Maputo — The British mining company Noventa whose Mozambican subsidiary, the Highland Mining Company, runs the Marropino tantalite mine in the central province of Zambezia, has admitted that it has defaulted on a rescue loan that it received in August last year.
The default came into effect on Sunday when Noventa missed a deadline to confirm that it could carry out its business plan with funds available from the loan. The lender has refused to give the company an extension until 28 February.
As a result of the default, Noventa has had to stop using funds from the loan. It says that it will keep operating until the end of the month after which “if the default is confirmed and the lender exercises its remedies, the company will in all likelihood become immediately insolvent”.
Shares in Noventa dropped by 65 per cent on the London stock exchange following the news.
On its website, Noventa declares that its strategy ”is to be the world’s largest, low cost industrial scale supplier of tantalum concentrate, a rare speciality metal widely used in the consumer electronics industry”. This strategy now seems to lie in ruins.
The Marropino mine resumed production in April 2010, but if Noventa is declared insolvent, the future of tantalite mining at Marropino will be thrown into uncertainty.