ACACIA’S Buzwagi Gold Mine closure is nearer than expected as gold recovering rate dwindled considerably, hitting hard the revenues of Kahama municipality in Shinyanga Region.
Buzwagi’s Acting Mining Manager, Rod
Burgess, said they pushed back the mine closure to first quarter of 2018
since a tonne of ore produces less than one gram of gold. “We are
currently trying to keep the mine running...by changing some mine
sequence and equipment.
“Our internal plan is trying to recover,
and stay within budget but it might prove difficult, from where we are
to budget,” Mr Burgess told journalists during a one-day tour of the
mine.
The difficult the mine faces is the
ratio of ores to gold produced dropped to one tonne to between 0.6 and
0.8 grams of gold. The sustainability and commercial mining rate is
one-tonne to one gram of gold.
He said initially the mine closure was set to quarter one of next year but managed to extend the period to same quarter 2018.
Buzwagi, which is low grade mine, during
initial exploration, was designed to last up to 15 years from 2007 to
2022 but current situation has brought back the closure date. Mr Burgess
said should the current gold recovery rate continue mining activity
stage to be stopped in less than two years.
“In quarter one [of this year] we were
roughly on budget, [but] we made a loss in quarters two and three...
which had a massive impact on revenue and cash flow,” Mr Burgess said.
The Acacia Q1 financials showed that
gold production of 37,063 ounces, for the months ending March, was 16
per cent lower than some quarter last year. However, lower grade was
partially offset by a 17 per cent increase in throughput as a result of
good mill performance in this year’s Q1.
Buzwagi Sustainability Manager George
Mkanza said they are current exploring three mine closure options but
preferred restoration and maintaining some of the infrastructure such as
water dam, buildings.
“We need some two years for restoration
and turn the mine into a training school,” Mr Mkanza said. The others
options are full restoration and selling the mine to interested buyer.
The mine closure expects to take between five to six years.
The mine total workforce dropped to 773
staff by last year compared to 1084 staff in 2009, plus 500 contractors.
Mr Mkanza said in the first half of this year the mine paid royalty of
over 700m/- to Kahama municipal council and expects at the end of the
year the amount will reach 1.0bn/- since the amount of 0.3 per cent is
calculated from gold sales.
The others impact of the mine closure on
municipal being service levy, community development fund and local
procurement. Local community also expected to be hit hard since
two-third of the staff has rented houses in the municipality.
The municipal water company will also
lose huge revenue as the mine is the major water buyer while 70 per cent
of the NSSF contributions come from Buzwagi.
On Corporate Social Responsibility (CSR)
the mine spends 1.4 billion US dollar annually. Year-to-year the
Buzwagi gold production plummeted from 210,063 ounces in 2014 to 171,172
ounces in 2015.
The mine attributed the significant drop
to stage three stripping. Acacia invested 402 million US dollars as
initial capital and it was not immediately established if they received
their returns on investment.
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