Listed gold miner RioZim says it has suspended production at its three mines for the second time in four months after the Reserve Bank of Zimbabwe (RBZ) failed to pay it in United States dollars for gold deliveries.
RioZim is Zimbabwe’s second biggest gold producer and last October threatened legal action to force the Reserve Bank to pay it more dollars for part of its output.
The gold producer said the delays in dollar payments had affected the viability of its mines.
“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.
“Notwithstanding these commitments, the Board of RioZim Limited regrets to advise that the Reserve Bank of Zimbabwe through its wholly owned subsidiary Fidelity Printers and Refiners (Private) Limited has been failing to meet these commitments.
“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 and this has severely affected the viability of the Company’s operations and consequently, the Company has been recently forced once again, to involuntarily suspend operations across all three of its gold mines pending full payment of its foreign exchange proceeds which it requires in order to procure the necessary consumables needed to keep the gold operations running,” in a notice to the ZSE today.
According to Zimbabwean law, gold producer operating in the country are required to sell their output to RBZ subsidiary Fidelity Printers and Refiners and in turn are supposed to be paid 55 percent of their earnings in U.S. dollars, while the balance of is paid via electronic dollars (read ‘local currency).
RioZim has said it is currently engaged with the RBZ and the Ministry of Mines.
Gold is the country’s single largest export earner and production reached an all-time high of 33 tonnes last year.