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RBZ comes to RioZim’s mercy; introduces measures to incentivise large-scale gold producers

There are a number of other measures that have been proposed by the Reserve Bank of Zimbabwe to incentivise and assist gold producers including export incentives and confirmed letters of credit to fund capital expenditure requirements.

By Business Reporter

HARARE (Mining Index) – FOLLOWING closure of RioZim’s three mines in September this year, the mining giant has announced that the Reserves Bank of Zimbabwe (RBZ) has committed to introduce a raft of measures aimed to support and incentivise gold producers in Zimbabwe.

Large scale miners will now retain 55 percent of foreign currency from mineral exports to allow them recoup production costs, up from 30 percent of their export proceeds which they were previously getting, with the balance of 45 percent retained by government.

Since the temporary closure of its three mines, RioZim has been engaged in extensive discussions with various government departments, the central bank, and the Chamber of Mines in Zimbabwe to find a panacea to its foreign currency bottlenecks hampering its operational viability.

RioZim announced that the central bank has proposed to implement several initiatives to assist and incentivise gold producers in Zimbabwe.

“Furthermore, there are a number of other measures that have been proposed by the Reserve Bank of Zimbabwe to incentivise and assist gold producers including export incentives and confirmed letters of credit to fund capital expenditure requirements,” said the board.

On 15 November 2018, RioZim withdrew earlier cautionary statements dated 9 October 2018 and the 1 November 2018 saying its plight has been amicably resolved, although still monitoring the situation.

“The cautionary announcements of the 9th of October 2018 and the 1st of November 2018 are hereby withdrawn for the time being in as far as the events alluded to therein are concerned and the stated caution is no longer required to be exercised when dealing in the shares of the Company,” said RioZim.

In the earlier cautionary statements, RioZim had threatened to take legal action against the apex bank after the mining giant closed Cam and Motor, Renco and Dalny mines.

RioZim board of directors announced that the company is now in a position to resume operations at all three of its gold mines as it is now financially sound to procure required inputs and consumables.

“The Company’s ability to resume operations at these mines follows a commitment by the Reserve Bank of Zimbabwe that with immediate effect, it will increase the percentage of export proceeds that can be retained by gold producers in their individual Nostro FCA accounts,” said the RioZim board in a statement.

RioZim board advised its shareholders that it will continue to monitor the situation closely in respect of the adequacy of the proposed measures in meeting its operational and investment needs whilst its engagements with government, central bank and the mining industry continue to take place in finding a sustainable solution. ENDS//

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