Mining giant Metallon Corporation faces collapse
Metallon Corporation, founded and chaired by South African mining tycoon Mzi Khumalo, is on the brink of collapse amid indications that over 1,400 of its workers are owed salaries and other benefits amounting to $40 million.
In Zimbabwe, the company operates four gold mines namely How Mine, Redwing Mine, Mazowe Mine and Shamva Mine.
Mzi Khumalo’s mining empire in Zimbabwe is on the brink of collapse and the 64-year-old is said to be looking for a way out.
Khumalo has put two of his mining operations in Zimbabwe under business rescue to protect equipment and other assets from creditors.
Mazowe and Shamva mines filed for business rescue last week as Mazowe and his company, Metallon Corporation, struggled to remain afloat.
Metallon said it remained hopeful that “with the partnership and support of the Ministry of Mines and Mining Development, our previously stated plans for future expansion” can be successful.
Metallon is indebted to the tune of $200m. The company also faces a court case in which it is alleged to have unlawfully sent more than $30m to the UK, claiming it was for the payment of dividends and management fees.
The Associated Mine Workers Union of Zimbabwe says about 1,400 workers at the mines are owed $40m in salaries, benefits and unremitted pensions.
A spokesperson for Metallon said that once the situation in Zimbabwe changed the company would be keen to “re-establish gold mining operations and continue to repay creditors”.
Three of Metallon’s four gold mines are currently in mothballs.
The gold mining industry is one of Zimbabwe’s projected growth areas. Foreign suppliers are now limiting advances of equipment and other imported raw materials as a result of delays in receiving payments.
The miners’ plight has been worsened by demands for wage increases, with mine workers and employers agreeing to an 80 percent salary hike for mine employees for 2018.