Zim 2013 mining royalties fall below target

Published: 09 April 2014

Zimbabwe last year achieved only 54,6 percent of targeted royalties from the mining sector.

According to official figure cited in the African Development Bank (AfDB)'s latest Zimbabwe Monthly Economic Review, the country's 2013 mining royalties amounted to $133,7 million.

Although the figure was a slight decline from the $134,4 million recorded in 2012, it was way below the initially set target of $245 million for last year.

Gold-mining companies in Zimbabwe pay 7 percent in royalties while diamond and platinum miners pay 10 percent.

However, platinum miners also pay an additional levy of 15 percent on unprocessed platinum shipments.

Observers attributed the decline in royalties to the poor performance of international commodity prices during the last half of the year 2013.

However the outlook for this year is much improved as the price of Platinum Group Metals (PGMs) have started the year on a positive note and are expected to rise going forward due to the ongoing platinum strike in South Africa, and the Ukraine crisis. South Africa, Zimbabwe and Russia are the world's top platinum producers.

Gold on the other hand has been on the up largely due to the Ukraine crisis as investors see it as a safe-haven, as the conflict in Europe has been affecting currencies. The yellow metal had as at the end of March rebounded 13 percent.

AfDB expects Government's reviewing of its fiscal policy with regards to mining royalties to improve the attractiveness of Zimbabwe's minerals sector.

"Meanwhile, Government is in the process of repealing the amendment of the fiscal law that stops mining companies from claiming royalties for tax purposes, a move likely to attract new investments," said the regional financier.
- BH24