Zimbabwe’s mining output is under threat because banks are delaying processing foreign payments by up to three months due to a shortage of dollars, the southern African country’s mining chamber warned on Monday.
Mining generates more than half of Zimbabwe’s foreign exchange and should be given priority by the central bank when making offshore payments, Chamber of Mines economist Pardon Chitsuro told a parliamentary committee.
Zimbabwe introduced a so-called bond note currency, which is denominated in U.S. dollars, in November in a bid to ease cash shortages, but long queues continue outside banks while U.S. dollars are slowly disappearing from circulation.
Some businesses, especially those importing goods, are offering discounts on cash purchases in U.S. dollars, while charging more for mobile or card transactions.
Mining companies need to import machinery and inputs such as explosives and chemicals.
Importers say they are struggling to pay for goods abroad because accounts held by local banks overseas have been depleted of foreign currency.
“We have been facing a foreign payments gridlock with delays of up to 12 weeks impacting negatively on production,” Chitsuro said.
The world’s two largest platinum producers Anglo American Platinum and Impala Platinum have operations in Zimbabwe, alongside local firms Bindura Nickel and Hwange Colliery Company.
Bankers Association of Zimbabwe president Charity Jinya acknowledged the delays, which she blamed on a lack of dollars and depleted offshore accounts of local banks.
Last month, the central bank said Zimbabwean banks only had enough cash in offshore accounts to finance about two weeks’ worth of imports.
Zimbabwe needs an average $430 million a month to pay for imports, according to central bank figures for 2016.
(Reporting by MacDonald Dzirutwe; Editing by Alexander Smith)