Miners in Zimbabwe have been forced to hand over over US$1billion to the Reserve Bank of Zimbabwe through the contentious surrender requirements portion.
Mining executives have warned that the situation has triggered forex shortfalls thereby affecting expansion plans.
The tough retention regime compels the mining companies to surrender 40% of their mineral exports forex earning to the RBZ, which is liquidated into Zimbabwe dollars at the prevailing official exchange rate.
Experts say, the surrender portion was crippling the miners as the contentious surrender requirements resulted in the miners retaining only 60% of their export proceeds.
This falls short of their operational requirements.
“Statistics show that about US$1bn was liquidated (from the mining sector) between January and October 2022. This is going towards an auction system, which is supplying the whole economy,” Reserve Bank of Zimbabwe governor John Mangudya said at the launch of the State of the Mining Industry report on Wednesday.
The miners were initially forced to hand over all unutilised export proceeds after 60 days.
But, RBZ scrapped the compulsory requirement in January this year.
Instead, the central bank increased the surrender threshold to 40% from 30% with the apex bank saying this would fund the forex auction system.
The mining sector responsible for more than two-thirds of Zimbabwe’s foreign currency revenue, already face increased demand for payment in foreign currency from several service providers.
The mining industry seeks a review of the retention threshold and has been negotiating with the RBZ saying exporters are disadvantaged.
They are seeking a foreign currency retention levels of about 80%.