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Zimbabwe mining firm to sue central bank for defaulting on forex payment
Last Updated: 2018-10-10 13:37 | Xinhua
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Mining firm RioZim said Tuesday it plans to sue the Reserve Bank of Zimbabwe (RBZ) for failing to pay part of its gold output in foreign currency as per its policy.

The company said the unavailability of the foreign currency earnings was impacting negatively on its operations.

According to the RBZ policy introduced in 2016, gold producers were to receive 50 percent of their receipts in foreign exchange and the remaining 50 percent through electronic transfers of the local bond notes.

But beginning Oct. 1, the RBZ reduced the 50 percent payment in actual U.S. dollars to 30 percent.

RioZim said since 2016 to date, it had only been allocated an average of 15 percent of the foreign currency it generated.

"The impact of this on the company's operations has been that the company is unable to pay its external suppliers and consequently, the company's costs have escalated as the price of locally available consumables and spares has increased exponentially," the company said in a cautionary statement.

All gold producers sell their gold to state firm Fidelity Printers and Refiners, who in turn export the metal.

RioZim said it had engaged the RBZ on numerous occasions over the matter but had made minimal progress.

"Therefore, in addition to the other measures that the company is considering to address the situation, the company has proceeded to formally serve the RBZ with its notice of its intention to file legal proceedings against the RBZ for a claim demanding that the central bank complies with its directives and policies, and also for compensation for any losses that the company has suffered as a result of the central bank's non-compliance with its directives from 2016 to date," RioZim said.

Zimbabwe is grappling worsening cash and foreign currency shortages that have crippled importation of essential commodities such as fuel and medical drugs.

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