Mining sector injects US$1 bln through retention liquidations

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Alois Vinga

ZIMBABWE’s mining sector injected a total US$1 billion through retention liquidations, which have gone a long way to support the industry and citizens, Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya revealed this week.

Under the RBZ’s foreign currency retention policy, miners get 60% or 70% of their export earnings in United States dollars in line with the export surrender requirements.

The remaining 40% or 30% is then released in the Zimbabwe dollar at prevailing official exchange rates.

The rationale behind the policy measure is to ensure that the benefits derived from the God- given natural resources are cascaded downwards for the benefit of every citizen.

Speaking to delegates at the Chamber of Mines Zimbabwe organised event this week, Mangudya said the sector continues to play an integral role in the Zimbabwean economy.

He said out of the US$4,530 billion worth of exports received over the first ten months’ period of the year from January and October 2022, US$4,5 billion was injected by the mining sector.

“In terms of the proportion that is liquidated, which ranges between 30% to 40% depending on where the company is operating, US$1 billion has been contributed by the mining sector between January and October 2022 through liquidations,” he said.

He said these funds have gone towards supporting the Foreign Exchange Auction System where US$926 million was utilised there and US$450 million was used for the payment of external obligations.

“In turn, the auction system is supporting the rest of the industry as you know we do not have enough cooking oil in this country, so we are importing crude oil. We did not have enough wheat last year, so we had to rely on this auction to import wheat.

“This year we are happy that we are expecting a good harvest and this will minimize the imports.

“That’s how important mining is to Zimbabwe, so when I hear about the shortage of foreign currency I want to speak to that, miners may not be getting enough but they are doing a great job for the economy,” he said.

Mangudya committed to working closely with the Chamber of Mines Zimbabwe in exploring ways to address the sector’s foreign currency needs.