News / National
RioZim halts operations again as RBZ defaults on forex payment
10 Feb 2019 at 06:16hrs | Views
One of the country's leading gold producers, RioZim, has yet again stopped operations at three of its mines - Cam and Motor, Dalny and Renco - citing non-payment by the Reserve Bank of Zimbabwe (RBZ) for gold deliveries made to Fidelity Printers and Refiners.
Gold mines are required by law to sell their produce to Fidelity Printers and Refiners, which is a wholly-owned subsidiary of the central bank.
Mining is the largest earner of foreign currency in the southern African country, contributing more than 60% of total exports, but miners are forced to surrender 70% of their export earnings to the central bank, which is supposed to allocate the foreign exchange to the rest of the economy.
In exchange for the foreign currency, the central bank pays the exporter using Real Time Gross Settlement (RTGS), crediting the exporter's account with local currency.
"As of date, the company has experienced significant and persistent delays in payment of its foreign currency allocation for deliveries made to Fidelity Printers and Refiners since December 2018 and severely affected the viability of the company's operations and consequently, the company has been recently forced once again, to involuntarily suspend production across all three of its gold mines pending full payment of its foreign exchange proceeds which it requires in order to produce the necessary consumables needed to keep gold production running," RioZim said in a statement.
Last October RioZim also halted operations and then resumed after the central bank undertook to allow all gold producers to keep 55% of their export earnings in their foreign currency nostro accounts and to increase export incentives on all minerals. But according to RioZim this did not happen.
RioZim reported that it was owed $92 million by the RBZ as of October 2018.
"Notwithstanding these commitments, the board of RioZim regrets to advise that the Reserve Bank of Zimbabwe through its wholly-owned subsidiary Fidelity Printers and Refiners has been failing to meet these commitments."
In the half year to June the gold business contributed around 90% of the company's total revenue.
RioZim produced 2,1 tonness of gold in 2017, accounting for almost 10% of total output in Zimbabwe.
Gold mines are required by law to sell their produce to Fidelity Printers and Refiners, which is a wholly-owned subsidiary of the central bank.
Mining is the largest earner of foreign currency in the southern African country, contributing more than 60% of total exports, but miners are forced to surrender 70% of their export earnings to the central bank, which is supposed to allocate the foreign exchange to the rest of the economy.
In exchange for the foreign currency, the central bank pays the exporter using Real Time Gross Settlement (RTGS), crediting the exporter's account with local currency.
"As of date, the company has experienced significant and persistent delays in payment of its foreign currency allocation for deliveries made to Fidelity Printers and Refiners since December 2018 and severely affected the viability of the company's operations and consequently, the company has been recently forced once again, to involuntarily suspend production across all three of its gold mines pending full payment of its foreign exchange proceeds which it requires in order to produce the necessary consumables needed to keep gold production running," RioZim said in a statement.
Last October RioZim also halted operations and then resumed after the central bank undertook to allow all gold producers to keep 55% of their export earnings in their foreign currency nostro accounts and to increase export incentives on all minerals. But according to RioZim this did not happen.
RioZim reported that it was owed $92 million by the RBZ as of October 2018.
"Notwithstanding these commitments, the board of RioZim regrets to advise that the Reserve Bank of Zimbabwe through its wholly-owned subsidiary Fidelity Printers and Refiners has been failing to meet these commitments."
In the half year to June the gold business contributed around 90% of the company's total revenue.
RioZim produced 2,1 tonness of gold in 2017, accounting for almost 10% of total output in Zimbabwe.
Source - the standard
