Last week the Reserve Bank of Zimbabwe (RBZ) ordered the platinum and chrome miners to give up the earnings and deposit the amount into local accounts this month, leaving them with only 20 percent that they can retain in forex.
Mining executives said that they were still weighing options as this would impact on operations in a country that has the world’s second largest platinum reserves.
“We have lined up meetings to explain to the central bank what the implications of this directive are on operations.
“Mining already contributes significantly to government revenues and we intend to make it clear that this new position will kill confidence in the sector in terms of investment and operations,” said a senior mining executive in Zimbabwe.
There are fears that the move would affect suppliers, as certain inputs and equipments have to be paid for using foreign currency.
Consultants warned that the allowance of 20 percent for the companies would be stretched to the limit.
“We will see how it will be implemented but the immediate threat from this is that suppliers will be affected in terms of payments,” said David Dube, a supply and procurement consultant.
“We see more and more companies, including the miners, having to resort to parallel markets for foreign currency to sustain operations.”
Implats, Anglo Platinum and Sibanye were not immediately available for comment.
However, Johan Theron, spokesman for Implats, previously said the current low price in the platinum environment required investor-friendly policies that promoted growth in the industry.
“Key stakeholders (have) to resolve and agree how best to support the industry during the difficult period and (the industry) will also require investment-friendly policies to incentivise investment, to rebuild and grow the industry when prices start to rise again,” said Theron.
The Chamber of Mines of Zimbabwe has said that miners have to deal with delays of up to three months to have their payments to foreign suppliers cleared.
The mines are the top foreign currency earners in the country.
However, policy pronouncements and erratic relations between the government and major investors have affected businesses and economic projects have declined over the past few years, compared to regional peers such as Zambia and Mozambique. In 2016, Zimbabwe managed to attract only $294 million in foreign direct investments.
- BUSINESS REPORT