Zimbabwe miner RioZim demands $92m from central bank in lawsuit – document

22nd November 2018

By: Reuters

  

Font size: - +

HARARE – Zimbabwean miner RioZim is demanding $92-million from the central bank in a lawsuit brought to force the Reserve Bank to pay for more of its gold purchases from the company in US dollars, court documents showed.

Miners are struggling as Zimbabwe grapples with an acute shortage of dollars.

Producers sell all their gold to the central bank's subsidiary Fidelity Printers and Refiners, which then exports it. RioZim, however, says that since 2016 the central bank only paid for 15% of gold it purchased from the company in dollars, breaching its policy to pay for 30% in the US currency.

The central bank has not commented on the lawsuit.

RioZim first announced on Oct. 9 that it would take legal action against the central bank, signalling impatience by miners over the dollar shortages.

In its summons filed with the High Court dated Nov. 14, RioZim says it failed to receive $48-million due in payments from the central bank for its sales in dollars and suffered losses of $44-million due to lost production.

"The plaintiff suffered a direct loss of money and the devaluation of the purchasing power of its earnings ...," RioZim said in the documents seen by Reuters on Thursday.

The company says failure to receive dollar payments left it unable to import equipment and materials for capital projects, putting its operations in jeopardy.

The gold miner shut its three mines last month due to the dollar crunch until it can find a solution.

RioZim CEO Bekhinkosi Nkosi did not answer calls to his mobile phone for comment, while company attorneys Devittie Rudolph and Timba refused to comment.

The southern African nation adopted the US dollar in 2009 to tame hyperinflation, but it is facing acute dollar shortages and that has sent prices of basic goods spiralling and inflation rising to double digits.

On Monday, in a change of policy, central bank Governor John Mangudya and the deputy minister for mines announced that the government would allow gold, platinum and chrome mining companies to retain up to 55% of their earnings in dollars, up from 30%. The move is aimed at ensuring operators remain viable.

Mangudya could not be reached for comment on the lawsuit.

Edited by Reuters

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION