Zimbabwean authorities now want the country to regain its status as a leading producer through re-opening the two mines, following a fallout between the government and the mines’ major shareholder.
The country will resume asbestos mining before the end of the year through recapitalising the two mines that ceased operations for almost a decade, despite the global anti-asbestos lobby which has seen at least 55 countries banning the product.
Zimbabwean authorities claim they have secured domestic and international markets for asbestos in Asia.
The two mines, Shabanie and Mashava in southern Zimbabwe, once the sixth largest asbestos mines in the world in terms of production, are set to be re-opened following a capital injection as part of a $100million loan from the Chinese company XCMG.
The company has given the Zimbabwean government the loan to acquire mining equipment and to recapitalise the two mines, Mines and Mining Development Minister Walter Chidhakwa has said.
“We have secured domestic and international markets for asbestos,” he said. “We are going to sell our products to Russia, India and Kazakhstan before the end of the year. The two mines only require about $20m to be recapitalised and we are going to utilise the loan facility to start production.”
The re-opening of the two mines will create about 100000 jobs and generate desperately needed foreign currency for the country. “We need to refurbish the mining plant in addition to buying new equipment as part of the recapitalisation process,” said Chidhakwa.
Since the closure of the mines, Zimbabwe has had to fill in the gap through imports.
According to experts, the country currently spends about $5m annually to import asbestos.
“We are now importing asbestos and for the past four years we have spent $22m. This money could have gone to our own local industry,” said John Jere, managing director of asbestos-user Turnal Zimbabwe Private Ltd.
Zimbabwe mines chrysotile asbestos fibre, which is scientifically not harmful if used responsibly.
The mines were closed in 2006 after the government ejected major shareholder Mutumwa Mawere, accusing him of accumulating a lot of debt. About 300000 people lost their jobs.
During their peak the two mines produced 140000 tons, annually raking in an average of $40min foreign currency.
The government seized the two mines from Mawere under a controversial reconstruction law which allows the state to take business entities deemed to be insolvent.
Former workers at the mines had already appealed to Finance Minister Patrick Chinamasa for payment of their outstanding salaries amid reports that some of them had never received a cent when the mines were closed.
The workers appealed to Chinamasa to obtain funding for the two mines to resume operations, which might result in them being paid their outstanding salaries. The workers also wanted the government to allow the exiled businessman Mawere to come back and play a part towards the revival of the once prosperous mines.
According to a study by the Institute of Civil Justice, by the year 2005 the number of asbestos lawsuits were almost a million with more than 1000 companies being defendants. The total compensation demanded then exceeded $300billion.
Health experts and many scientists claim chrysotile asbestos is a major agent of cancer and other fatal diseases because of its fibre which can be inhaled and sticks to lung linings.
Zimbabwe used to export asbestos to 50 countries in the world and also used to be one of the largest producers of white asbestos after Russia, China and Brazil.
Despite the anti-asbestos lobby, Chidhakwa believes there is still a market for the product in Zimbabwe and Asia. “We have established a market for 50000 tons of the product per year in India and another 10000 for local use by Turnal Zimbabwe Private Limited, ” he said.
The Zimbabwe Chamber of Mines says the country’s struggling mining sector requires about $5bn to be fully recapitalised.
Several mines in the country have either shut down or scaled down operations due to viability problems because of high operating costs.