eBusiness Weekly
Golden Sibanda
Listed resources group, RioZim, is pressing ahead with litigation against the Reserve Bank of Zimbabwe (RBZ) to recover US$100 million for gold deliveries made to the bank since 2016, although the Apex Bank recently cleared part of the outstanding payments.
The RBZ is Zimbabwe’s sole gold buyer, through its subsidiary Fidelity Printers and Refiners. The Reserve Bank’s policy is that it pays 55 percent of the value of gold deliveries in hard cash and the balance in local unit.
Previously and until the monetary policy statement, which was delivered on the 20th of this month, the threshold for payment in hard currency was 30 percent while the balance was paid in local currency.
RioZim is among a host of gold producers whom the central bank had not paid last year for deliveries to its gold buying unit, resulting in accumulated debt to RioZim of nearly US$100 million.
RioZim last month suspended operations for the second time in four months after the central bank failed to pay for gold delivered to Fidelity Printers and Refiners.
Company secretary Peter Makore is on record saying that gold earnings constitute 90 percent of the group’s total revenue, and stoppages of the three mines under RioZim had a material impact on performance.
RioZim operates Renco Mine in Masvingo, Cam and Motor in Kadoma and Dalny Mine in Chegutu, which it briefly shut down due to the non-payment for gold deliveries.
“The company has experienced significant and persistent delays in payment of its foreign currency allocation for deliveries made to Fidelity Printers and Refiners since December 2018 and this has severely affected the viability of the company’s operations,” RioZim said early this month.
A few days later, RioZim issued a statement saying an agreement had been reached with the RBZ for the miner to receive all payments due to it for gold deliveries to Fidelity Printers.
Litigation for earlier outstanding payments persist
And so the mining group has filed claims through the High Court to recover outstanding payments for the bullion deliveries, stretching as far back as 2016.
Highly placed sources at RioZim said the litigation to recover outstanding dues, with an average of 15 percent having been settled in hard currency during the period under review, will not be suspended or withdrawn.
This is despite the fact that the central bank has cleared virtually all outstanding payments for bullion deliveries the Zimbabwe Stock Exchange (ZSE) listed miner made since December 2019.
It also emerged this week that while the central bank had violated its own payment policy of paying 55 percent of the value of deliveries in hard currency, it has also not been able to meet all its obligations in terms of payments of the local currency component.
No comment could be obtained from RioZim chief executive Bheki Nkomo, but a highly placed source told Business Weekly that while an agreement had been reached over payments for the latest deliveries, litigation over earlier unpaid deliveries would continue.
“We reached an agreement with the Reserve Bank and they have since cleared all payments for deliveries in the last 10 to 11 months. We cannot reveal how much they have paid because it was part of the conditions we agreed that we will not reveal the figures.
“However, they cleared everything that was owing from the last deliveries, but they have not paid for what was owing earlier before we closed operations in January (as well as sometime last year) and for that we are suing the RBZ,” the source, requesting not to be named, said.
RioZim has previously said it could not utilize most of the foreign currency that it generated externally in order to meet its operational requirements after it only received and was given access to US$26 million.
The miner was entitled, in terms of exchange control directive RR101/2016, to receive and access from Fidelity Printers and Refiners US$84 million, which equaled 50 percent of its export proceeds.
The funds were to be kept in Fidelity Printers and Refiners’ nostro account.
