Implats Requests Meeting with Zimbabwe Government Regarding Forex Retention Rules

Implats has requested a meeting with Zimbabwe’s President to discuss forex retention rules that hinder investment. The Reserve Bank increased dollar receipt retention to 70%, raising operational costs. Implats highlights the need for improved forex access and is reviewing its investment portfolio due to ongoing economic challenges.

Impala Platinum Holdings Limited (Implats) has sought a meeting with Zimbabwean President Emmerson Mnangagwa to address concerns regarding foreign exchange retention rules that hinder the company’s investments in Zimbabwe. The Reserve Bank of Zimbabwe recently escalated the retained dollar receipts to 70%, up from 75%, exacerbating the costs associated with foreign exchange as transactions are conducted at local exchange rates.

Nico Muller, CEO of Implats, expressed the company’s concerns, emphasizing the importance of addressing forex access with both the Zimbabwean government and Finance Minister Mthuli Ncube. He stated, “It is not something I want to scrub under the carpet.” Additionally, Implats’ 85%-owned Zimplats has had to secure loans for capital expenditures due to insufficient dollar receipts. CFO Meroonisha Kerber highlighted that borrowing in Zimbabwe is economically prudent given the context of self-funding requirements for all operations.

Moreover, Implats is reviewing its portfolio should the prices of platinum group metals continue to decline, with Muller citing the Canadian Lac des Iles mine and Marula as particularly vulnerable assets. He noted that Marula has a limited reserve life and requires further investment, which had been suspended the previous year. Cost reductions have already been implemented, leading to near completion in corporate overhead cuts, thus directing attention towards portfolio decisions.

Implats has made significant investments in the processing capabilities of Zimplats and remains optimistic about the investment climate in Zimbabwe. Muller remarked, “We do believe the Great Dyke offers the best available resource out there,” reaffirming the company’s longstanding constructive relationship with the Zimbabwean government.

In conclusion, Implats is actively engaging with Zimbabwean authorities to address concerns related to foreign exchange regulations that impact investment capabilities. The company is looking into strategic decisions due to vulnerable assets in its portfolio and remains committed to its operations in Zimbabwe, recognizing its resource potential while navigating economic challenges. A constructive dialogue with the government is viewed as crucial for future endeavors.

Original Source: www.miningmx.com