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In a significant shift following intense industry pressure, Zimbabwe’s Finance Minister, Professor Mthuli Ncube, has indicated the government is open to revising its recently proposed hike in gold royalties, Mining Zimbabwe can report.
By Rudairo Mapuranga
The move comes after the controversial budget measure triggered strong opposition from miners who warned it would cripple profits and investment in the critical sector.
Speaking at a post-budget meeting with business leaders in Harare, Ncube stated, “We have agreed on the issue of (gold) royalties, so you will see some tweaking there.” This comment marks the first official acknowledgement that the government may amend the proposal, which would see the top royalty rate double to 10 per cent for gold prices exceeding $2,501 per ounce.
The potential for revision follows weeks of heated debate. In his 2026 National Budget presentation on November 27, Minister Ncube announced a new, harmonised sliding-scale royalty structure for all gold producers.
The new structure: A royalty rate of 3 per cent when the gold price is below $1,200 per ounce, 5 per cent for prices between $1,201 and $2,500 per ounce, and a new top tier of 10 per cent for any price above $2,501 per ounce.
The government’s rationale: Ncube argued the change was necessary “to ensure the mining sector contributes a fair share of revenue to the Fiscus during periods of commodity price boom.” With gold trading persistently above $4,000 per ounce, well into the proposed 10 per cent bracket, the government aimed to capture more revenue from the windfall.
The announcement was met with immediate and forceful pushback from across the gold mining industry, from large-scale operators to small-scale miners.
Warnings from Major Producers
Caledonia Mining Corporation, a top producer, publicly stated the change would “result in a lower level of profitability and cash generation” at its Blanket Mine and forced a reassessment of its $484 million Bilboes project.
Analysts warned the hike could negatively impact investment flows at a time when Zimbabwe is seeking to grow the sector.
Alarms from Small-Scale Miners
The Zimbabwe Miners Federation (ZMF), representing artisanal and small-scale miners who contribute about 65 per cent of national output, urgently appealed to the government.
The ZMF argued the 10 per cent rate would deter new investment in exploration and development and sharply increase gold smuggling as miners seek better returns in neighbouring countries with lower taxes.
A Sense of Unfairness
A deeper analysis highlighted a core grievance: the new tiered system was seen as penalising the sector’s most compliant players. Large-scale miners, who already bear the full brunt of corporate taxes and other levies, would face the doubled royalty. In contrast, the artisanal sector, which is harder to tax and associated with significant leakage, largely operates under a separate, lower royalty framework. This created a perception of punishing formal, transparent operations while failing to address broader revenue losses from illicit flows.
What “Tweaking” Could Mean
Minister Ncube’s vague promise of “tweaking” leaves room for speculation on the final policy. Industry stakeholders are now watching closely for the government’s next move, which could take several forms:
Adjusting the price threshold: Raising the $2,501 per ounce trigger for the 10 per cent rate to a higher level.
Modifying the top rate: Reducing the proposed top royalty rate from 10 per cent to a more palatable figure for the industry.
Introducing offsets: Coupling the royalty change with other incentives to support mine development and expansion projects.
The gold royalty debate occurred alongside other significant mining tax reforms in the 2026 budget, including:
Changes to how capital expenditures are deducted for tax purposes.
New export taxes on unprocessed lithium, chrome and other minerals to encourage local beneficiation.
A landmark liberalisation of domestic gold ownership, allowing citizens to legally buy, hold, and trade certified gold bars, a move analysts believe could drastically reduce smuggling by bringing informal gold into the regulated economy.
While Minister Ncube’s statement has cooled immediate tensions, the gold sector remains in a holding pattern. The minister’s words suggest a compromise is being formulated, but its details will determine whether Zimbabwe can balance its urgent fiscal needs with the imperative to maintain a viable and attractive investment climate for its most important export industry.
All eyes will now be on the Treasury and Parliament as the budget moves through the approval process, with the industry hoping the promised “tweaking” will result in a sustainable and competitive royalty regime.
