Zimbabwe gold miner resumes operations after central bank ups forex retention

Source: Xinhua| 2018-11-16 20:24:22|Editor: xuxin

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HARARE, Nov. 16 (Xinhua) -- Zimbabwe's gold miner RioZim said Friday it has resumed operations at three of its mines after striking a deal with the Reserve Bank of Zimbabwe (RBZ) on foreign currency payments.

The Zimbabwe Stock Exchange-listed miner closed the three gold mines last month citing viability challenges due to foreign currency shortages.

The firm last month also threatened to sue the RBZ for reneging on its 2016 policy to pay gold producers 50 percent of their earnings in U.S. dollars.

Gold producers in Zimbabwe sell their gold only to Fidelity Printers and Refiners, a subsidiary of the RBZ.

The firm said it was now resuming operations following extensive discussions with government ministries, RBZ and the Chamber of Mines.

"The company is now in a position to resume operations at all three of its gold mines, namely Cam & Motor, Renco, and Dalny due to its ability to procure the necessary inputs and consumables.

"The company's ability to resume operations at these mines follows a commitment by the RBZ of Zimbabwe that with immediate effect, it will increase the percentage of export proceeds that can be retained by gold producers in their individual Nostro foreign currency accounts," RioZim said in a statement.

Further, the RBZ had also proposed a number of other measures to incentivize and assist gold producers including export incentives and confirmed letters of credit to fund capital expenditure requirements, the company said.

According to Zimbabwe's forex policy, gold miners will now retain 55 percent of their foreign-exchange earnings, up from 30 percent.

RioZim said it will, however, continue to monitor the situation closely with regards to the adequacy of the proposed measures in meeting its operational and investment needs.

Zimbabwe is facing an acute shortage of foreign currency which has affected importation of essential commodities such as fuel and medical drugs.

Gold is Zimbabwe's second largest export after tobacco.

The country is targeting to produce 34 tons of gold in 2018, its highest production since 1980.