Government avails $6m for RHA Tungsten project

GOVERNMENT has deposited $6 million into RHA Tungsten mine’s bank account as part of its commitment towards an investment envisaged to revive production at the Matabeleland North-based mine.

AIM-listed Premier African Minerals holds 49 percent interest in RHA Tungsten mine while the Government through the National Indigenisation and Economic Empowerment Fund (NIEEF) controls the remaining 51 percent threshold.

Recently, Premier African Minerals announced that it had signed an agreement with NIEEF that would see the Government advancing $6 million for production to commence at the RHA Tungsten project in Hwange this year.

Last Monday, Finance and Economic Development Minister Professor Mthuli Ncube announced Statutory Instrument 142 of 2019 which removed the multi-currency system in Zimbabwe replacing it with a local unit of account (RTGS$/ZWL) for transaction purposes and the move was taken to bring normalcy into the economy.

In a statement last week, Premier African Minerals announced receipt of the investment from Government.

“Premier African Minerals Limited is pleased to report the receipt of RTGS$6 million, a portion of the investment the NIEEF has undertaken to provide to RHA Tungsten Private Limited to assist in potentially bringing RHA back into production,” said the mining group.

It is hoped that the RTGS$6 million investment will bring back RHA Tungsten Private Limited into production without any further financing requirement from Premier.

Premier African Minerals chief executive officer Mr George Roach was quoted as saying:

“It was widely reported on June 24, 2019 that Zimbabwe had effectively adopted its own currency and that legal tender in the domestic environment now excluded the direct use of all foreign currencies.

“This policy directive by the Reserve Bank of Zimbabwe has affirmed that the RTGS dollar will be Zimbabwe’s sole legal tender.

“In this context, RHA has now received a remittance of RTGS$6 million that has been credited to RHA’s bank account.”

He said while the group expects an adjustment to various of the quoted anticipated expenditure items that need to be met to bring RHA back to full production, they also expect that much of the expenditure will now remain at 1:1 RTGS conversion against the US dollar.

“Examples of this include debt, including RHS’s bank overdraft (currently underwritten by Premier), as well as other local debts that can potentially be settled from this remittance.

“Uncertainty remains in regard to items that will need to be supplied from outside Zimbabwe, as well as the exact cost of electrification which is an essential requirement for RHA.

“We are pleased that the Ministry of Industry, Commerce and Enterprise Development have assured us that NIEEF intends to work closely with RHA to ensure solutions to these challenges are found,” he said.

Mr Roach said in the interim his organisation will re-evaluate how best they can commence with the process of bringing RHA back into production as expeditiously as possible.

“I look forward to providing the market with further update as we progress. Further commentary on the introduction of the RTGS dollars is being included in Premier’s annual accounts for the year ended December 2018 that we expect to publish later tomorrow (last Friday),” he said. —–chronicle.co.zw