The Deputy Minister of Finance and Investment Promotion, David Mnangagwa, has warned that continued power supply challenges are directly undermining the country’s beneficiation goals, and as a result, miners are being forced to pay more in taxes for exporting unrefined minerals, Mining Zimbabwe can report.
By Rudairo Mapuranga
Speaking at the Platinum Group Metals (PGM) symposium during the Chamber of Mines Annual General Meeting, Mnangagwa acknowledged that despite Zimbabwe holding the world’s third-largest platinum reserves, the country is yet to realise full value from its mineral wealth. One of the key setbacks, he said, was the lack of reliable energy — a non-fiscal issue with deep fiscal consequences.
“Unreliable power directly impacts the viability of beneficiation,” he said. “We must therefore ensure continued investment in reliable energy supply for the mining sector.”
The Deputy Minister noted that while the government has implemented various fiscal support measures, including royalty and tax concessions, the absence of processing infrastructure due to power and capital constraints means miners continue to export unbeneficiated concentrates, which attract higher taxes.
Currently, Zimbabwe charges a beneficiation tax of up to 5% on unrefined platinum exports as a disincentive to the export of raw minerals. However, Mnangagwa admitted that this punitive measure is doing little to drive local processing due to infrastructural limitations.
“The current framework is based on an export tax disincentive, rather than a positive incentive structure for those investing in value addition and refining,” he said. “We need to review this approach if beneficiation is to become viable.”
Zimbabwe’s existing tax framework for PGMs:
- Royalty rate on platinum pegged at 7%, calculated on LME prices (85% for concentrate, 90% for matte), with 50% paid in kind, 10% in forex, and 40% in local currency.
- Income tax at 15% for special leaseholders and 25% for others.
- Additional profits tax (APT) and VAT exemptions on capital equipment.
- 100% capital expenditure deduction in the year incurred.
- Loss carry-forward provisions to cushion new projects.
Despite this, mining revenue has been declining. According to ZIMRA, the sector’s contribution to national revenue dropped to 8% in March 2025, down from 12% in November 2024, driven largely by price volatility and reduced beneficiation.
ZIMRA Commissioner of Domestic Taxes, Misheck Gova, recently lamented that PGM sector compliance and revenue contributions are falling despite numerous concessions. He added that royalties are now tax-deductible, which reduces income tax further, and pointed out miners’ frustrations with delays in VAT refunds, informalisation, and illicit financial flows.
The Deputy Minister acknowledged these concerns, saying the government is exploring “a tiered royalty system” and clearer fiscal guidelines to promote long-term investment. He also hinted at “targeted support” for companies investing in PGM refining.
“We are aware of the miners’ concerns around high input costs, complex fiscal structures, and the burden of taxes when beneficiation is not feasible,” he said. “Our commitment is to craft a balanced approach — one that supports both national revenue and industry growth.”
As Zimbabwe aims to transform itself into a regional beneficiation hub, Mnangagwa stressed the importance of policy predictability, stable fiscal regimes, and continuous consultation with industry players.
“PGMs are national assets,” he said. “By providing intelligent, targeted fiscal support, we can unlock increased export earnings, foster resilience, and build a diversified economy.”
However, without reliable power and genuine incentives for refining, Zimbabwe’s beneficiation dream risks remaining just that — a dream miners are taxed for failing to realise.
