Mines ministry seeks review of gold royalty proposal

via Mines ministry seeks review of gold royalty proposal | The Source  January 21, 2014

The mines ministry has approached Treasury to reduce royalties on gold deliveries up to one kilogramme in a bid to support small-scale producers, an official has said.

In his 2014 budget statement, Finance Minister Patrick Chinamasa lowered the rate of royalty from seven percent to three percent for small-scale gold producers whose output does not exceed 0.5 kg per month. However,deputy Mines Minister, Fred Moyo told The Source that this threshold should be raised to include miners who produce up to a kilogram per month.

“Generally, we are all happy with the budget statement but as a ministry we feel there is need to revise the quantum where we feel half a kilogram is too little,” Moyo said, adding that there were also other aspects of the budget that were under review.

The 2014 budget is set to be debated when parliament resumes sitting this week.

In his budget presentation, Chinamasa laid out a series of measures targeted at small-scale producers, but critics have warned that artisanal miners have no capacity to lift Zimbabwe’s gold output back to record levels recorded in the late 1990s, when annual output reached 27 tonnes, about twice the current production.

The ministry’s Mining Industry Loan Fund was allocated $460,000 in the 2014 budget and Moyo said part of the money would go towards capitalising small-scale miners by acquiring equipment to help integrate them into the highly mechanised and capital intensive sector.

“There are also other challenges affecting the mining sector relating to availability of power but I am confident that the sector will grow this year and become the key driver of economic revival,” he said.

The mining sector is expected to expand by 11.4 percent in 2014, having grown by 6.5 percent in 2013 against earlier projections of 17.1 percent, according to government data.

Government also plans to formalise the operations of small-scale miners through an Act of parliament.