Zimbabwe to announce reduced mining fees

Published: 10 June 2013

Government is expected to announce reduced mining fees and levies this month, The Sunday Mail Business has established. Negotiations between Government, the Zimbabwe Chamber of Mines and the Zimbabwe Miners Federation (ZMF) began last year after the authorities raised the pre-exploration fees for most minerals by as much as 8 000 percent.

Stakeholders argue that the increases dent mining operations and are unlikely to yield the expected results.

A source privy to negotiations between Government and stakeholders said talks had progressed well. The source said a lot of issues had been agreed upon and the announcement of the new position was scheduled for this month.

"They agreed (stakeholders and the mines ministry) that the fees and levies need to be reduced and submissions have since been forwarded to the finance ministry. And, from the look of things and the feedback that has been coming through from the Ministry of Finance, the two ministries seem to have reached a consensus and it will not be long before the new fee structure is gazetted," said the source.

Secretary for Mines and Mining Development Mr Prince Mupazviriho confirmed in an interview last week that negotiations had progressed well. However, he could not shed light as to when the revised fees would be announced.

"The issue has been under consideration for some time, but I will only be able to give you a proper position next week on Monday (tomorrow)," he said.

Last year the deputy minister in the Ministry of Mines and Mining Development, Mr Gift Chimanikire, indicated that a proposal of the new fee structure had been forwarded to the finance ministry.

The mining fees and levies were increased by Government to discourage speculative holding of mineral claims, a phenomenon that has become prevalent.

The increases that were made last year saw the registration fees for diamond-mining licences rising to US$5 million from US$1 million, while an application for a platinum-mining licence climbed to US$500 000 from US$200. Also, according to the fee structure, mining firms are supposed to pay an annual rental of US$3 000 and US$500 per hectare for diamonds and chrome respectively.

But if the 50 percent reduction is approved, the mining firms would have to pay half of the above stated figures, probably beginning April.

Conversely, despite Government agreeing to halve the levies and fees, it is believed that a section of the stakeholders are still against the proposed figure. The division is arguing that the prices that were gazetted last year are way above the business levels prevailing in the country.

ZMF president Mr Wellington Takavarasha said they preferred a position whereby the responsible authority reverted back to the old fee structure. This, he said, was going to help promote investment in the sector, particularly by small-scale miners.

"We have been following these developments closely. The last time I checked the Ministry of Finance was still to come up with a decision with regards to the revised figures. But I should point out that as an association, we have been calling for the ministry to revert to the old figures," he said.

"The fees and levies are so high that reducing them by the proposed 50 percent does not make any difference. For instance, half of these levies and fees will still remain unaffordable to a number of miners, making the difference the same," added Mr Takavarasha.

Meanwhile, the notice of the revised figures is expected to coincide with the announcement of the temporary lifting of the chrome ore export ban.

The ban is expected to be lifted in April for a period yet to be specified.

During this phase, small-scale chrome miners are expected to sell their product and raise money to set up more smelters around the country.

The lack of smelters has over the years derailed Government effort to add value to the mineral.

Presently, it is reported that there are eight smelters in the country, with the one at Zimasco being the only one currently operational.

Statistics from the ZMF indicate that by December last year small-scale miners where saddled with close to 30 000 tonnes of chrome ore.

The mining industry has been the country’s most active sector, leading economic recovery since 2009 with an average annual growth rate of more than 30 percent. Last year, mineral exports accounted for 47 percent of total exports, led by platinum, gold and diamonds. Other top contributors to the country’s Gross Domestic Product (GDP) are agriculture and tourism.
- SM

Tags: Mining,