- January 31, 2021
- Posted in NEWS
The government’s commitment to follow through on promises it makes to investors is likely to make Zimbabwe a top investment destination, according to Great Dyke Investments (GDI), which is currently developing a platinum mine in Darwendale.
Last week, GDI got a five-year tax holiday through Statutory Instrument (SI) 26 of 2021.
A tax holiday is a temporary reduction or elimination of a tax that is used to incentivise investors.
GDI vice chairperson Mr Igor Higer told The Sunday Mail Business that the dispensation extended to the mining company was a culmination of a promise that had been made to Russia.
“The SI was issued based on a signed mining agreement, which was signed in Moscow in the presence of President Putin and His Excellency President Mnangagwa (in 2019),” said Mr Higer.
“So from an investor point of view, the most important thing here is the stability and the evidence that when the Government of Zimbabwe promises something, they deliver.
“So obviously this gives us the comfort to continue investing in the country and to develop the project as per agreed roadmap.”
He said everything “is going on well in terms of the agreed roadmap”.
According to a 2018 United Nations report on design and assessment of tax incentives in developing countries, tax holidays are a tool that has been relied upon not only in the developing world, but in developed countries as well.
“As a matter of fact, developed countries normally use tax incentives to promote research and development activities, export activities and support the competitiveness of their enterprises in the global market,” notes the UN report.
Tax incentives, adds the report, do not warrant any expenditure such as provision of grants and cash subsidies from the Government.
The Darwendale Platinum Project is one of the anchor projects forecast to grow the mining sector and create employment.
The scope of current works include development of two mining portals.
Engineering work is envisaged to be completed in March.
Overall, the two portals are projected to produce up to 3,5 million tonnes of platinum ore once full production kicks in later this year.
Speaking during a tour of the mine in September last year, GDI chief operating officer Mr Munashe Shava said the mine was employing 450 workers at the time.
Of those employed, 70 were on full-time contracts, with the rest being on the books of contracted companies that are partaking in mine development works.
The Sunday Mail