how many people did you employ before the mine was taken?

LWJ: We had 1 450 employees and we were producing about 80kg to 100 kg of gold per month, so we were quite big. We were doing okay, we were not making huge profits, but we were managing to employ a lot of people and any profits we made were being reinvested into Kwekwe.

ND: How much did you lose following the ‘jambanja’ and what are you doing to ensure that after winning this court process you recover?

LWJ: An estimated $20 million to $25 million in lost production and vandalised equipment. You know what, I would rather put the money in employing more people and picking up the pieces and get on with life. It was a total disaster, but I don’t think there is a point in spending money on lawyers and courts to try to pursue that case.

ND: Can you tell us how much do you need to revive the gold concern and how are you sourcing it?

LWJ: We have appointed Grant Thornton as our financial advisors. They are currently coming up with different options to come up with about $15 million as the first phase of our re-investment indirectly, and that phase will generate a lot of jobs and get the production going. Then, we will look at phase 2 and 3, which is the major redevelopment of the underground mines.

ND: There are illegal gold miners who have gone on to vandalise the underground mine tunnels, do you still see this as a viable project?

LWJ: Luckily they are only accessing the upper levels, the lower levels are protected by the water so one of the major things we need to address and I am speaking to the minister about this, is security of the area.

There is rampart illegal mining going on, particularly in the upper levels, which is dangerous as it will see the tunnels collapsing. It will get worse if the illegal miners are not stopped. It is a major issue but it is not going to affect our bigger plans which are going much deeper in the mine.

ND: Have you done any exploration work to ensure that reviving the mine would still give you the 80kg of gold a month you spoke about?

LWJ: So we are looking at around 600kg to 650kg a month, maybe 800kg if we do exploration. The 650 kg is based on historical records because all the deposits that we have been mining towards are too deep to drill from surface, so the only way we can explore is by getting into the mine deep and explore from there.

So we are basing a lot of our resources from the records of some of the minerals dating back from 50 years that we still have.

ND: You have been labelled Australian, are you not anticipating these problems again, I understand at some point you were deported from Zimbabwe?

LWJ: I was deported. This was also a big challenge because a lot of people were occupying the mine at the time.

It was a difficult time because as I said I consider myself Zimbabwean, though I have an Australian background. But, the rest of that is behind me, my only home is Zimbabwe. In the past 15 years I have been there (Australia) less than five times.

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