Storm brews over Kariba gold deposits

A CLASH is brewing between the Zimbabwe Consolidated Diamond Company (ZCDC) and Townsend Enterprises over the extraction of gold at the Gache-Gache area where gold deposits worth millions of US dollars were discovered by the latter as it has emerged that the state-owned concern is gradually forcing out the private company.

Townsend Enterprises was last year sub-contracted by the Zimbabwe Power Company (ZPC) to supply sand to Chinese firm Sino Hydro for the construction of Kariba South Power Station from a concession on the Gache River owned by Chapungu Safaris.

The company then discovered gold deposits on the sand and informed Mines minister Walter Chidhakwa through a letter requesting for a special grant which was never responded to.

Sources close to the developments told the Zimbabwe Independent this week that Townsend Enterprises is gradually being forced out of its allocated site by ZCDC which has fully commissioned its equipment for the extraction of the gold.

"Government instead of issuing a special dispensation grant to Townsend Enterprises, commissioned ZCDC equipment at the Gache-Gache area and will soon start extracting gold in the area which Townsend was also allocated," the source said.

Townsend delivers 450 tonnes of sand to Sino Hydro daily.

ZCDC first deployed equipment in Gache-Gache on May 23 2016 and set up camp and a plant for gold extraction.

"Townsend has since last year been seeking for the special dispensation of the extraction of gold to save millions of dollars being lost to the dam wall, the company has engaged government numerous times and even the office of the President several times but has been ignored," the source said.

"The private company is gradually being forced out of the Gache-Gache area to make way for ZCDC."

ZCDC, according to sources, will be interfering with Townsend's contractual responsibilities which are to excavate, wash and deliver sand to Sino Hydro.

Sources told this paper that the district ddministrator of Kariba and the chief executive officer of Nyaminyami Rural District Council instructed Townsend and its sister company Chapungu Safaris to assist ZCDC.

Townsend, according to the sources, argues that the country has lost gold to the dam wall worth to US$25 million in the last eight months due to government's refusal to grant it a special dispensation grant.

The wasteful loss of gold, according to sources, is conservatively estimated at three kilogrammes per day.

Mines deputy minister Fred Moyo on Wednesday this week told parliament that ZCDC will extract gold on the alluvial sands at Gache-Gache.

"The Gache-Gache project has to do with gold recovery on the alluvial sands, in that area there may well be deposits of diamonds but there were never accessed, we never said they were at a minable level and the project at the moment is specifically directed at extracting gold at that area, one source said."

Government sources told the Independent that Townsend had initially approached Reserve Bank of Zimbabwe governor John Mangudya in December 2015 after the discovery of the gold. However, the governor advised the company to deal with the Mines ministry.

The central bank is the sole buyer of gold in the country through Fidelity Printers.