The government took over SMM from business tycoon Mutumwa Mawere in 2004 and appointed an administrator under the Reconstruction Act, but failed to keep the operation going.
The transfer means that the Ministry of Mines and Mining Development will now oversee the reconstruction of the embattled mining firm by addressing operational challenges and identifying potential investors.
The investment arm of the Ministry of Mines and Mining Development, the Zimbabwe Mining Development Corporation (ZMDC) is expected to play a leading role in recapitalising SMM Holdings.
Emerging from a meeting with SMM Holdings Administrator, Mr. Afaras Gwaradzimba, Mines and Mining Development Minister, Obert Mpofu said his Ministry has since assigned the ZMDC to quickly address issues affecting the asbestos mining company, adding that close co-operation will continue with the Justice Ministry.
“The Ministry of Justice (and Legal Affairs) has now handed over the organisation (SMM) to the Ministry of Mines to address and manage through perhaps the identification of potential investors towards its full reconstruction. Representatives from ZMDC and the administrator himself seemed confident about the success of this project which I think was long overdue. We are now going to do our best to ensure SMM is back in operation,” said Mpofu.
The Ministry recently undertook a physical tour of SMM to assess the physical state of the project where it was noted that workers have not received salaries for over two years and the operation is facing power challenges due to debts owed to Zesa Holdings.
Mawere, the self-exiled businessman has for years been trying to reclaim SMM which was seized from him when he fled the country after police wanted to arrest him for allegedly externalising funds.
His company was subsequently put under curatorship and the businessman specified.
He was recently despecified, but Justice minister Patrick Chinamasa quickly warned that if Mawere dared step foot in Zimbabwe, he would be arrested and charged.
Senior Zanu PF and government officials linked to the Mawere empire-grab have failed to run the company and unless huge capital investment came in, the mine would become history despite its high-quality asbestos deposits.
SMM still has 17 years of proven asbestos resources underground.
Finance director of the mine, Brusel Chirashi, said the mine was capable of producing over 70 million tonnes of fibre this year, but there was just no working capital. Shabanie is reputably one of the best asbestos producers in Africa. It has its major markets in the United States of America, Britain, Angola, Nigeria, Zambia, Mozambique, India, Iran, United Arab Emirates, China, Indonesia and other countries.
But in 2009, the mine recorded a loss of $18,6 million. This manifested itself in the accumulation of bills owed to employees, creditors and equipment that can no longer be serviced.
Shabanie produces arguably the best chrysolite fibre in the world and has a current urgent order of 200 000 tonnes of the fibre which it is sitting on because it is producing nothing.
The 200 000-tonne order could rack in $105 million, enough to resurrect Shabanie, sources said.
Chirashi said their customers were willing to take the fibre at any cost.
He said India was in a position to give lines of credit to the mine, but no bank was willing to discount credit advanced.