https://www.miningweekly.com

Revised Zimbabwe monetary policy to impact on Caledonia’s 2019 earnings

27th February 2019

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

Font size: - +

Dual-listed Caledonia Mining on Wednesday announced that, as a result of the revised monetary policy adopted by the Reserve Bank of Zimbabwe (RBZ), the export credit incentive (ECI) programme for Zimbabwean gold producers will be withdrawn.

This will likely reduce Caledonia’s earnings a share for 2019 and thereafter by about $5.4-million, or by $0.40 to $0.46 a share.  

For several years, the RBZ had operated the ECI programme, providing Zimbabwean gold producers a premium to the international gold price.

This premium was initially 2.5% of gold revenues, but later increased to 10%.

The ECI revenues were received into Caledonia’s real time gross settlement bank account and were therefore not eligible for remittance outside Zimbabwe with a specific allocation of foreign exchange by the RBZ.

The ECI revenues were not subject to Zimbabwean income tax.  

The removal of the ECI programme comes as part of a monetary policy statement which permits bank trading of currency held in local banking system (known as RTGS dollars) and currency held in foreign currency accounts (FCA) which is capable of being used for payments outside Zimbabwe.

Caledonia said that, at this stage, it is unclear whether this policy will address the increasing inflationary pressure in Zimbabwe by creating a transparent and efficient market exchange rate between RTGS dollars and dollars held in FCAs.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION