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mugabe continues to bleed zimbabwe

  1. 4,442 Posts.
    Good for gold price though

    Zimbabwe gold mines face collapse
    HARARE, Nov 03 2008 14:13

    Zimbabwe's gold mining industry, Africa's third biggest nine years ago, is on the brink of "total collapse" because the country's central bank refuses to pay for the gold it buys from the mines, the mines' representative body said on Monday.

    An angry statement issued by the Chamber of Mines of Zimbabwe accused the Reserve Bank of Zimbabwe (RBZ) of "deliberately" ruining the industry.

    Gold mining companies are obliged by law to sell their gold to the central bank, but for the past two years it has been falling behind on payments "due in terms of official policy to be made four days after delivery".

    It now owes more than $30-million to the predominantly-foreign owned mines, some of which had not been paid for a year, the chamber said. Annual production had fallen from 30 tonnes annually in 1999 to a forecast of less than three tonnes this year.

    "This has been happening because the RBZ has failed for pay for gold delivered, resulting in all the mines being unable to sustain production."

    The industry was now "entirely decimated", it said, calling the situation "a travesty of justice".

    RBZ Governor Gideon Gono, one of the key figures in President Robert Mugabe's Zanu-PF party, had rejected repeated requests by the chamber for a meeting, it said.

    Gono has been using central bank money to import thousands of tractors and other agricultural machinery, which are handed out at virtually no charge to members of Mugabe's clique.

    Three months ago, judges were allocated large plasma televisions and senior state doctors were given imported sedans.

    Inflation is running into many millions of percent, the currency has fallen to a fraction of its value in three months and an estimated three million people require food aid.

    Gono's policy of printing money to make up for the shortfall in government coffers is seen a key factor behind the meltdown.

    Zimbabweans had been hoping that Mugabe's agreement in September to share power with the opposition Movement for Democratic Change (MDC) would attract the aid and investment needed for a turnaround. But seven weeks later, the two parties have not been able to agree on the make-up of the Cabinet.

    "It is not understandable that at a time when the country requires as much foreign currency as possible, the gold sector, which can generate foreign currency, has deliberately been brought to its knees," the chamber said.

    Without payment, mines were unable to sustain operations, the Chamber said.

    "Most gold mines are now unable to meet wages and salaries of their employees," the statement said.

    Exploration had completely ceased and most underground mines had flooded, because they cannot pump water seeping into their shafts. - Sapa-DPA
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