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Zimbabwe Squeezes Mining Companies

Mining companies in Zimbabwe said a central bank requirement compelling them to surrender more foreign exchange earned from mineral exports will push their operations to the brink. The Reserve Bank of Zimbabwe announced on January 8 that exporters must hand over 40% of their foreign currency earnings, up from 30%, which is then paid out in the local currency. The country’s mining body said the move would create “a viability crisis” for the industry as members already face increased demand for payment in hard currency from various government agencies, suppliers and service providers. The move could lead to lower output, and the suspension of exploration, maintenance and expansion activities, including investment in power projects, the chamber said. The country generates more than half its foreign exchange via mineral exports from companies that include the local units of Impala Platinum and Anglo American Platinum.

SOURCE: AFRICAN MINING MARKET