Diamond miners in Zimbabwe are now required to pay half their royalties to the government in rough stones, 40 per cent in local currency and 10 per cent in foreign currency. The annual earnings of the mining sector have nearly doubled from US$2.7 billion in 2017 to US$5.73 billion in 2021. Projections by the Ministry of Finance show that mining earnings will reach US$7.3 billion by the end of the year, achieving 60.8% of the US$12 billion target for 2023.
Finance Minister Mthuli Ncube gave details of the new policy last week, saying the government needed to build its national reserve of precious stones and metals, including gold, platinum and lithium. " Starting this October, Government now requires that part of these royalties come as factual refined mining product in respect of each of the four minerals. We cannot, as the present government, and as the current generation, run and manage finite resources profligately, without any regard for generations yet and sure to come," said President Emmerson Mnangagwa.
He said the central bank will be custodian of the reserves, which will be in reused final products, not ore, indeed if they’re reused abroad. The Chamber of Mines, which represents major mining companies, said it was not worried about the pronouncement because it would not increase existing royalty rates.
“We respect the government’s position. It’s their prerogative. All they are saying is they are changing payment modalities,” Chamber of Mines Chief Executive Isaac Kwesu stated.
Presently Zimbabwe’s inflation is up 255%.
Source: Sunday Mail Review | Zimbabwe Ministry of Finance
Photo Credit: Andrey Rudakov/Bloomberg