Mining companies paid $81.1m into Zimra coffers

Published: 19 July 2013

Mining companies in Zimbabwe paid $81.1m into the country's coffers in mineral royalty payments during the first half of 2013.

Zimbabwe relies heavily on mining and agriculture to boost its struggling economy against the backdrop of poor performance in the manufacturing and industry sectors.

The mining sector, which has been projected to grow 17% in 2013, is, however, facing increased threats to its growth prospects, with officials and analysts blaming the decline in international commodity prices.

Mining royalty payments for the first half period missed the $107.8m target set for the period. However, revenue collections from mineral royalty payments grew 25% during the period under review compared with the same period in 2012.

Zimbabwe could have bagged more, especially from the diamond mining companies, but Finance Minister Tendai Biti has persistently raised concerns over the manner in which diamond mining revenue is handled.

During the period under review, Zimbabwe earned $1.73bn in gross revenue collection against a target of $1.67bn. Second-quarter overall revenue collection amounted to $873.6m, which missed projections by 6%.

There are discussions between the government and mining industry participants to have the mineral royalties lowered to facilitate investment and expansion in the sector. Indications from industry sources are that the government is keen to lower the royalties and other mine taxes to attract investment in the sector.

"The depressed performance of the revenue head (item) was mainly due to the softening of international mineral prices, especially gold and diamonds," said Sternford Moyo, chairman of the Zimbabwe Revenue Authority.
- BDlive