Zim mines 'close to collapse'
2008-11-05 15:54
Special Report
A classical music presenter for the BBC has been arrested and is in custody in Zimbabwe.
Harare - Zimbabwe's cash-strapped central bank owes private gold mining companies $30m, leaving a key industry on the brink of collapse, the independent Chamber of Mines said.
By law, all gold produced in Zimbabwe is sold through the Reserve Bank. But the bank has failed to pass on earnings to the mines, in some cases since late 2007, the chamber, representing mining firms, said in a statement this week.
The chamber said that has meant gold production fell to about 265 kilograms a month, down from a peak of 2.2 tons a decade ago, losing the nation an average of $54m a month at current world gold prices.
"It is not understandable that at a time when the country requires as much foreign currency as possible, the gold sector has been deliberately brought to its knees," the chamber said, calling for decisive action "to save what is left of the gold industry from total collapse".
The central bank did not immediately comment.
Zimbabwe faces chronic shortages of local money and the world's highest official inflation of 231 million percent. On Wednesday, the central bank issued a new 1 million Zimbabwe dollar bank note, worth $10 or €8 at the dominant black market exchange rate.
The Confederation of Zimbabwe Industries, representing most manufacturing firms, has accused the central bank of raiding corporate bank accounts and forcing firms to hand over hard currency reserves as loans to the government.
International aid agencies say they face long delays when they try to withdraw funds after depositing foreign currency in Reserve Bank accounts. Earlier this week, the Global Fund to Fight Aids, Tuberculosis and Malaria said $7.3m of the $12.3m it deposited into its Reserve Bank account last year did not go to fight the three diseases. The fund has demanded Zimbabwe return the money.
The government has been spending on items like tractors and other farming equipment given to party loyalists of President Robert Mugabe.
Fuel, electricity, water, food and most basic goods are, like cash, in short supply. Water outages, the worst in recent months, struck business and residential districts across the capital on Wednesday as health authorities battled to control a cholera outbreak that has killed at least 130 people.
- AP