Zimbabwe wants cash bail-out from foreign miners

A Zimplats operation in Zimbabwe. File picture: Supplied

A Zimplats operation in Zimbabwe. File picture: Supplied

Published Apr 28, 2017

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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.

Read also:  Zimbabwe rejects adoption of rand

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.

BUSINESS REPORT ONLINE

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