Mining royalties dip 45%

Published: 29 January 2014

Zimbabwe's mining royalties slumped by 45 percent to $133,7 million against a target of $245 million in the full year to December 2013, casting further doubt on the country's 2014 economic projections.

Sternford Moyo, the Zimbabwe Revenue Authority (Zimra) chairperson said the decline in mining royalties was due to challenges faced by government last year in auctioning diamonds on the international market.

"The removal of sanctions on diamond mining firms, including the Zimbabwe Mining Development Corporation (ZMDC), will see the nation realising more revenues from royalties on diamonds," he said.

Moyo noted that the recent greenlight given to Zimbabwe to auction its gems at Antwerp in Belgium will enable the nation to realise more revenue from diamonds.

The southern African country has the world's second-biggest platinum and chrome deposits after South Africa and also has large deposits of diamonds, gold, coal, nickel and iron ore.

Over the past few years, Zimbabwe's cash-strapped government - faced with a bloated civil service wage bill and a possible budget shortfall this year - has been relying on mining companies to boost its coffers through raising taxes on miners.

Gold-mining companies in Zimbabwe pay seven percent in royalties and diamond miners pay 10 percent.

Platinum miners also pay 10 percent but face a further 15 percent levy on unprocessed platinum shipments.

The country's economy - anchored on the mining sector - is expected to grow by 6,4 percent this year, however economic experts say the target is highly ambitious and not achievable.

Last week the World Bank tempered Zimbabwe's 2014 growth prospects as the outlook remains increasingly uncertain due to a host of internal and external factors.
- dailynews