Govt to lower mining royalties

via Govt to lower mining royalties | The Source  December 3, 2013 

Government will lower royalties from mineral sales, particularly for gold miners in a bid to shore up deliveries and resuscitate its refinery, Fidelity Printers, the mines minister has said.

Zimbabwe wants to reopen Fidelity, a subsidiary of the central bank which closed shop in 2008 after deliveries fell to three tonnes leading to the loss of its London Bullion Marketing Association licence.

Output is expected to  increase to 17 tonnes from  15 tonnes last year but still falls short of the peak of 27 tonnes achieved in 1999.

Walter Chidhakwa said the government was concerned that the mineral was still finding its way to the black market and subsequently exported to neighbouring countries.

In January last year, government pegged royalties for gold at seven percent, platinum at 10 percent and diamonds at 15 percent. In the six months to June this year, the mining industry paid $81.1 million in royalties, according to the industry chamber.

“We will be reviewing royalties so that we can attract gold into our system and Fidelity can start working on gold for refinery purposes,” Chidhakwa told The Source recently.

The mining sector is one of Zimbabwe’s major economic drivers which experienced an average growth of 19.9 percent in the period 2009 to 2012.

The mining sector is one of Zimbabwe’s major economic drivers, with an average growth of 19.9 percent in the period 2009 to 2012 while the sector’s contribution to GDP increased from four percent to 16 percent in that period.

Chidhakwa said lowering royalties would help the sector recover.

“On other minerals there is agreement on the concept of reducing royalties but we have not settled on the numbers. The final decision will be in the budget statement,” he said.

Finance minister Patrick Chinamasa said the budget will be announced possibly in January next year.