RioZim Mines Suspended Again As RBZ Fails to Allocate Foreign Currency

RioZim Mines Suspended Again As RBZ Fails to Allocate Foreign Currency
Image Credit: All Africa News

Three RioZim Limited mines are forcibly suspending operations. Due to the Reserve Bank of Zimbabwe (RBZ) failure to allocate enough foreign currency for the gold producers.

RioZim in a press release says RBZ’s Fidelity Printers and Refiners (Private) Limited has been failing to meet commitments made to gold producers.

“As part of the commitments made to gold producers in November 2018 to support their operations, the Reserve Bank of Zimbabwe undertook to allow all gold producers to maintain 55% of their export earnings in their foreign currency nostro accounts and to increase export incentives on all minerals,” RioZim Management Services (Private) Limited, Per Z. Makorie said.

“As of date, the Company has experienced significant and persistent delays in payment of its foreign currency allocation for deliveries made to Fidelity Printers Refiners (Private) Limited since December 2018. This has severely affected the viability of the Company’s operations. Consequently, the Company recently was forced once again, to involuntarily suspend operations across all three of its gold mines. Due to pending full payments of its foreign exchange proceeds which it requires in order to procure the necessary consumables needed to keep the gold operations running.”

The RioZim gold mines that have stopped operation due to foreign currency shortages include Cam and Motor Mine, Dalny Mine and Renco mine.

The gold mines need foreign currency to purchase the raw materials required for gold production.

“As at the Company’s reviewed half-year financial statements, the gold business contributed circa 90% of the Company’s total revenue,” Makorie said. “Therefore, the current stoppage in production has a material impact on the Company’s performance.”

Gold producers once suspended gold production in October last year.  Due to the same reason of foreign currency shortage in line with RioZim stating a significant negative impact on the mining company’s ability to meet its projected targets.

Producers in various sectors have been facing challenges in accessing raw materials due to foreign currency challenges.

“In the interim and as a result of the above, the Company is currently engaging the Reserve Bank of Zimbabwe. As well as the Chamber of Mines and other authorities on how to expediently resolve this matter, Makorie said.

Be the first to comment

Leave a Reply

Your email address will not be published.