By Yusuf Khan
Miners operating in Zimbabwe will have to pay part of their royalties to the country using refined metal, as the country seeks to expand its national reserve of strategic minerals.
In his column for the Sunday Mail of Zimbabwe, President Emmerson Mnangagwa said the government was putting in place a new policy of hoarding precious and high-value minerals to build up a strategic stockpile of gold, diamonds, group metals platinum and lithium.
As part of this, miners will now have to pay the government part of their royalties as refined metal, having previously only paid a royalty to the government to be able to mine in the country.
The president said this would allow Zimbabwe to both build physical reserves of valuable and strategic minerals while securing revenue for the day-to-day running of government business.
He added that the country’s policy on mining royalties should respond to resource scarcity and global demand trends.
Zimbabwe, like its neighbor South Africa, is home to vast mineral resources – especially precious metals – with major mining companies like Anglo American PLC and Impala Platinum Holdings Ltd. operating in the region. Despite this, poor infrastructure and power issues have been a problem in terms of expanding the industry.
President Mnangagwa said the policy would be in effect from this month, with reserves held by the Reserve Bank of Zimbabwe.
Impala Platinum, which operates PGMs in the country under Zimplats Holdings Ltd., said it was working with the Chamber of Mines to better understand “evolving mining policy” in Zimbabwe.
He added that paying royalties in US dollars and/or partial payment in equivalent metal product does not materially change the cost burden in Zimbabwe on face value.
“However, this potentially constitutes a significant shift in fiscal policy, particularly given the current ability of governments to acquire refined metals from US dollar revenues received,” the company said.
Write to Yusuf Khan at email@example.com