Advantages of the updated RBZ Exchange Control Regulations to the Chrome Producer / Miner:
1 Chrome Producers / Miners have a clearly defined payment structure which enables them to receive the much needed foreign currency earnings.
Chrome Producers wishing to receive payments in foreign currency from chrome buyers are required to open an Exports Nostros Account in order to enable chrome buyers to send payments in forex .With this new update, the Nostro Export Account enables Chrome miners to receive funds from a domestic / local transaction but the rules still apply on retention at 50% .
2 Chrome Producers / Miners have a formal payment structure that enables them to pay for the required goods and services in foreign currency as per the requirements of the foreign based service providers and equipment suppliers. Note: The majority of the Producers / Miner’s Costs are in Foreign Currency. Mining Equipment, Maintenance Parts, Technical Support Services are all imported.
3 A Key point to Note: Our Zimbabwean Government Officials, RBZ, Ministry of Finance, Ministry of Mines & Mining Development, MMCZ, as well as the Commercial Banking System will now be able to assess and monitor the domestic/ local Chrome sales transactions, (these make up the majority of small scale miner transactions). This will further drive our nation to identify Chrome Buyers who are engaged in predatory chrome buying practices (offering ultra-low amounts below the international market prices for chrome to producers / miners). Concurrently , this will enable RBZ to track and target chrome buyers who are currently engaged in illegal transfer pricing activities .Chrome Buyers and their agents engaged in transfer pricing activities, we expect will be seriously dealt with to the maximum capacity of our nation’s laws and they will be subsequently removed from operating a predatory business from within our nation.
- With the Commercial Banking sector taking on its role as the manager of financial transactions on the domestic as well as export markets, chrome producers / miners will benefit from their banking services such as financial advisory and business growth planning services. Loan packages in both foreign currency and RTGS dollars will become available to assist in advancing operations, obtaining mining equipment, as well as in technical support services.
- Direct foreign investment (Which had left the chrome mining sector upon the RBZ / Ministry of Finance announcement of the foreign currency payment ban for domestic transactions), will now return to the chrome production / mining sector as the ability for chrome producers/ miners to earn foreign currency has returned to the domestic market; Direct Foreign Investment also restituted because the new policy enables foreign currency payment obligations to be met .This policy facilitates the operational requirements for a business to be deemed commercially viable.
- Equally important, the policy provides a pathway to value addition for chrome producers/ miners as they will now earn the required foreign currency to invest in value addition machinery and technology. In addition, Commercial Bank Investment loans can be accessed leveraging the foreign currency earnings of the Chrome Producers / Miners.
- When combined with the new Chrome Policy which is currently under review by the Ministry of Mines and Mining Development’s policy implementation team, the chrome sector is now repositioned for growth.
- The National benefit – increased access to foreign currency within our nation’s Banking System which will also feed into other industries as well.