Harare – Zimbabwe has asked foreign miners – whose operations are being crippled by delayed payments for international transactions owing to a worsening cash crisis - to spend more on local procurement and other payments.
Harare is battling to contain a crisis occasioned by shortages of bank notes, with Mines and Mining Development Minister, Walter Chidakwa saying foreign miners now have to spend 75 percent of their earnings on payments inside the country.
This would be in pursuit of compliance with indigenisation after President Robert Mugabe softened his stance on forcing foreign miners to cede 51 percent shares to local Zimbabwean groups.
“So either you go for the (49 percent foreign ownership) or the 75 percent local spending. I can tell you many companies are keen on the 75 percent (local) spending,” Chidakwa said while launching a funding scheme for small scale miners this week.
Increased local spending by miners – which are highly cash generative – would help breathe fresh liquidity impetus into the economy. Impala Platinum's unit in Zimbabwe, Zimplats, says it spent about $51 million on local payments during the quarter to end March.
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Zimplats also paid $10 million in taxes during the period. Mineral royalties and other taxes from mining companies, among them also units of Anglo Platinum, Sibanye Gold and Metallon Corporation, are among the mainstays of Zimbabwe’s fiscus alongside tobacco earnings, tourism and telecommunications.
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