Home News FM Mthuli Ncube Explains Mineral Royalty Payments

FM Mthuli Ncube Explains Mineral Royalty Payments

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Credit NewZWire

With the economy expected to grow by 3.8% next year, mining is expected to anchor the growth with a 10.4% sectorial growth. Growth is expected in a number of minerals that include gold, platinum and lithium. Taxes from mining including royalties have contributed significantly to Zimbabwe’s foreign currency earnings.

Presenting his 2023 budget statement, Finance Minister Mthuli Ncube said while mining royalties have been paid in cash, this was now being reviewed to build up fiscal reserves.

“Whereas the country is endowed with rich mineral resources, such resources are finite. It is, thus, necessary that part of the resources be used to build up fiscal reserves. . Although traditionally, royalties are remitted in cash, it is pertinent that the current formulae be reviewed in line with Government policy to preserve value and also mitigate against revenue loss,” he said.

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Professor Mthuli further elucidated on the breakdown of the royalties payment in mineral reserves, foreign currency cash and local currency.  

 “ As already enunciated by His Excellency, the President, mining houses will be required to remit royalties partially in the form of a mineral and in cash as follows: 50% in the form of mineral concerned and in the form of purity or quality of the mineral concerned as maybe prescribed; 10% in foreign currency cash; and 40% in local currency,” he said.

He noted that PGM miners currently do not have refining facilities, hence, sell semi-processed concentrates for further processing, adding all government revenue including royalties will be accounted for in terms of Section 302 of the constitution which requires that all government income be deposited into the Consolidated Revenue Fund.

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