RBZ subsidiary moves to block RioZim production suspension

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By Alois Vinga

RESERVE Bank of Zimbabwe (RBZ) subsidiary, Fidelity Printers and Refineries has stepped in to block plans to suspend production by diversified resources group, RioZim.

In a recent update, the mining firm’s official, Per Chiurayi revealed they were currently in discussions with FPR which may result in the extension of foreign currency payments.

“Shareholders are advised that the company has received a part payment towards the US$ and ZW$ amounts due to it from FPR for gold deliveries made. Discussions regarding payment of the long-overdue sums are still in progress.

“It is, therefore, the company’s hope that the issue can be resolved expeditiously to capacitate the Company to meet its operational expenditure requirements,” reads the update.

However, Riozim bemoaned that the amounts which have been paid are insignificant.

The update follows early communication last month confirming the company was forced to stop gold production due to its inability to buy essentials and was actively considering all its gold mines on care and maintenance until a viable solution was found.

RioZim bemoaned the static foreign currency retention policy which entitled miners to access 70% of their gold proceeds in foreign exchange in their Nostro Account and balance of 30% in Zimbabwean dollars at the then prevailing fixed interbank rate.

The company said it is owed US$2.4 million and ZW$66 million by FPR which accumulated over gold deliveries which have not been paid for.

However, in a climb down this week, the company said it was confident payments will be received eventually but underscored that delayed payment was placing enormous financial strain on the company.

“Accordingly, shareholders are advised to continue exercising caution when dealing in the Company’s securities until an announcement to the contrary is made,” further reads the update.