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In a major policy shift, Finance Minister Mthuli Ncube has unveiled a revised sliding-scale royalty structure for gold, significantly raising the trigger for the top 10% rate following fierce opposition from miners. The new proposal, announced in Parliament on December 16, exempts small-scale miners from any increase and sets a significantly higher price threshold for large-scale producers, Mining Zimbabwe can report.
By Rudairo Mapuranga
Bowing to intense pressure from the mining industry, Zimbabwe’s government has drastically revised its proposed gold royalty hikes, offering a significantly more favourable structure for producers. Finance Minister Mthuli Ncube announced the concessions in Parliament, marking a substantial retreat from the original 2026 budget plan that would have imposed a 10% royalty on gold sold above US$2,501 per ounce.
The new framework, effective January 1, 2026, is as follows:
For small-scale miners:
No change to their current royalty arrangements.
For large-scale miners:
A new, progressive royalty system:
- 3% if the gold is sold below US$1,200 per ounce.
- 5% if sold between US$1,201 and US$5,000 per ounce.
- 10% only if sold above US$5,000 per ounce.
The climbdown follows weeks of unified warnings from across the sector. The original budget proposal, announced in late November, was met with “immediate and forceful pushback” from large- and small-scale miners alike. Major producer Caledonia Mining Corporation warned the hike would slash profitability and force a reassessment of a key US$484 million project.
The Zimbabwe Miners Federation (ZMF), representing the artisanal and small-scale miners who produce about 65% of the nation’s gold, led the charge. It urgently appealed to President Emmerson Mnangagwa, arguing the 10% rate would cripple investment, stall development, and fuel massive gold smuggling to neighbouring countries.
Minister Ncube acknowledged this pressure, telling the House he had been “persuaded by the contributions from both sides of the House and by the public,” as well as direct representations from mining bodies.
The revised structure, particularly the sharply increased threshold for the top rate, has been hailed as a pragmatic solution that balances fiscal needs with sector sustainability.
Hon. Jonah Nyevera, a member of the Parliamentary Portfolio Committee on Mines and Mining Development, praised the move as a strategic masterstroke.
“The decision to leave small-scale miners’ royalties unchanged is a masterstroke. It allows these operators—who produce the bulk of our gold—to grow, formalise, and contribute to the economy without being burdened by higher taxes,” Nyevera stated.
He particularly highlighted the logic behind the new US$5,000 threshold for the 10% rate. “For large-scale miners, the 10% rate for prices above US$5,000 is a genius move. It ensures the government shares in supernormal profits while not discouraging investment, given that gold prices rarely exceed that threshold. This is a win-win for the government, the people of Zimbabwe, and investors.”
The new royalty proposal now awaits formal adoption by Parliament. If passed, it will represent a significant victory for the mining industry, which argued successfully that the original plan threatened the viability of Zimbabwe’s most important export sector.
The compromise suggests a government more responsive to stakeholder concerns, aiming to capture higher revenue only during extreme price booms while providing the stability miners need to plan and invest for the long term.
