Harare – ZSE listed RioZim has suspended operations at three of its gold mines, which comes barely 3 months after the previous closure.
The listed miner is faced with retooling challenges which it attributes on government’s failure to avail adequate access to gold sales receipts.
Miners were promised 55% in forex retention which Rio says has not been materialized thus causing operational challenges both in terms of working capital and capital expenditure.
In a statement published on ZSE, RioZim said the central bank has failed to allocate foreign currency for gold deliveries made to Fidelity Printers and Refiners (FPR) and this has affected the viability of the company’s operations.
“To date, the Company has experienced significant and persistent delays in payment of its foreign currency allocation for deliveries made to FPR since December 2018 and this has severely affected the viability of the Company’s operations and consequently, the Company has been recently forced once again, to involuntarily suspend operations across all three of its gold mines pending full payment of its foreign exchange proceeds which it requires in order to procure the necessary consumables needed to keep the gold operations running,” reads part of the statement.
The country’s gold production has been falling since the last quarter of 2018 into 2019 with production averaging 1.7 tones between October and January 2019 this compares to a monthly production target of 2.6 tones over the 2018 full year .
Falcon Gold has also been encountering foreign currency challenges and this week was suspended from ZSE for delays in releasing its financials.
Gold is Zimbabwe’s largest forex earner accounting for 28% of the total at $1.25 billion. A dearth in production across the broader sector spell doom for the economy.
In 2019 gold production is likely to fare worse off compared to 2018 by a 35% worse off margin.
The company said it is currently engaging the government through the central bank and the Chamber of Mines and other authorities on how to expediently resolve the matter.
Equity Axis News
