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Caledonia Mining Corporation Plc (NYSE American, AIM and VFEX: CMCL) has welcomed significant amendments to the country’s proposed 2026 National Budget, stating that the revised royalty and tax terms should result in no change to the financial outlook for its portfolio of assets in the country, Mining Zimbabwe can report.
By Rudairo Mapuranga
The announcement marks a positive resolution to concerns the company raised just weeks ago about proposals that threatened the profitability of its existing mine and a major future project.
Key Revisions to the Budget Proposals
On December 17, 2025, Zimbabwe’s Minister of Finance announced substantial modifications to the fiscal measures affecting gold miners. The changes directly address the three main concerns Caledonia had previously identified:
Royalty Rate Threshold Significantly Increased
Previous proposal: Increase the royalty rate from 5% to 10% when the gold price exceeds US$2,500 per ounce.
Revised proposal: The higher 10% rate will now only apply if the gold price exceeds US$5,000 per ounce.
Capital Expenditure Deduction Rule Maintained
A proposed change to spread tax deductions for capital projects over their lifetime, which would have impacted cash flow, has been withdrawn. The current 100% upfront deduction remains in place.
Withholding Tax on Offshore Loans Withdrawn
A proposed 15% withholding tax on interest for offshore loans has been withdrawn. Caledonia noted that this measure would have adversely affected its plans to fund the Bilboes Gold Project with offshore debt.
Caledonia’s Assessment and Leadership Commentary
The company stated that these revised proposals, which are expected to be enacted before year-end, “should result in no change in the financial outlook for Caledonia’s portfolio of assets in Zimbabwe, provided the gold price remains below US$5,000 per ounce”.
Mark Learmonth, Chief Executive Officer of Caledonia, commented on the government’s move:
“The 2026 National Budget of Zimbabwe is yet to be enacted into law. However, we welcome the revised provisions announced this week, which we believe demonstrate the Government of Zimbabwe’s support for the mining sector and the development of future mining projects in the country.”
This statement contrasts with the company’s tone on December 1, when it noted that the original proposals would lower profitability at its Blanket Mine and required an assessment of the impact on the Bilboes Gold Project.
The swift revision of the budget terms is seen as a constructive outcome of dialogue between the mining industry and the government. For Caledonia, it removes immediate fiscal uncertainty and supports the economics of its key growth project, Bilboes, which is poised to become one of Zimbabwe’s largest gold mines.
The company maintains a long-standing operating presence in Zimbabwe through its flagship Blanket Mine and continues to engage with local authorities.
