Zim misses royalties target

HARARE - Zimbabwe collected a total of $133, 7 million in mining royalties last year, missing its $245 million target, the African Development Bank (AfDB) said.

In its February 2014 report, the regional bank said the country missed the projected figure because of depressed global prices.

The collections were marginally lower than 2012’s $134,4 million. AfDB said the poor performance of international commodity prices was mainly during the last half of 2013.

Gold producers pay seven percent in royalties while diamond and platinum miners are charged 10 percent. 

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

This comes as experts blame high royalty rates as well as the indigenisation policy as significant factors that are making Zimbabwe an unattractive mining destination. The empowerment policy compels foreigners to cede 51 percent shareholding to black locals.

According to figures released by the Chamber of Mines (CoM), royalties alone gobbled up about $81,1 million from the mining industry’s earnings in 2013, negatively affecting industry viability.

Last year, the chamber highlighted royalty costs as a major threat to its members’operations.

It also included Rural District Councils unit tax, Environmental Management Agency discharge fees and levies from the Minerals Marketing Corporation of Zimbabwe and Standards Development as some of the miscellaneous charges eating into miners’ earnings.

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