Feb. 27 (Bloomberg) -- A proposed 15 percent levy on Zimbabwe’s platinum exports amounts to a “punishment” that threatens the industry, the country’s mining body said.
The government proposed a tax on shipments of unrefined platinum in December that would apply from Jan. 1 this year. The levy is badly timed and would hurt competitiveness, the Zimbabwe Chamber of Mines said in a document submitted to a parliamentary committee and obtained by Bloomberg News.
“With the platinum price already depressed, compounded by other challenges, this will hamper down viability of the sub-platinum sector,” it said.
Zimbabwe, with the world’s biggest platinum reserves after South Africa, wants to keep more revenue from the industry inside the country. Producers including Anglo American Platinum Ltd. and Impala Platinum Holdings Ltd. submitted plans for refinery units in January after being threatened with an export ban if they fail to complete a plant by the end of the year.
Producers must prepare for local processing, or beneficiation, of platinum, as well as other minerals including chrome, black granite, and gold, Joice Mujuru, Zimbabwe’s vice president, told a conference in Victoria Falls today.
“Let me underscore that beneficiation and value addition is now a war cry,” she said. “It has become our motto and it is important that this message be understood as we go forward.”
Zimbabwe must boost output from 430,000 ounces of the precious metal annually to more than 500,000 within the next year or two, Mines Minister Walter Chidakwa told the same conference. “Let us leverage the resource we have to get things done here in Zimbabwe,” he said.
The industry needs as much as $5.3 billion if it is to expand to that level of output and construct refineries to process platinum group metals and industrial metals extracted from the same ore bodies, the chamber has said.
Export restrictions make investors assess the risk in an industry differently, the chamber said. Another plan, to seize unworked claims after three years, “may not be practical nor desirable,” it said.
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