• FINANCE FORUM
Will the currency sale proceeds of mined resources be allowed to be retained abroad to finance imports of equipment , or will the Central Bank take possession of the currency ?
• Sale proceeds on mined resources are not allowed to be retained abroad but are required to be repatriated into the country within 90 days from date of export .
• Prior EXCON approval is required to retain export proceeds offshore .
• Currently export proceeds are retained by the exporter at a level of 60 % in the exporter ’ s nostro account and can be used to finance the company ’ s import requirements ; the amounts can be retained in the nostro account indefinitely .
• The balance of 40 % is sold to the Central Bank in exchange for local currency ; this portion of foreign currency is pooled into the Auction Market , mainly to finance non-exporters .
Is the banking sector strong enough to manage a large mining company account inclusive of them being able to enter into foreign currency transactions ?
• The Zimbabwean banking sector handles probably one of the biggest , outside South Africa , mining portfolios , with the top four banks handling not less than 80 % of big mining houses ’ business .
Can the banking sector assist in arranging syndicated loans and in both local and foreign currency ?
• While syndication amongst Zimbabwean banks has not been very common for a number of years , surely a viable and large-scale transaction can always bring the possibility of such collaboration into play ; already banks share risk , though on an informal basis , on a number of big ticket transactions .
• The top four banks can syndicate a minimum of USD75-million for single projects .
How efficient and stable is the banking system ? The banking sector hasn ’ t experienced systemic failure for more than 10 years , with banks set to meet the respective capitalisation thresholds by December 2021 .
Do the banks comply with the latest BASEL IV rules as well as the Anti-Money Laundering rules ?
• All banks in Zimbabwe comply with BASEL and AML rules .
• The country ’ s banks are currently implementing BASEL III with the assistance of the Central Bank , while BASEL IV is still at consultation level , since most of the changes are not affecting the local market .
• In respect of AML , banks have a full range of tools and systems that ensure that onboarding of clients and settlement of cross border payments are subjected to best practice screening .
• The Central Bank also carries out periodic inspections on banks to ensure that there is total compliance and any infractions of rules are remedied in good time .
Are banks sufficiently capitalised to manage large currency transactions ?
• Banks are set to meet new capital requirements by December 2021 – Tier 1 banks have a set target of USD30-million , local currency ( ZWL ) equivalent .
• In the event that a particular transaction is sizeable to the extent that individual banks or as a collective , are not able to carry it on their balance sheets , there is always the option of securing offshore lines of credit .
What protection will investors have with regards appropriation without compensation regarding their ownership of a mine ?
• FDI is adequately protected by law and there are robust legal processes available to investors in the event that such eventualities materialise .
• All FDI are registered through ZIDA , which also provides for protection of investors ’ rights regarding their title to mining property .
Will foreign workers / experts be allowed to temporary stay in Zimbabwe and work on the mine , and thereafter be allowed to repatriate all their assets when they leave ?
• At the time of registering with ZIDA , temporary resident permits are availed to foreign specialist skills .
• Expatriates are allowed to remit upkeep to their families offshore , a total amount that does not exceed 1 / 3 ( a third ) of their monthly basic salary income plus allowances .
• At the end of their stay , and if they have acquired assets in line with their residency status , foreign workers will be able to repatriate their assets at the end of their legal stay , subject to prior exchange control approval .
• Exportation of household effects require completion and submission of the requisite documentation which the bank will provide as and when it is relevant . •
40 • African Mining • February 2022 www . africanmining . co . za