News / National
RioZim sues RBZ over US$ payments
22 Nov 2018 at 01:03hrs | Views
Resources group, RioZim, has sued the central bank to force it to pay over $92 million it claims is owed dating back to 2016 in a case that highlights the acute dollar shortages blighting the southern African country's economy.
Gold mines are required by law to sell their produce to Fidelity Printers, an arm of the Reserve Bank which then exports the mineral. From the beginning of last month, they were allowed to retain 30 of the export earnings, down from 50% previously.
Government on Monday this week said it will now allow gold and platinum mining companies to retain up to 55% of their earnings in United States dollars while the balance is transferred to their local accounts via electronic transfers.
Last month, RioZim said it has, on average, only received 15% of what it is owed since 2016 and that it was "facing severe challenges arising from the company's inability to access its foreign currency earnings that are required to fund its operations and sustain its growth."
It also shut down its three gold mines – Cam and Motor, Dalny and Renco – after running out of imported inputs. They mines have since reopened.
"During the period between June 1, 2016 and September 30, 2018, the plaintiff (RioZim) was entitled in terms of the directives to receive and access from the first and second defendants (RBZ and Fidelity Printers and Refiners) the amount of $84 297 364 in hard foreign currency, which amounted to 50% of its export proceeds, which amount in accordance with the exchange control directive RR101/2016 was to be kept in the first defendant's (Fidelity Printers) nostro account for allocation to the plaintiff," RioZim said in its declaration.
"In breach of the provisions of the exchange control directives and notwithstanding numerous request/protests by the plaintiff to be allocated and be given access to utilise the foreign currency that it generated externally in order to meet its operational requirements, the plaintiff only received and was given access from the first defendant to $26 130 967 which constituted only 15% of the amount due to be allocated to the plaintiff in US$, as opposed to the stated 50%.
"In breach of the exchange control directives the first and second defendants paid the balance of $58 166 397 to the plaintiff locally through RTGS payments as opposed to allocating the same to the plaintiff from the first defendant's nostro account and, therefore, the plaintiff was precluded from using the said funds externally in order to fund its operational requirements," read the miner's filing at the High Court.
RioZim also said although it had cited Ecobank and Cabs as co-defendants, no relief is currently being sought against the two financial instructions.
Gold mines are required by law to sell their produce to Fidelity Printers, an arm of the Reserve Bank which then exports the mineral. From the beginning of last month, they were allowed to retain 30 of the export earnings, down from 50% previously.
Government on Monday this week said it will now allow gold and platinum mining companies to retain up to 55% of their earnings in United States dollars while the balance is transferred to their local accounts via electronic transfers.
Last month, RioZim said it has, on average, only received 15% of what it is owed since 2016 and that it was "facing severe challenges arising from the company's inability to access its foreign currency earnings that are required to fund its operations and sustain its growth."
"During the period between June 1, 2016 and September 30, 2018, the plaintiff (RioZim) was entitled in terms of the directives to receive and access from the first and second defendants (RBZ and Fidelity Printers and Refiners) the amount of $84 297 364 in hard foreign currency, which amounted to 50% of its export proceeds, which amount in accordance with the exchange control directive RR101/2016 was to be kept in the first defendant's (Fidelity Printers) nostro account for allocation to the plaintiff," RioZim said in its declaration.
"In breach of the provisions of the exchange control directives and notwithstanding numerous request/protests by the plaintiff to be allocated and be given access to utilise the foreign currency that it generated externally in order to meet its operational requirements, the plaintiff only received and was given access from the first defendant to $26 130 967 which constituted only 15% of the amount due to be allocated to the plaintiff in US$, as opposed to the stated 50%.
"In breach of the exchange control directives the first and second defendants paid the balance of $58 166 397 to the plaintiff locally through RTGS payments as opposed to allocating the same to the plaintiff from the first defendant's nostro account and, therefore, the plaintiff was precluded from using the said funds externally in order to fund its operational requirements," read the miner's filing at the High Court.
RioZim also said although it had cited Ecobank and Cabs as co-defendants, no relief is currently being sought against the two financial instructions.
Source - newsday
