Monday, September 20, 2021

Bikita Minerals plans mass lay-offs as lockdown bites

The burrowing aardvark is Bikita Minerals’ emblem

…tantalite production stopped

TellZim Reporter

Bikita Minerals is offering many of its workers retrenchment packages as the lithium producer
takes a heavy battering from coronavirus-induced market turbulence and the
country’s macro-economic instability, TellZim has learnt.
The company operates a
15km2 mining lease area, producing mainly lithium-bearing petalite
for export mostly to China, sustaining hundreds of workers directly and
hundreds more people through downstream industries.
On a smaller scale, Bikita Minerals also processes tantalite from rocks known as lepidolite, but
the company says it has decided to suspend this operation for such reasons as
the processing plant’s size and efficiency that the company says are too
limited to continue running it profitably.
Lithium and its
compounds have many industrial applications including production of heat
resistant ceramics, lithium lubricants, lithium batteries and lithium-ion
However, the global
market has faced immense disruption as a result of the worldwide lockdown which
has affected at least a third of the global population in recent months.
Commodity prices have
plummeted in light of depressed demand from major economies and significant
industry players like Australia, China and Germany.
In a statement released
in March, the company lamented that ‘prevailing macro-economic challenges, a
dip in the price of certain lithium-based ores, and a global health scare have
had a knock-on effect on the performance of Bikita Minerals as sales volumes
have gone down by nearly 50 percent in 2020.’
But even before the
coronavirus outbreak, the company had been taking a battering from the
country’s debilitating economic crisis, having to run costly massive diesel
generators for prolonged periods of electricity load-shedding regimes.
There is palpable fear
that any further disruption of operations at Bikita Minerals, which is one of
the three major employers in Masvingo province, would have far-reaching
economic implications. Despite its precarious financial situation, the company
has maintained an impressive level of social responsibility – donating $50 000
to the Masvingo Covid-19 Provincial Taskforce in April.
Close sources say so
far, the company has already terminated short-term contracts for hundreds of employees
while those on full-time contracts have been advised to take the voluntary
retrenchment offers that the company has reportedly dangled to ensure a safer
landing for them should things go for a head as is expected.
Bikita Minerals general
manager David Mwanza, when asked if it was true that the company planned mass
lay-offs, could only say it was partly true without elaborating.
He referred further
questions to the company’s Harare-based public relations manager Precious
Chitapi who, in e-mailed responses to TellZim News, said the company was only planning to
retire those that have reached the age of 60.
Bikita Minerals is not closing. The mine is not laying-off its employees. Only the over 60
are retiring with due notice at the end of June 2020.
The market is waking up slowly
from the Covid-19 lockdown.
Just to keep you
informed, Bikita Minerals is still selling stones. We have customers buying in
the normal way, but it is in small batches because of the market condition in
the world. We are also milling products for a few customers that was prepaid,”
she said.
However, in
the March statement, the company admits that it could only ‘minimise job
losses’, adding that many workers on contract had already been affected.
“The mine currently has
about 250 permanent employees, 300 contract workers and 500 contractors. Over
the past two months, the number of contractors has been shrunk significantly,
an exercise which will be supplemented by normal attrition and a moratorium on
the hiring of new staff,” reads part of the statement.
Other sources that
spoke on condition of anonymity said the miner was likely to either look for
fresh foreign capital, which would not be easy post-lockdown considering the
country’s unattractive risk premium in the eyes of investors, or dispose of its
“As would be expected
anywhere, the company is putting up a brave face but things are not OK. All
monthly contracts have been stopped but the final position will only be clear
after lockdown. As of now, only essential maintenance staff members are on
standby. The company’s options are few, that is if there are any,” said one
Other sources said
there were still significant mineral deposits in the company’s lease area to
merit new investment and expansion, but diminished activity in the world
economy coupled with unstable fundamentals in the local economy was making it
extremely difficult to sustain current operations.

TellZim News is the leading news organization in the Southern region. It provides candid, balanced and timely news from the communities. Keeping it real. Committed to tell Zimbabwe.

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