Government is set to roll out a series of legal instruments to implement measures aimed at reducing the cost of doing business, a move that could extend to the mining sector, Zimbabwe’s top foreign currency earner, Mining Zimbabwe reports.
By Ryan Chigoche
Finance, Economic Development and Investment Promotion Minister Mthuli Ncube recently said the government is committed to translating its cost-cutting pronouncements into legal effect.
He noted that individual ministries would begin announcing new fees and procedures through statutory instruments, some of which will also be incorporated into the Finance Act. Ncube indicated that the reforms have so far targeted agriculture, retail, wholesale, transport, and tourism, and that the government plans to cover all major sectors in due course.
It is now clear that the mining industry should not be left out of this reform momentum.
As Zimbabwe’s leading foreign currency earner over the years, the sector has consistently underpinned the country’s export earnings, yet it has often been treated primarily as a source of revenue rather than as a partner in national development.
Ncube’s drive to reduce operational costs presents an opportunity to recognise mining as a development partner capable of driving growth, attracting investment, and expanding earnings if given a predictable and supportive fiscal framework.
Several fiscal and operational challenges illustrate why the sector deserves attention. Royalty structures, for instance, remain high and unlinked to market prices, exposing producers to unnecessary risk when commodity values fluctuate.
The Chamber of Mines of Zimbabwe has long proposed a sliding, price-based system: for platinum, 3% when prices are below US$1,100 per ounce, rising to 10% above US$2,000 per ounce; for lithium, 5% for prices up to US$15,000 per tonne, 7% between US$15,000 and US$20,000, and 10% above that. Importantly, royalties would be calculated on actual realised proceeds rather than benchmarks, encouraging reinvestment and production growth.
The Special Capital Gains Tax on mining title transfers, currently at 20%, is also constraining investment. While retrospective application has been removed, the Chamber recommends it be levied on net gains rather than gross transaction value.
Similarly, export taxes and beneficiation levies are being applied on concentrates, penalising producers before local processing capacity exists.
Reforming this framework could unlock downstream value addition and increase foreign currency earnings.
Operational challenges such as delayed VAT refunds create liquidity pressures, particularly for smaller producers.
The complexity of multiple statutory payments across ministries and local authorities adds further administrative costs and inefficiencies.
The Chamber has suggested a single-window system to streamline these payments and improve transparency.
Rising electricity and utility costs further strain mining operations, threatening competitiveness.
Addressing these costs through relief measures or benchmarking against regional standards could make production more sustainable and encourage expansion.
Addressing these interconnected issues—royalties, capital gains tax, export levies, VAT refunds, statutory payments, and utility costs—would reduce operational burdens and unlock the mining sector’s potential to earn more for the country.
Recognising mining as a partner in development rather than merely a source of revenue would allow Zimbabwe to fully capitalise on the sector’s capacity to drive sustainable economic growth and attract long-term investment.
Treasury has linked this broader cost-cutting initiative to the country’s ongoing economic stabilisation programme, which has been commended by international institutions such as the IMF.
Ncube cited a 6.6% growth rate for this year and a projected 5% for next year as evidence that reforms are having a positive impact.
If the momentum now applied to agriculture, manufacturing, transport, and tourism is extended to mining, the sector could see new exploration and production growth while strengthening Zimbabwe’s foreign exchange base.
