Zimbabwe's ongoing economic meltdown has left its mining companies facing a crisis, according to the country's mining chamber.

Up until recently, mining had avoided the recession affecting other industries in Zimbabwe and was continuing to attract foreign investors to the extent that it accounts for 50 per cent of the country's revenue from exports, with platinum group metals (pgms) proving particularly successful.

However, according to the Chamber of Mines the distorted exchange rate and heavy borrowing are now set to hit the mining industry.

Non-gold metals mining companies are legally bound to pay a third of their earnings derived from abroad to the central bank at a rate of Z$250 to the greenback, compared to a black market rate of Z$16,000.

In these conditions, black marketeers have been charging punitive rates for their services.

News of the mining chamber's predictions comes as industry heads have also expressed fears that the demands of complying with new empowerment laws will hit profit performances.

However, representatives from Zanu PF have forecasted that the industry is set to grow by 4.9 per cent in 2007.

Sources: Exchange rate knocks Zimbabwe mining
13/04/07
http://www.busrep.co.za/index.php?fSectionId=&fArticleId=3777953

Zimbabwean exchange rates cripple mining companies
12/04/07
http://www.mineweb.net/mineweb/view/mineweb/en/page504?oid=19400&sn=Detail

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