ZIMBABWE’S small-scale miners have welcomed the government’s proposal to scrap royalties levied on gold producers, saying the initiative will help boost output.
BY MTHANDAZO NYONI
Mines and Mining Development minister Walter Chidakwa recently revealed that the government was considering scrapping royalties levied on gold producers in order to boost output.
Gold miners in Zimbabwe are required to pay 3% in royalties.
“We are very excited about that and to us it’s actually an incentive. The move will definitely improve gold production in the country,” Zimbabwe Miners’ Federation (ZMF) first vice-president, Ishmael Kaguru, said.
He said the development will reduce the black market, thereby, boosting their production in the process. Zimbabwe is losing millions worth of gold, as it smuggled outside the country, where it fetches higher prices.
In 2015, it was revealed that the country was losing an estimated $180 million worth of gold annually through smuggling into neighbouring countries.
ZMF spokesperson, Dosman Mangisi welcomed the move, but urged the government to mechanise the industry for more production.
“There should be no cash delays so that people are hands-on in operation. There should be efficient delivery from the side of government so that miners are motivated. It should be fast, considering our target of 27 tonnes,” he said.
Mining royalties, according to Zimbabwe Revenue Authority, contributed $62,9 million to revenue in 2016.
Zimbabwe earned $914 million from 21 tonnes of gold last year.
This year, the government targets 28 tonnes of gold.
Small-scale miners have contributed nearly 40% of total output since 2015, when the government decriminalised artisanal mining and embarked on an aggressive collection strategy, which saw the country’s sole buyer of gold, Fidelity Printers and Refineries, setting up buying depots across the country.
Gold is one of Zimbabwe’s main export earners.