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In an effort to compel miners to build domestic smelting plants and capture more value from its mineral wealth, Zimbabwe has enacted a stringent new export tax targeting raw chrome, with a 10% export tax levied on all “unbeneficiated chrome,” as detailed in Section 12I of the Finance Act, Act No. 7 of 2025, Mining Zimbabwe can report.
By Rudairo Mapuranga
The law defines “unbeneficiated chrome” with a scope that reveals its ambitious intent. It targets not only raw chrome ore and fines but also material that has undergone primary processing, including ore that is “crushed, milled and washed.” Crucially, it explicitly names “chrome concentrate that is smelted in pellet or ingot form.”
This definition is strategic. It establishes that only the final product of ferrochrome, the result of high-energy, capital-intensive smelting, will be considered “beneficiated” and thus potentially exempt from this punitive levy. The goal is clear: to make the export of any intermediate product financially untenable.
The most impactful provision, however, is the valuation method for the tax. According to subsection (3), the taxable value of exported unbeneficiated chrome will be deemed the higher of:
(a) the actual bill of entry value, or
(b) the market value of ferrochrome on the date of export.
This means a miner shipping raw chrome ore will have the 10% tax calculated not on the ore’s price, but on the significantly higher price of processed ferrochrome. This mechanism creates a powerful economic disincentive, artificially eroding the profit margin on raw exports by taxing a value that can only be captured through domestic investment in smelters.
The tax, calculated on this benchmarked value, must be paid in United States dollars or other foreign currency (Section 12K), ensuring the state secures hard currency from the sector. Combined, these measures form a coherent, coercive strategy: using fiscal policy to redirect investment and force the physical expansion of the nation’s industrial base up the value chain.
The immediate effect places chrome miners and processors at a critical juncture. The policy leaves two stark paths:
Comply: Secure massive capital (estimated in the hundreds of millions) to build or partner in smelting facilities, navigating Zimbabwe’s well-documented challenges with power supply and infrastructure.
Stagnate: Face a tax regime that deliberately undermines the profitability of existing business models.
The government’s wager is that the sector will choose to invest. Critics, however, warn that the simultaneous demand for foreign currency taxes and massive capital expenditure could create a cash flow crisis, stifling production before new smelters come online.
Zimbabwe’s 10% export tax on chrome is more than a revenue measure; it is an industrial policy experiment of high ambition and risk. By using tax law to redefine what constitutes a “finished” product and to penalise the export of anything less, the state is attempting to architect a new reality for its mining sector. The success or failure of this chrome clause will serve as a critical test of whether such aggressive fiscal coercion can successfully catalyse domestic industrialisation, or whether it will constrain the very industry it seeks to transform.
