Mining sector to meet Chitando over forex allocation

MINE workers and the Chamber of Mines have agreed to approach the government and table a request for the sector to get at least 80% of their foreign currency earnings, businessdigest has learnt.

This comes at a time mine workers are demanding to be paid in foreign currency pointing out that their salaries in Real-Time Gross Settlement and bond notes have been seriously eroded amid price hikes of basic commodities.

Associated Mine Workers' Union of Zimbabwe president Tinago Ruzive told businessdigest on Wednesday that they had agreed with the Chamber of Mines to set up a meeting with Mines minister Winston Chitando to discuss the issue of forex retention.

"When we met the Chamber we agreed that we should team up and meet the minister and demand that the sector retains 80% of their forex earnings," Ruzive said. "If the government agrees to this, it means us as mine workers can be paid in forex."

The Chamber of Mines has told mine workers that employers will only pay them in forex if they can get forex retention of at least 80%.

The issue of forex retention has been a thorny issue, particularly in the gold mining sector. Last year, Riozim closed three of its gold mines citing the inadequate allocation of foreign currency, which then stood at 30%. It resulted in the Reserve Bank of Zimbabwe increasing the allocation to 55%.

Many mining companies have been struggling to remain operational due to the low foreign currency retention threshold set by the central bank.

The Dimension Stone Producers' Association has also called on the Reserve Bank of Zimbabwe to increase the foreign currency retention threshold to ensure viability. The association has been calling on the central bank to increase its forex retention from the current 50% to at least 85%.

Some mining companies have decided to pay a certain percentage of their employees' salary in forex in a bid to placate restive workers.