Zim­bab­wean plat­inum min­ers plunged into cri­sis

The Sunday Independent - - BUSINESS REPORT - Tawanda Karombo Harare

ZIM­BAB­WEAN plat­inum min­ers – among them units of Im­pala Plat­inum, Sibanye Gold and An­glo Plat­inum – have been plunged into deeper pro­cure­ment and fi­nan­cial hur­dles af­ter the govern­ment di­rected that 80 per­cent of their for­eign cur­rency re­ceipt be sur­ren­dered to the state.

Last week the Re­serve Bank of Zim­babwe (RBZ) or­dered the plat­inum and chrome min­ers to give up the earn­ings and de­posit the amount into lo­cal ac­counts this month, leav­ing them with only 20 per­cent that they can re­tain in forex.

Min­ing ex­ec­u­tives told Busi­ness Re­port that they were still weigh­ing op­tions as this would im­pact on oper­a­tions in a coun­try that has the world’s sec­ond largest plat­inum re­serves.

“We have lined up meet­ings to ex­plain to the cen­tral bank what the im­pli­ca­tions of this di­rec­tive are on oper­a­tions.

“Min­ing al­ready con­trib­utes sig­nif­i­cantly to govern­ment rev­enues and we in­tend to make it clear that this new po­si­tion will kill con­fi­dence in the sec­tor in terms of in­vest­ment and oper­a­tions,” said a se­nior min­ing ex­ec­u­tive in Zim­babwe.

There are fears that the move would af­fect sup­pli­ers, as cer­tain in­puts and equip­ments have to be paid for us­ing for­eign cur­rency.

Con­sul­tants warned that the al­lowance of 20 per­cent for the com­pa­nies would be stretched to the limit.

“We will see how it will be im­ple- mented but the im­me­di­ate threat from this is that sup­pli­ers will be af­fected in terms of pay­ments,” said David Dube, a sup­ply and pro­cure­ment con­sul­tant.

“We see more and more com­pa­nies, in­clud­ing the min­ers, hav­ing to re­sort to par­al­lel mar­kets for for­eign cur­rency to sus­tain oper­a­tions.”

Im­plats, An­glo Plat­inum and Sibanye were not im­me­di­ately avail­able for com­ment.

How­ever, Jo­han Theron, spokesman for Im­plats, pre­vi­ously said the cur­rent low price in the plat­inum en­vi­ron­ment re­quired in­vestor-friendly poli­cies that pro­moted growth in the in­dus­try.

“Key stake­hold­ers (have) to re­solve and agree how best to sup­port the in­dus­try dur­ing the dif­fi­cult pe­riod and (the in­dus­try) will also re­quire in­vest­ment-friendly poli­cies to in­cen­tivise in­vest­ment, to re­build and grow the in­dus­try when prices start to rise again,” said Theron.

The Cham­ber of Mines of Zim­babwe has said that min­ers have to deal with de­lays of up to three months to have their pay­ments to for­eign sup­pli­ers cleared.

The mines are the top for­eign cur­rency earn­ers in the coun­try.

How­ever, pol­icy pro­nounce­ments and er­ratic re­la­tions be­tween the govern­ment and ma­jor in­vestors have af­fected busi­nesses and eco­nomic projects have de­clined over the past few years, com­pared to re­gional peers such as Zam­bia and Mozam­bique. In 2016, Zim­babwe man­aged to at­tract only $294 mil­lion in for­eign di­rect in­vest­ments.

PHOTO: REUTERS

Em­ploy­ees walk un­der a con­cen­tra­tor at Ngezi plat­inum plant near Harare.

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