Creamer Media Login

Zimbabwe miners say foreign-exchange rule could trigger crisis

29th January 2021

Font size: - +

Mining companies in Zimbabwe said a central-bank requirement compelling them to surrender more foreign exchange earned from mineral exports will push their operations to the brink.

The Reserve Bank of Zimbabwe on January 8 announced that exporters must now hand over 40% of their foreign currency earnings, up from 30%, which is then paid out in the local currency.

The country’s mining body said the move would create “a viability crisis” for the industry as members already face increased demand for payment in hard currency from various government agencies, suppliers and service providers.

“On average, 60% of gross export proceeds are now taken by government departments and agencies, leaving inadequate forex resources for the mining firms to sustain operations,” the Chamber of Mines of Zimbabwe said in a letter to the central bank dated Jan. 19 and seen by Bloomberg.

The move could lead to lower output, and the suspension of exploration, maintenance and expansion activities including investment in power projects, it said.

The Southern African nation generates more than half of its foreign exchange via mineral exports from companies including the local units of Johannesburg-based Impala Platinum and Anglo American Platinum.

Central bank governor John Mangudya wouldn’t comment on the contents of the letter. “The retention rules are made always in mind with the foreign currency situation and needs of the country to source fuel, wheat and to pay for other goods and services,” he said by phone from the capital, Harare. “Foreign currency retention is not a right, but a privilege.”

Edited by Bloomberg

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?

Click Here

MAGAZINE & ONLINE

➕

RESEARCH CHANNEL AFRICA

➕

CORPORATE PACKAGES

CLICK FOR A QUOTATION

➕