Shortage of foreign exchange in Zimbabwe is dealing a huge blow on the country’s mining asset, Gold.
The billion dollar gold mining industry is crucial for its economy’s sustenance.
Already, one of its biggest producers, Metallon Corp. has halted output at three of its four mines and is also considering selling the operations over $200m debt.
According to Zimbabwean law, this shortage in forex forces producers to sell their metal to the central bank, which only allows companies to retain a portion of their export proceeds.
The company has since placed three of its mines — Mazowe, Shamva and Redwing – under care and maintenance as debts mount.
It suspended operations after a group of workers applied to have business-rescue measures implemented at two of its mines.
Zimbabwe’s only gold reserves are valued at over $500,000. It produced about 13 tonnes of gold last year, well below its all time record of 29 tonnes in 1998.