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Zimbabwe raises gold miners' forex allowances after output halt

Nov 15 2018 23:00
Godfrey Marawanyika and Desmond Kumbuka, Bloomberg

Zimbabwe’s central bank has increased the amount of foreign exchange that gold companies can retain after a shortage forced some mines to close.

Metal producers in Zimbabwe have been struggling to meet production costs because of the shortage of hard currency. That forced RioZim to temporarily shutter three of its mines last month, curbing a key source of the country’s export earnings.

Gold miners will be allowed to retain 55% of their foreign-exchange earnings, up from 30% previously, Reserve Bank of Zimbabwe John Mangudya said in a phone interview on Thursday from the capital, Harare.

"We have reached an agreement with the Chamber of Mines," he said. "We will continue to monitor the situation on the ground to ensure viability for the sector."

Zimbabwe produced 30.3 metric tons of gold in the 10 months through October, surpassing the government’s target for the full year. The metal is Zimbabwe’s second-largest export after tobacco, according to the World Trade Organization.

Under Zimbabwean law, producers including RioZim and Metallon are required to sell all of their gold to Fidelity Printers and Refiners, a unit of the central bank.

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zimbabwe  |  africa economy  |  foreign exchange
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