November 19, 2018 / 10:09 AM / a month ago

UPDATE 1-Zimbabwe to let gold, platinum mines retain higher dollar earnings

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HARARE, Nov 19 (Reuters) - Zimbabwe will allow gold and platinum mining companies to retain up to 55 percent of their earnings in dollars, government and central bank officials said on Monday, as authorities in the southern African nation move to ensure operators remain viable.

Mining accounts for more than two-thirds of Zimbabwe’s export earnings but the sector has seen some companies close due to a dollar crunch that has hobbled imports of spare parts and other consumables.

Deputy mines minister Polite Kambamura said gold producers that sell their output to a central bank refining subsidiary would now keep 55 percent of their sales in dollars, up from 30 percent previously.

The threshold should gradually increase to 70 percent, he said.

Central bank governor John Mangudya said the U.S. dollar retention levels for platinum and chrome miners had been increased to 50 percent from 35 percent.

“We have made a decision that there is viability in mining by making sure we don’t kill the goose that lays the golden egg,” Mangudya said during the publication of the results of a survey on the state of mining.

Mangudya, without giving details, said the central bank would create a special fund to help mining companies with extra U.S. dollar requirements.

The survey results showed that although mining executives were positive about the industry’s prospects in 2019, they were pessimistic about the government’s ability to maintain predictable and consistent mining policies. (Reporting by MacDonald Dzirutwe; Editing by Dale Hudson)

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