- July 9, 2020
- Posted in LOCAL
ONE of Zimbabwe’s largest gold miners, RioZim, says it has received an insignificant amount from funds owed by gold buyer, Fidelity Printers and Refiners (FPR), while delayed payment has put the firm under ‘enormous financial stress’.
FPR is the country’s sole authorised gold buyer and it is a division of the Reserve Bank of Zimbabwe (RBZ). The listed mining company said last month it was owed US$2,46 million and $68,48 million (Zimbabwean dollars for gold deliveries.
The gold mining entity said it last month was struggling to pay for electricity, salaries and fuel, costs it said were all denominated in US dollars.
However, RioZim said there was no dispute between the company and FPR or the central bank on the amounts owing and that discussions regarding the overdue payment were still in progress between itself, FPR and the RBZ.
“It is therefore the company’s hope that the issue can be resolved expeditiously to capacitate the company to meet its operational expenditure requirements,” said RioZim company secretary Per Chiurayi in a statement yesterday.
RioZim said it was confident the amount owing will be received eventually, but the delayed in payment was “placing the company under enormous financial stress”. RioZim operates three gold mines namely Renco in Masvingo, Cam and Motor in Kadoma and Dalny Mine in Chegutu.
Apart from the three gold mines RioZim also operates RioZim Energy, which is developing a 2 000 megawatt power plant in Sengwa, Gokwe North, Rio Base Metals comprised solely by Empress Nickel Refinery and Murowa Diamonds, a small-scale but efficient and viable open cast diamond mining operation in Zvishavane.
One of Zimbabwe’s biggest gold miners and ZSE listed entity last month said it had been forced to stop gold mining operations due to inability to meet operating costs.
RioZim attributed the challenges to the RBZ’s retention threshold and the pegged exchange rate, an arrangement that has since been removed and replaced with a weekly auction system.
Following a revised framework, gold miners are required to surrender 30 percent of their foreign currency earnings to the RBZ, which is then liquidated at the ruling exchange rate and paid in local currency.
So contentious has been the issue of delayed payment that in 2018, RioZim suspended operations at Cam and Motor, Dalny and Renco Mine after claiming it had run out of money to import “cyanide, activated carbon, explosives, as well as spares for the repair of equipment among other items”.
Again in February 2019, RioZim suspended operations saying it had “experienced significant and persistent delays in payment of its foreign currency allocation for deliveries made to FPR.
Gold production is key to Zimbabwe’s export performance, raking in US$1,3 billion in export earnings from 27,6 tonnes of gold in 2019, up from US$1,1 billion recorded from an all-time high output of 33,2 tonnes in 2018_Business Weekly