Zimbabwe miners unfazed by new royalties proposal

PUBLISHED: Mon, 10 Oct 2022 15:47:47 GMT
Nelson Banya
Reuters
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NEW YORK, NY – SEPTEMBER 26: Emmerson Dambudzo Mnangagwa, President, Republic of Zimbabwe delivers a speech at the United Nations during the United Nations General Assembly on September 26, 2018 in New York City. World leaders are gathered for the 73rd annual meeting at the UN headquarters in Manhattan. (Photo by Stephanie Keith/Getty Images)

Oct 10 (Reuters) – Zimbabwe’s miners do not expect any significant impact from the government’s proposal to collect royalties in the form of refined minerals, the country’s Chamber of Mines said on Monday.

President Emmerson Mnangagwa announced on Sunday that Zimbabwe would require companies mining gold, diamonds, lithium and platinum group metals (PGMs) to pay part of their royalties in refined metal rather than cash.

The Chamber of Mines, which represents major mining companies, said it was not worried about the pronouncement because it would not increase existing royalty rates.

“We respect the government’s position. It’s their prerogative. All they are saying is they are changing payment modalities,” Chamber of Mines Chief Executive Isaac Kwesu told Reuters.

Zimbabwe has significant reserves of gold, lithium and PGMs, but an uncertain policy environment, power shortages and currency volatility have hobbled the country’s mining industry.

Foreign companies with operations in Zimbabwe include Anglo American Platinum AMSJ.J, Impala Platinum IMPJ.J, Sibanye Stillwater SSWJ.J, Alrosa ALRS.MM and Caledonia Corporation CALq.L.

Impala said it was working with the Chamber of Mines to understand and respond to the new policy.

“Paying royalties in U.S. dollars and or partly paying in equivalent metal product, on face value, does not materially alter the cost burden in Zimbabwe,” Impala spokesperson Johan Theron said in an emailed response to Reuters.

Caledonia, one of the largest gold producers in Zimbabwe, said it does not expect any significant impact from the change.

“We have not seen the detailed mechanisms whereby this proposal may be implemented, but I do not think it would have any financial or operational effect on our business,” Caledonia Chief Executive Mark Learmonth said in an emailed response to Reuters.

Mineral royalties accounted for 2.8% of Zimbabwe’s tax revenue in 2021, Zimbabwe Revenue Authority data shows.

(Reporting by Nelson Banya; Editing by David Goodman)

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