RioZim considering halting gold operations in Zimbabwe

RioZim, one of Zimbabwe’s largest gold producers, has announced that it was stopping production at its gold mines because of a multitude of problems haunting the operating atmosphere in the nation.

The board of directors issued a cautionary warning to shareholders and investing public over its incapacity to proceed producing bullion as a consequence of not being able to meet working expenditure due to foreign foreign money constraints, amongst different components.

The statement launched on Tuesday said that the fixed trade price mechanism of 25 Zimbabwe {dollars} (ZWL) to 1 U.S. greenback, the restricted foreign currency retention policy and delays in receipt of gold sale proceeds were impacting negatively on the company.

“The directors of RioZim Limited want to advise the corporate’s shareholders and the investing public that the corporate is at the moment going through extreme challenges arising from a significant discrepancy between its bills and receipts for its gold production,” it mentioned.

“That is being pushed by a mix of the mounted trade price mechanism and the restricted retention of foreign currency being made available to it,” it mentioned.

In keeping with a current pronouncement by the Reserve Bank of Zimbabwe, gold producers are entitled to 70 p.c of their proceeds in foreign currency and get the rest at the prevailing fixed interbank exchange price.

That is despite the fact that the real market buying power of the U.S. greenback is at the moment about 80 ZWL, RioZim argued.

“This effectively implies that the corporate is promoting 30 p.c of its U.S. {dollars} at a rate of 25:1 whereas the market and the corporate’s suppliers are pricing goods in excess of 80:1. This payment mechanism primarily implies that the corporate is getting lower than 80 p.c for its gold manufacturing in comparison with the worldwide market value,” the corporate lamented.

It mentioned the corporate is now not in a position to meet its operational expenditure necessities contemplating that it’s required to pay for electricity and fuel in foreign currency, along with virtually all of its consumables and spares.

“A part of the salaries of employees are additionally paid in U.S. {dollars}, making it unimaginable to make ends meet. Which means that the corporate doesn’t have enough international forex to maintain its operations not to mention fund progress,” it mentioned.

Staff are additionally refusing to be paid any ZWL and if paid in ZWL they’re insisting that they’re rated on the so-called ‘market trade price’, it mentioned.

The corporate additionally lamented delays by RBZ’s gold buying arm Fidelity Printers and Refiners in paying for the delivered gold.

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