Home Mining Miners Call For A Review Of Forex Retention.

Miners Call For A Review Of Forex Retention.

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Small Scale miners have called for a review of foreign currency retention threshold that they get for deliveries saying there is also a need to retain the payment ratio that resulted in record deliveries.

Presenting a paper at a meeting with Fidelity Printers and Refineries where the gold buyer sought for producer input on how to grow deliveries, small-scale miners’ representative body — Zimbabwe Miners Federation (ZMF) secretary general Morgan Mugawu, said there is need for a review of the foreign currency retention threshold.

“On foreign currency retention, our appeal is that Fidelity restores the 70:30 ratio, the reason being that the 55:45 threshold has had negative gold delivery effects.

“What we are saying is that we are better off with Government retaining 30 percent and dissuade leakages than taking 45 percent but at the end of the day foster fertile ground for leakages that then harm the economy.

“We are not saying we want 100 percent for the producer because we are aware Government has other critical obligations to be met in foreign currency but the reality is the fiscus is better off with 30 percent of 40 tonnes than 45 percent of 10 tonnes,” he said.

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Under Zimbabwean laws, only Fidelity Printers and Refiners have the mandate to purchase gold from miners.

The law also says gold miners can only retain 55% of their earnings in foreign currency, while the balance is paid in local bond notes.

The sole buyer, Fidelity, has been failing to pay for gold deliveries, forcing miners to struggle to pay for critical raw materials and consumables needed to keep gold production running.

Zimbabwe last year produced a record 33,2 tonnes of the yellow metal and Government has set this year’s target at 40 tonnes. The target is to produce 100 tonnes per year from 2023 onwards.

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