Zimbabwean miners ordered to deposit export earnings with local banks

Zimbabwean miners ordered to deposit export earnings with local banks
Published: 19 March 2012 (1597 Views)
HARARE - Zimbabwe has ordered foreign mining firms to deposit their export earnings with local banks, state media reported on Sunday, the latest government move to exert pressure on miners as it tries to address the dollar crunch afflicting its economy.

Mines Minister Obert Mpofu told the Sunday Mail that cabinet last week had decided to tell mining companies to bring back earnings from their Zimbabwe operations which were deposited in offshore accounts.

"We have been liberal. It does not make sense that mining companies are operating in the country and keeping money in offshore accounts," Mpofu told the Mail.

"An order has been issued and they should all bring the money back into the country because the economy is now dollarised."

Zimbabwe's unity government has managed to stabilise the economy, which grew by 9.3 percent in 2011 and is set to grow by a further 9.4 percent this year according to official figures, but the country is battling an acute dollar shortage.

Zimbabwe adopted the use of foreign currencies, mostly the U.S. dollar and South African rand in 2009, after its own unit was destroyed by hyperinflation that reached 500 billion percent in December 2008.

Foreign miners operating in the country have also come under increasing pressure from the Zimbabwean government to turn majority shareholdings over to local black businesses under the country's controversial empowerment law.

Last week, Impala Platinum, the world's second-biggest platinum producer, bowed to pressure and said it would surrender a 51 percent stake in its Zimplats unit to local black investors.

The world's largest platinum producer, Anglo American Platinum, and Rio Tinto, which runs a diamond mine, are some of the major international firms operating in Zimbabwe.

SHUTDOWN

Long-ruling President Robert Mugabe, who was forced to share power with his rival Prime Minister Morgan Tsvangirai three years ago after disputed elections, is championing the empowerment drive, which has sharply divided the coalition government.

Tsvangirai has said the empowerment crusade is undermining the recovery of an economy whose decline by as much as 50 percent between 2000 and 2008 is blamed on Mugabe's policies such as seizure of white-owned commercial farms to resettle landless blacks.

Finance Minister Tendai Biti last week warned the government faces a shutdown if projected diamond revenues do not materialise.

The government expects $600 million revenue from diamonds to bolster its $4 billion 2012 budget.

- Reuters

Tags: Mining, Earnings,
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