Namib Minerals to restart mothballed Zimbabwe gold mine in February

Namib Minerals will restart operations at its mothballed Redwing gold mine in February as part of the company’s broader $300 million investment plan in Zimbabwe, its chief executive said on Friday.

Redwing currently has an estimated 2.5 million ounces of gold and is the largest resource base in the group’s Zimbabwean portfolio, which includes the operating How mine that has produced nearly 2 million ounces since 1941.

“Following the completion of technical studies, development work and infrastructure rehabilitation, we are targeting annual gold production of approximately 300,000 ounces from Redwing alone, as part of our broader production strategy across three assets in Zimbabwe,” Namib Minerals CEO Ibrahima Sory Tall said in a statement.

The company said it will also start an exploration program as part of a longer-term plan to double Redwing’s resource base to about 5 million ounces.

Namib Minerals owns three gold mines in Zimbabwe, including another mothballed operation, Mazowe mine, which produced 1.36 million ounces between 1962 and 2018.

Zimbabwe’s gold mines, which have for years faced viability struggles due to currency and policy volatility, are starting to expand output in response to record-high bullion prices.

The southern African country on December 17 reversed plans to double its gold royalty rate to 10% following protests by miners and industry groups. At current gold prices, the gold royalty rate of 5% will continue to apply, only doubling if the price goes above $5,000 an ounce.

Large-scale miners such as Caledonia Mining Plc had warned that a royalty hike would impact profitability and hold back expansion projects.

Caledonia on Friday said it welcomed the royalty rate revision and the scrapping of plans to change the tax treatment of capital expenditure as signs of the government’s support for the mining sector.

(By Chris Takudzwa Muronzi; Editing by Nelson Banya and Sharon Singleton)