Unki’s tax contribution decreases by over 15%
The country’s third-biggest platinum group metal (PGM) producer, Unki Mine‘s tax contribution decreased by approximately 15.5 per cent in 2023 compared to 2022, according to the Anglo American Platinum Tax and Contribution Report 2023.
By Rudairo Mapuranga
The platinum Mine’s total tax and economic contribution dropped from US$318 million in 2022 to US$269 million in 2023, marking a 15.5% decrease. This decline reflects the broader economic challenges the mining sector faces, particularly the impact of softening commodity prices.
Total wages and related payments increased to US$58 million in 2023 from US$49 million in 2022, marking an increase of approximately 18.4%. This rise indicates Unki Mine’s commitment to maintaining a stable workforce despite financial pressures.
Community and social investments grew by 25 percent, rising to US$5 million in 2023 from US$4 million in 2022. This increase highlights the mine’s ongoing dedication to social responsibility and local development initiatives.
Total procurement expenditures increased by 2.1%, reaching US$147 million in 2023 from US$144 million in 2022. This modest increase underscores the mine’s efforts to sustain its operational capabilities while managing costs.
Local procurement expenditures decreased dramatically from US$144 million in 2022 to US$77 million in 2023, a decrease of approximately 46.5%. This significant drop requires further clarification to understand its implications fully.
Capital expenditure surged to US$59 million in 2023 from US$15 million in 2022, representing an increase of approximately 293.3%. This substantial rise indicates significant investments in infrastructure and expansion projects aimed at enhancing long-term productivity and efficiency.
Total taxes and royalties borne and collected dropped by 50.4%, from US$121 million in 2022 to US$60 million in 2023. This decline reflects the mine’s reduced profitability and taxable income, largely due to lower commodity prices.
Corporate income tax payments fell sharply by 77.4%, decreasing from US$31 million in 2022 to US$7 million in 2023. This significant reduction underscores the financial strain experienced by the mine.
Royalties and mining taxes decreased by 59.5%, dropping from US$42 million in 2022 to US$17 million in 2023. This decline mirrors the reduced revenue generated from mining operations amid weaker commodity prices.
Other payments decreased by 47.8%, from US$23 million in 2022 to US$12 million in 2023. This reduction highlights cost-cutting measures undertaken by the mine to mitigate financial pressures.
Taxes collected slightly decreased by 3.8%, from US$26 million in 2022 to US$25 million in 2023. This marginal decline indicates that while overall contributions have decreased, the mine continues to fulfil its tax obligations.
The decline in Unki Mine’s tax contribution is primarily attributed to the softening of commodity prices in the global market. Lower prices for platinum and other PGM metals have led to reduced revenue and profitability for mining companies. Consequently, this has impacted their ability to contribute significantly to tax revenues and economic development initiatives.
The mining sector, particularly in Zimbabwe, has faced numerous challenges, including fluctuating commodity prices, operational costs, and regulatory changes. These factors have collectively influenced the financial performance of companies like Unki Mine, necessitating strategic adjustments to maintain viability and competitiveness.