Small-scale miners have resorted to selling gold on the informal market in a bid to evade the recent increase in royalty charges by the government.
Zimbabwe Miners’ Federation chief executive officer Wellington Takavarasha told the Parliamentary Portfolio Committee on Mines and Mining Development that the high tax and royalty burden had reduced small-scale mining activities.
“The increase of royalties tax from 4% and 2% presumptive tax to 7% has become such a burden to small-scale miners that they now prefer to sell their gold to ‘sharks’,” said Takavarasha.
“If we sell our gold at Fidelity Printers and Refineries, they are 15% below the world market prices and Tetrad is 8% below the world market prices.”
He said small-scale miners were also facing challenges from the millers as they could only retrieve 40% from their ore.
Takavarasha said there was need for the Ministry of Finance to intervene to address the challenges.
He said unfavourable policies and high charges by the Environmental Management Agency were among the factors discouraging business.
He said in 2004 small-scale miners accounted for 60% of the country’s gold production but the figure went down to 50% the following year.
“In 2006 and 2007 there was no activity, in 2009 two tonnes, in 2011 2,7 tonnes and for the first quarter of 2012 they have produced one tonne so far,” said Takavarasha.