USD payments for chrome miners

Source: USD payments for chrome miners | The Herald July 25, 2019

USD payments for chrome miners

Ishemunyoro Chingwere Business Reporter

CHROME miners will, with immediate effect, get US Dollar payment for their deliveries following Reserve Bank of Zimbabwe’s (RBZ) refining of Statutory Instrument (SI) 142 of 2019.

The announcement was made yesterday through Exchange Control circular number 8 of 2019 which tweaked some aspects of SI 142 as the bank continues to explore ways to further liberalise the foreign exchange market.

SI 142, also known as Reserve Bank of Zimbabwe (Legal Tender) Regulations, was promulgated in June and its net effect was to outlaw the multi-currency system which had been in operation for a decade and replaced it with a mono currency – the Zimbabwe dollar.

But after additional consultations to further liberalise the foreign exchange market, the RBZ announced that chrome miners – particularly small-scale miners who sell their produce to local smelters, can now be paid in foreign currency.

The sector had been left out by provisions that entitled the rest of exporters to foreign currency payment as they were selling their produce locally to smelters who would then send it on to the foreign market.

“In order to enhance the operations of this critical sector which is dominated by small-scale miners, with effect from July 24, 2019, large-scale chrome producers and smelters may pay for chrome deliveries from small scale miners through Nostro FCA transfers,” said the RBZ in a statement.

“The small scale chrome producers are therefore, required to open Nostro FCA (Export) for purposes of receiving payment for chrome deliveries. No cash pay-outs are allowed, payments will be done only through bank transfers.

“In this regard, large-scale chrome producers and smelters who wish to pay for chrome deliveries from small scale producers in foreign currency, shall submit applications for operation of a Nostro FCA (Transitory) to Exchange Control, Exports Department for consideration,” reads the statement.

The move is expected to give fresh impetus to Government’s plans to grow the chrome sector and its sub-sector.

Chrome, together with diamonds, gold and platinum are the minerals expected to drive Government’s 2023 target of reaching US$12 billion worthy of exports up from US$3, 2 billion achieved last year.

On beneficiation, Government is targeting to increase ferrochrome production from 370 000 tonnes produced last year to 450 000 tonnes this year. Plans are also afoot for this to be further boosted to 2 million tonnes per annum by 2023 and Government has noted increasing smelting capacities at various private smelters.