Gold and platinum mining companies to retain higher dollar earnings in Zimbabwe

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The Zimbabwean government and central bank officials said they will allow gold and platinum mining companies to retain up to 55 percent of their earnings in dollars. This initiative was proposed to ensure operators remain viable.

As a result of the dollar scarcity that has disrupted the importation of spare parts and other consumables, some mining companies have closed their doors. A development that is troubling considering that mining accounts for more than two-thirds of Zimbabwe’s export earnings.

Polite Kambamura, the deputy mines minister said gold producers that sell their output to a central bank refining subsidiary would now keep 55 percent of their sales in dollars, up from 30 percent previously. He however revealed that the threshold should gradually increase to 70 percent.

John Mangudya, central bank governor noted that the dollar retention levels for platinum and chrome miners had been increased to 50 percent from 35 percent.

During the publication of the results of a survey on the state of mining, Mangudya said “we have made a decision that there is viability in mining by making sure we don’t kill the goose that lays the golden egg”. Although he didn’t provide any details, the central bank governor said the Bank would create a special fund to help mining companies with extra U.S. dollar requirements.

According to the survey results, mining executives are positive about the industry’s prospects in 2019, but are pessimistic about the government’s ability to maintain predictable and consistent mining policies.

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