ZIMBABWE’s sole graphite producer Lynx Mine has sought bankruptcy protection, five years after the Zimbabwe Mining Development Corporation (ZMDC)-controlled operation hit turbulence as international graphite prices plummeted.
The 56-year-old firm, formerly a joint venture between the ZMDC and Graphite Kropfmühl GmbH of Germany, at one point scoured the markets courting lenders to inject about US$5 million to fund plant upgrades and mining equipment acquisitions.
Lynx Mine’s reserves were expected to last for two decades when it was still operating.
As the crisis deepened, the Germans hived off their 50% shareholding in September 2017 to mark the end of their 50 years of graphite mining in Zimbabwe.
“Fruitful cooperation is no longer possible,” Graphite Kropfmühl’s MD at the time was quoted saying in the German media after giving up.
About 260 workers were stranded.
Last week, top corporate rescuer practitioner Cecil Madondo said he had been given the role to save Lynx from February 17.
“Notice is hereby given that with effect from 17th February 2021, Zimbabwe Graphite Mines Private Limited t/a Lynx Mine …was place under corporate rescue in terms of the Insolvency Act,” Madondo said on Friday.
“During the corporate rescue proceedings, no legal proceedings, including enforcement action against the company or in relation to any property belonging to the company, or lawfully in its possession, may be commenced or proceeded with, without the leave of the corporate rescuer practitioner or the court and in accordance with any terms the court considers suitable. If you are owed money by the company for any reason whatsoever… you are required to complete the proof of claim form and lodge them with the High Court.”
Officials at the mine, about 40 kilometres north-west of Karoi, said in 2017 that Lynx’s crisis had been triggered by falling graphite prices.
“We used to get US$600 a tonne, but right now it’s only US$340,” one official said in 2017.
Lynx Mine CEO at the time, Cris Chitambira, said the
US$5 million was meant to help the operation produce 500 tonnes of graphite per month.
“Debt is the preferred option, but equity could be considered,” Chitambira told the South Africa-based
“We believe this investment will improve the quality and quantity of the graphite we are able to extract,” said Chitambira, indicating that there were planing to kick off underground mining.
Graphite is mainly needed to produce batteries, fuel cells and plastics.
Graphite is also found in other products of the chemical industry.
Experts say together with lithium, which has also been discovered in huge volumes in Zimbabwe, graphite is one of the future “strategic minerals” of the world economy due to the switch to electro mobility in the automotive industry.
The combined global market demands for both amorphous and flake graphite is estimated at about one million tonnes a year.
Zimbabwe was ranked tenth on a producer list topped by China, followed by Brazil, India, Turkey, Canada, Mexico, North Korea, Russia and Norway in 2015.
The country produced 7 000 tonnes of graphite in 2015, just about the time when Lynx was exploding into a crisis.
From 2009, the Zimbabwe Stock Exchange-listed Bindura Nickel Corporation (BNC) was forced into care and maintenance after international prices fell.
However, BNC would also return to normal operations as nickel prices regained traction from 2012.
Falling prices have traditionally been one of the biggest threats to resources firms.
In the late 1980s, a wave of mine collapses rattled Zambian mines after international copper prices tumbled, turning the copper-rich Copperbelt Region into a zone for ghost mines.
Zambian mines have also swung back.
Today, the Copperbelt is one of the most sought-after mineral regions in Africa, with Chinese investors among the most interested. The Standard