Thousands of workers at Renco Mine in Masvingo, Dalny Mine in Chakari as well as Cam and Motor Mine in Kadoma have been told to stay home until further notice as the company faces a bleak future due to the unavailability of foreign currency.
The unpaid leave follows two months of unpaid salaries after the mines’ parent company, RioZim, said it was finding it difficult to sustain the business due to failure to acquire money needed to buy chemicals and spares for machinery.
In a letter to the Dalny Mine Workers’ Committee dated October 28, RioZim chief operating officer, Manit Shah says the three mines ‘involuntarily stopped operations after running out of consumables and spare parts’.
He goes on to blame the Reserve Bank of Zimbabwe (RBZ) for failing to release the company’s foreign currency earnings.
“These items are not available in RTGS and in any event when so purchased, costs up to 500% of their real price, making it impossible to acquire them either way.
“Over the past three months, RioZim has received only 14% of its revenue in forex against a Reserve Bank policy of 50% direct forex retention in our nostro account with the other 50% being accessed by application to the RBZ. The company was thus unable to adequately purchase sufficient supplies required to operate our mines optimally.
This situation recently further deteriorated to an extent where the company received almost zero forex in the past 9 weeks preceding the closure of the mines. Our finance department has estimated that until September 2018, the Company lost up to $75m as a result of these breaches by RBZ,” part of the letter reads.
Shah also goes on to say he could not promise when the mines will be reopened as the situation was now beyond the company’s control.
“We understand that all of you want to know the exact date when the operations will restart. We understand and respect for concern and need for certainty (sic). It is sadly not possible to predict a date as the result of these engagements are beyond the control of the company,” he says.
RioZim was one of the biggest producers of gold in Zimbabwe, and the company sold its mineral to Fidelity Printers which is owned by RBZ.
Prior to the crisis, the three mines were said to be producing around 70kg of gold per week, translating to some 280kg of gold monthly.
For the past two months, however, they have been failing to pay salaries and this will be the third month.
TellZim News spoke to the Minister of Mines and Energy, Winston Chitando who admitted that government, through RBZ had failed to remit all of the gold miner’s foreign currency earnings.
“Today I have started talks with RioZim. The Reserve Bank of Zimbabwe needs to come on board and see how we can face this challenging situation. I can’t say further than this but I can assure you that talks are in progress and very soon the problem will be addressed,” Chitando said.
Ordinary employees at Renco Mine, however, said they suspected management of misappropriating funds and engaging in other corrupt activities.
“It is only this time and this year that we have seen these machines at the plant shut down. The plant was always up and running but we are now being told that there are no chemicals like borax and acid,” said one employee.
RioZim had previously threatened to sue the RBZ over foreign currency allocations, claiming its mines were productive and earning foreign currency most of which was not being released to the company.