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Parly lambasts current gold payment model

The Parliamentary Portfolio Committee on Mines and Mining Development on Monday said the current gold payment model threatens miners viability.

Local miners are getting 60% foreign currency retention and are paid 40% in local currency for their gold deliveries to Fidelity Printers and Refiners (FPR).

This payment model, the Portfolio Committee on Mines and Mining Development chairman Edmond Mkaratigwa, who spoke at the tour to assess Fidelity Printers and Refiners (FPR)’s operations, said there was need for the monetary authorities to look into the miners payment criteria.

“…..There has to be a way to ensure that our mining houses remain profitable.

“The current pricing model does not promote productivity,” he said.

Miners are pushing the Reserve Bank of Zimbabwe (RBZ) to ‘ring-fence’ the 40% surrender requirement component and allow the mining houses to pay for essential services and taxes at the official exchange rate for them to remain viable.

The development comes at a time when the miners are losing 20% gross export proceeds due to the exchange rate disparities.

The FPR acting general manager Peter Magaramombe said the issue will be taken to relevant authorities.

“This is a policy issue and it needs the RBZ to deal with the matter as we are given a directive to follow the procedures,” he said.

RBZ increased the surrender requirements to 40% this year from 30% to fund the auction system; a move miners said has hamstrung the capital intensive mining sector.

The miners are also demanding an upward review of forex retention to 80%.

“We have been asking for the increase of the foreign currency retention levels to above 60% and decrease of the forex surrender requirement but to date nothing has been done. What we are now asking is for the RBZ to allow us to pay electricity, levies, taxes and royalties with the liquidated portion at a prevailing official market rate,” Chamber of Miners chief executive officer Isaac Kwesu said. (Business Times)


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