Zim govt to lower mining royalties

Published: 06 December 2013

THE Government intends to lower royalties from mineral sales mainly for gold miners in a bid to shore up deliveries and resuscitate Fidelity Printers and Refiners. In 2012, Government pegged royalties for gold at 7 percent, platinum 10 percent and diamonds at 15 percent.

Official figures from the Chamber of Mines show that the mining industry in the six months to June this year has paid $81,1 million in royalties.

Mines and Mining Development Minister Walter Chidhakwa told an on-line publication that Government was concerned that the yellow metal still continued to find its way to the black market and subsequently exported to other countries.

"We will be reviewing royalties so that we can attract gold into our system and Fidelity can start working on gold for refinery purposes," he was quoted as saying.

Fidelity Printers and Refiners, a subsidiary of the Reserve Bank of Zimbabwe closed shop in 2008 when deliveries of gold fell to three tonnes.

As a result of low deliveries, Zimbabwe was suspended from the London Bullion Market.

Minister Chidhakwa said lowering of mining royalties would help the sector recover.

"On other minerals there is agreement on the concept of reducing royalties but we have not settled on the numbers. The final decision will be in the budget statement."

Zimbabwe's gold output is expected to increase to 17 tonnes this year from 15 tonnes in 2012.

In 1999, the country's gold sector reached its peak producing 27 tonnes of the yellow metal with the small-scale mining sector contributing 60 percent of the total output.

The mining sector is one of the country's major economic drivers which experienced an average growth of 19,9 percent between 2009 and 2012.

Between 2009 and 2012, the sector's contribution to the Gross Domestic Product increased from 4 percent to 16 percent.

- chronicle