CAPE TOWN, South Africa – Mines Minister Winston Chitando on Monday said the central bank governor would soon introduce a monetary policy tool to alleviate foreign currency shortages that have affected mining companies.
Zimbabwe is hoping its mining sector could help drive a moribund economy buffeted by high inflation and unemployment, as new President Emmerson Mnangagwa looks to woo investors following a 2007 coup which usurped former president Robert Mugabe.
But a shortage of cash has hurt industries, with Zimbabwe’s gold miner RioZim last year closing its three mines due to a shortage of dollars.
“One of the current challenges which the industry is facing relates to foreign currency retention… The governor will over the next week or two come up with monetary policy intervention which would address that issue,” minister Chitando said in a presentation on the sidelines of a mining conference.
“The issue of foreign currency is being addressed as we want to ensure the mining industry continues to grow,” he said.
Chitando did not want to be drawn on what this intervention would be but said the government was also revamping policies for specific minerals, such as lithium and platinum, in a bid to improve investment.
Last month, Russian diamond miner Alrosa and China’s Anjin Investments were selected by Zimbabwe’s government to partner with the state diamond company, a state-run newspaper reported.
“At the end of the day it is an issue of balancing the needs of investors with the needs of the country… The issue of policy clarity and policy consistency is absolutely top,” Chitando said.