Econedra Limited, the Development Trust of Zimbabwe’s partner in diversified miner DTZ-OGEO, says it remains frustrated by Government delays to show them alternative investment options after the firm was forced out of two major mining projects it was involved in.
Econedra said it was looking at other investment opportunities, but was agitated by the lengthy time it has taken for Government to show them the way. Recent reports said the company was considering exiting Zimbabwe after being pushed out of its diamond and gold projects in Manicaland.
DTZ-OZGEO is a joint-venture mining firm established in 1994 and jointly owned by Development Trust of Zimbabwe, which was established by the late Vice-President Joshua Nkomo and Russian company Econedra.
The company’s operations were mothballed following the closure of its alluvial gold mining operations in 2013 by the Environmental Management Agency. Two years later its diamond operations were affected by the consolidation of all diamond mining activities by Government.
Well-placed sources at DTZ-OZGEO told The Herald Business that the Russian company’s investments in mining had proven to be a challenge.
“DTZ and Government have been in discussions, where the company is now looking for other investment opportunities, but the company has been unhappy with regards to reaching a conclusive position on the matter,” said the source.
Following suspension of DTZ-OZGEO’s Penhalonga operations by EMA, close to 500 workers were made redundant and the company lost average production of between 20 to 30 kilograms of gold per month.
The company also allegedly lost about $21 million it had invested in gold. Econedra has previously made unsuccessful efforts to engage Parliament for help in reversing EMA’s decision to close down its operations.
Following its appearance before Parliament, Government published in the Gazette, Statutory Instrument 92 of 2014 regulation of alluvial mining which was final blow to the company’s hope resuming operations.
The SI cited the illegality of all alluvial mining operations in the country. DTZ-OZGEO in adherence to EMA directive had rehabilitated 101 hectares of land although 22-hectares were still to be recovered.
Government said it would compensate the company through a $5,4 million payment to take over the diamond mining company’s concession. DTZ-OZGEO signed a memorandum of understanding with Government after talks involving the Russian investors in the company and officials from the Mines and Mining Development Ministry.