Zimbabwe Government Slashes Mining Fees
November 27, 2015
Martin Kadzere Senior Business Reporter
Zimbabwe Herald
ZIMBABWE plans to further cut mining fees and charges next year to enhance viability and attract more foreign investment in the sector, Finance and Economic Development Minister Patrick Chinamasa said.
Government has over the past few years been reducing overall mining fees and charges, some have remained relatively high compared to those obtaining in the region, hence increasing costs, an impediment to new investments, Minister Chinamasa said during his presentation of the 2016 National Budget in Parliament yesterday.
The new fees and charges take effect from January 1 next year. Mining remains one of the key sectors sustaining the country’s economic growth, contributing an average of 16 percent to national output and 52 percent to export earnings.
“To encourage investment in prospecting and exploration activities and also enhance the viability of mining, a further review of selected mining fees and charges will be undertaken in consultation with the Ministry of Mines and Mining Development,” said the minister.
“Mining houses also face additional fees and charges to other Government agencies that include the Environmental Management Agency, the Radiation Protection Authority, as well as rural district councils.
“All such fees and charges will be rationalised in the context of the proposed new mining fiscal regime.” Minister Chinamasa said miners had approached Government seeking a cushion especially in this period of low international commodity prices, through a review of royalties and fees.
He said the Government was looking at the proposals to balance the interests of mining investors and those of the fiscus in the context of the proposed new mining fiscal regime. A legal framework that balances the various taxes and fees vis-a-vis their operational viability is being finalised and will go through Government approval processes pending enactment of a Bill by June next year.
Minister Chinamasa said with gold output expected to reach 18,7 tonnes this year and 20 tonnes next year, there was need to put in place incentives to encourage production. As such, the minister reduced royalty fees for primary gold producers from five percent, on an incremental output basis, to three percent with effect from January 1 next year.
The mining sector is expected to grow 2,4 percent next year on the back of planned investments and strong performance of gold, chrome, coal, nickel, platinum and diamonds. In June, the Government lifted a ban on chrome ore exports. Production of the mineral is expected to double next year while diamond output is also projected to rise.
Mineral exports are projected to earn $1,89 billion this year and close to $2 billion next year.
Martin Kadzere Senior Business Reporter
Zimbabwe Herald
ZIMBABWE plans to further cut mining fees and charges next year to enhance viability and attract more foreign investment in the sector, Finance and Economic Development Minister Patrick Chinamasa said.
Government has over the past few years been reducing overall mining fees and charges, some have remained relatively high compared to those obtaining in the region, hence increasing costs, an impediment to new investments, Minister Chinamasa said during his presentation of the 2016 National Budget in Parliament yesterday.
The new fees and charges take effect from January 1 next year. Mining remains one of the key sectors sustaining the country’s economic growth, contributing an average of 16 percent to national output and 52 percent to export earnings.
“To encourage investment in prospecting and exploration activities and also enhance the viability of mining, a further review of selected mining fees and charges will be undertaken in consultation with the Ministry of Mines and Mining Development,” said the minister.
“Mining houses also face additional fees and charges to other Government agencies that include the Environmental Management Agency, the Radiation Protection Authority, as well as rural district councils.
“All such fees and charges will be rationalised in the context of the proposed new mining fiscal regime.” Minister Chinamasa said miners had approached Government seeking a cushion especially in this period of low international commodity prices, through a review of royalties and fees.
He said the Government was looking at the proposals to balance the interests of mining investors and those of the fiscus in the context of the proposed new mining fiscal regime. A legal framework that balances the various taxes and fees vis-a-vis their operational viability is being finalised and will go through Government approval processes pending enactment of a Bill by June next year.
Minister Chinamasa said with gold output expected to reach 18,7 tonnes this year and 20 tonnes next year, there was need to put in place incentives to encourage production. As such, the minister reduced royalty fees for primary gold producers from five percent, on an incremental output basis, to three percent with effect from January 1 next year.
The mining sector is expected to grow 2,4 percent next year on the back of planned investments and strong performance of gold, chrome, coal, nickel, platinum and diamonds. In June, the Government lifted a ban on chrome ore exports. Production of the mineral is expected to double next year while diamond output is also projected to rise.
Mineral exports are projected to earn $1,89 billion this year and close to $2 billion next year.
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