28 December 2012

Zimbabwe: Govt to Cut Mining Fees

GOVERNMENT intends to reduce mining fees and levies by up to 50 percent, Deputy Mines and Mining Development Minister Gift Chimanikire said yesterday. This follows an outcry from the industry after Government raised pre-exploration fees for most minerals by as much as 8 000 percent in January this year.

For instance, registration fees for platinum and diamond claims rose to US$2,5 million and US$5 million, respectively. The registration fees for coal, coal-bed methane and other mineral oils increased to US$500 000 while mining firms are paying annual rental of US$500 per hectare for chrome and US$3 000 per ha for diamonds.

Government said the increase in the mining fees and levies was meant to discourage speculative holding of mineral claims and ensure the sector attracts "serious investors".

Mr Chimanikire said they have submitted the proposed fees to the Finance Ministry for approval.

"We are proposing an average reduction of 50 percent," said Mr Chimanikire in an interview. "We have submitted our documents to the Finance Ministry who should give us the final figures. If that is done, then the new fees will be gazetted."

No official comment could be obtained from the Ministry of Finance. But a source confirmed the ministry was consulting stakeholders.

Zimbabwe Miners' Federation, an organisation that represents small-scale miners, said the move would go a long way in addressing the industry's concerns on high fees.

"The dialogue between ZMF, the ministries of Mines and Finance and other stakeholders has been fruitful," ZMF president Mr Wellington Takavarasha said. "We are looking forward to a conclusion in the revision of the levies."

Early this year, the Zimbabwe Chamber of Mines told a Parliamentary Portfolio Committee on Mines and Energy that the new fees, coupled with high statutory charges, would cripple miners yet to fully recover from successive economic recessions.

"The fee structure is unworkable," said Mr Allan Mashingaidze, at the time the chamber's vice president. "We (the chamber) believe the way forward is for Government to suspend the new charges, pending consultations with the industry."

The mining industry has been the country's most active sector, leading economic recovery since 2009 with an average annual growth rate of more than 30 percent.

Supporting that level of growth was strong external demand for primary commodities, particularly platinum and gold.

According to figures from the Finance Ministry, mineral exports rose by 230 percent over the 2009 to 2011 period, making the industry the leading export sector.

Last year, mineral exports accounted for 47 percent of total exports, led by platinum, gold and diamonds.

Its contribution to the real domestic product also expanded from an average 10,2 percent in the 1990s to an average of 16,9 percent from 2009-2011, overtaking agriculture.

This year, the industry, is set to decelerate from a 25 percent growth last year to 10,1 percent.

This is because the country has been unable to fully benefit from high global prices by increasing exports.

Depressed investment also affected the industry.

The mining sector has overtaken agriculture as the country's main foreign earner.

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