- ZMF Urges President Mnangagwa to Halt Proposed Gold Royalty Hike, Warns of Sector Collapse
The Zimbabwe Miners Federation (ZMF), representing the nation’s small to medium scale miners, has made a direct appeal to President Emmerson Mnangagwa to intervene and lower a proposed steep increase in gold royalties, warning that the policy threatens to cripple the very industry it aims to tax, Mining Zimbabwe can report.
By Rudairo Mapuranga
The urgent plea comes in response to the 2026 National Budget, which proposed hiking the royalty rate to 10 per cent when the gold price exceeds $2,501 per ounce. With gold prices currently trading well above this threshold, the majority of producers would immediately fall under the top rate, a significant jump from the previous structure.
In a formal appeal also addressed to the Minister of Mines and the Minister of Finance, ZMF President Henrietta Rushwaya argued that the hike is “counterproductive” and will “severely constrain gold production,” which includes stalling “new investment in exploration and mine development” and causing “capital flight,” undermining the government’s own revenue goals and economic growth targets.
The royalty change was presented as a measure to ensure the mining sector contributes a “fair share of revenue to the Fiscus during periods of commodity price boom”. The new sliding scale structure is also intended to harmonise rates across different categories of miners.
The proposed scale is as follows:
- 3 per cent royalty for gold prices below $1,200 per ounce.
- 5 per cent royalty for prices between $1,201 and $2,500 per ounce.
- 10 per cent royalty for prices exceeding $2,501 per ounce.
In its detailed appeal, the ZMF contends that a 10 per cent top rate makes Zimbabwe a clear global outlier. The federation provides stark comparisons with regional and international peers to bolster its argument for a competitive cap of 3 per cent.
Regional and International Royalty Comparisons
In Africa:
- Ghana: A leading African producer maintains a 5 per cent royalty on gold.
- Tanzania and Mozambique: Apply royalty rates of 4 per cent and 5 per cent on precious metals, respectively.
- South Africa: Uses a sliding scale from 0.5 per cent to 5 per cent based on profitability.
Global Benchmarks:
Western Australia: The royalty rate for gold is set at 2.5 per cent of the royalty value, with no royalty payable on the first 2,500 ounces produced annually by a project.
Queensland, Australia: Uses a sliding scale between 2.50 per cent and 5.00 per cent for prescribed metals like gold, with the exact rate varying with average metal prices.
New South Wales, Australia: Applies a royalty of 4 per cent of the value of recovered minerals, including gold.
Canada (Ontario and Quebec): Effective royalty rates are highly competitive, often below 5 per cent for profitable mines.
Nevada, USA: Net proceeds royalty rates are typically between 2 per cent and 5 per cent.
The ZMF letter warns that a rate significantly above 5 per cent “positions Zimbabwe as an outlier, rendering it uncompetitive” and will trigger a “catastrophic ripple effect.”
Positioning itself as a committed partner in national development, the ZMF states it is not advocating for a non-contributory sector. Instead, it proposes a “sustainable win-win model” centred on a maximum royalty rate of 5 per cent, aligned with regional and global standards.
The federation has called for further dialogue with the Ministry of Mines and the Treasury, standing ready to provide detailed technical submissions to work towards a fiscal framework that secures both national revenue and the future of Zimbabwean mining. The decision now rests with the government as it balances immediate fiscal needs against the long-term health of its most important export sector.
