Operations at three Zimbabwe gold mines owned by ZSE listed
RioZim have been suspended as the company – which also runs the Murowa diamond
mine – failed to get foreign currency earnings from gold sales through a unit
of the Reserve Bank of Zimbabwe.
RioZim is among the biggest mining companies in Zimbabwe
but has been struggling for viability. It has failed to get gold sales
proceeds, which it required to pay for imported equipment and production
implements.
On Friday the company said it has been “forced to suspend
operations across all three of its gold mines pending full payment of its
foreign currency proceeds which is required in order to procure the necessary
consumables needed to keep gold production” running.
Other gold producers in Zimbabwe that include Metallon have
also been struggling, managers from some of its operations said. Falcon Gold
has also been encountering foreign currency challenges and this week was
suspended from the Zimbabwe Stock Exchange for delaying its financials.
All this may affect Zimbabwe’s targeted gold production of
40 tonnes for 2018 after the country ramped up gold output to 33 tonnes in
2018.
RioZim added: “The Reserve Bank of Zimbabwe undertook to
allow all gold producers to maintain 55% of their export earnings in their
foreign currency accounts and to increase export incentives on all minerals.
The board of RioZim regrets to advise that the Reserve Bank of Zimbabwe has
been failing to meet these commitments.”
It further said the company has been experiencing
“significant and persistent delays in payment of its foreign currency
allocation for deliveries since December 2018” and that this has “severely
affected the viability” of its operations.
Although gold miners have been struggling, platinum miners,
which include units of Impala Platinum and Anglo Platinum appear to be better
off.
Implats spokesperson, Johan Theron recently said by email that:
“Both Mimosa and Zimplats receive their revenue in hard currency (US$) and we
expect that they will be able to continue using same to sustain the operations
in Zimbabwe which will protect them against undue cost escalation.”
However, according to a survey of mining industry
executives in Zimbabwe conducted by the chamber of mines, mining managers in
Zimbabwe are concerned about the impact of currency shortages in the country.
Zimbabwe Mines Minister, Winston Chitando is drumming up
mining firms to raise production and earn the country more foreign currency.
He has also said the Reserve Bank of Zimbabwe is to fix the
foreign currency challenges that miners are facing in the next few weeks
although this may be coming late after the shut-down of the three RioZim gold
mines. IOL
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