Zimbabwe Stock Exchange listed mining giant, RioZim Limited has reportedly failed to import key consumables and spares into the country due to lack of access to foreign currency resulting in the company opting to take the expensive route of procuring locally.
Zimbabwe has experienced a serious foreign currency crisis which has resulted in corporates getting their forex on the parallel market at premium rates.
According to the group chairman, Lovemore Chihota, premium being charged by local forex suppliers has significantly affected RioZim operations.
“The inability to import key consumables and spares directly due to a lack of access to the foreign currency that we generated led to the procurement of expensive consumables locally and as a result, certain costs escalated significantly.
“This was mainly due to the premium being charged by local suppliers as the purchasing power of the RTGS kept dropping significantly. The premiums charged often exceeded 100%,” said Chihota.
In its results for the year ended 31 December 2017, RioZim revenue grew by 36% to US$88.9 million from US$65.2 million achieved in the prior year. This was on the back of an average gold price of US$ 1 255/oz when compared to US$ 1 251/oz achieved in 2016.