- January 28, 2021
- Posted in LOCAL
Government has exempted platinum miner Great Dyke Investments (GDI) from paying income tax for the next five years.
GDI is 50% owned by local consortium Landela and Afromet JSC, wholly owned by Russia’s investment and industrial group Vi Holding, which has spearheaded the Darwendale project since its inception in 2013.
In Statutory Instrument (SI) 26 of 2021, gazetted last week, Finance and Economic Development minister Mthuli Ncube said GDI has gained tax exemption effective January 1, 2021.
According to the SI, the receipts and accruals must be generated from the exploitation of platinum group metals (PGMs) deposits at Darwendale and the consequences of this approval is that the receipts and accruals of GDI are exempt from income tax for five years.
“Resident shareholders’ tax payable on dividends paid to shareholders of GDI resident in Zimbabwe in connection with special mining lease operations of GDI and also that additional profit tax for a period of five years commencing from the date of receipt of income from mining operations and sales of mining output payable in respect of the special mining lease area for any year of assessment,” Ncube said.
GDI’s first phase is expected to cost US$500m, targeting annual output of 280,000 ounces of PGMs and gold.
The African Export-import Bank (Afreximbank) was last year appointed as the main financial partner and lead arranger for the project.
The continental bank has put up US$192m towards the project.
According to the agreement, Afreximbank’s mandate covers both debt (project) financing and equity raising portion in the amount sufficient for the successful implementation of the Phase 1 of the Project.
The company is negotiating with Zimbabwean, South African and Russian funders to raise cash for equipment, machinery and services procurement, the company said.
The Darwendale project will be implemented in three phases and is expected to produce 860,000 ounces of PGM and gold per year at full capacity.