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Metallon Gold sues Zimbabwean authorities for $138 million

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The lawsuits highlight mounting woes in Zimbabwe’s gold industry, a key generator of export revenue, that is been hampered by a shortage of foreign-exchange.

Sunday 19, May 2019

(Bloomberg) --Gold miner Metallon Corporation sued Zimbabwe’s government for switching payments it receives from the central bank to the nation’s fast-depreciating new currency, failing to supply an approved mining lease and not honouring an agreement allowing it to transfer revenue out of the country.

Rival producer RioZim suspended output this year after the central bank failed to provide the foreign currency it needs to keep operating.

Metallon, owned by South Africa-born businessman Mzi Khumalo, said it’s owed $131.7 million because it’s being paid in RTGS dollars instead of US dollars.

The government introduced interbank trading in the RTGS dollar in mid-February, allowing it to depreciate. Metallon is paid at that interbank rate, which is lower than the more commonly used black-market rate

In court documents, Metallon stated that this shortfall arises directly as a result of its client being paid in RTGS currency, adding that it also seeks $5.9 million in damages from the Mines Ministry.

Under Zimbabwean law, miners are required to sell their production through the central bank, which then remits part of the proceeds back to the companies.

 

TAGS : Metallon Corporation, Reserve Bank of Zimbabwe, RTGS dollar , RioZim

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