July 23, 2017

A bright spot in Zimbabwe’s mining gloom

From threatening to takeover undeveloped mining areas to passing legislation to force foreign-owned mining companies to sell 51% of their shares to so-called indigenous Zimbabweans, the government of Zimbabwe has outdone itself deterring investment.

But there has been one bright spot, amidst the doom and gloom.

Zimbabwe’s treasury has announced that it will engage the country’s ministry of mines and mining development for what would probably be a third downward review of mining fees, according to All Africa Online.

Previous reviews were successfully carried out in 2014 and 2015. The current one should be a mere formality, considering that the government is desperate to appease overtaxed mining companies.

Presenting the mid-term fiscal policy last week, finance and economic development minister, Patrick Chinamasa, said the move was aimed at attracting new investment into the sector, whose fortunes have been affected by the commodities downturn.

“In order to encourage prospecting activities, as well as reducing the cost of doing business, I propose a further downward review of mining fees and charges, in consultation with the ministry of mines and mining development,” he said.

All Africa Online quoted Chinamasa: “In order to encourage prospecting activities, as well as reducing the cost of doing business, I propose a further downward review of mining fees and charges, in consultation with the ministry of mines and mining development.”

Chinamasa said the following mining fees would be affected: Ground rental for diamonds per hectare per year ($3,000), ground rental fee for chrome special block per hectare per year ($1,500) and registration for platinum prospecting licence ($500,000).

Under the new structure, a custom mining licence was reduced to $5,000 per year from $8,000. And an application for an exclusive prospecting order was set at $2,000 (non-refundable), the same price as an application for a mining lease and a transfer of a mining lease. In 2014, the Government reduced registration fees for special platinum blocks from $2,5m to $750,000, as well as scrapping the $5m registration fee for diamonds miners, among other reviews for several minerals. In January 2016, the government reduced mining and prospecting licences.

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