Zimbabwe May Halve Mining Fees After Impala, Rio Protest
Zimbabwe plans to halve mining levies in 2013 after companies including Impala Platinum Holdings Ltd. (IMP) complained that increases this year are hindering development, Deputy Mines Minister Gift Chimanikire said.
“We have proposed to the Ministry of Finance that the mining fees be reduced by 50 percent,” he said in a Dec. 28 interview from Harare, the capital. “We’re now waiting for the Ministry of Finance to approve the new fee structure, which will happen in the new year.”
Zimbabwe, which has the biggest platinum and chrome reserves after South Africa, in February raised diamond-mining licenses to $5 million from $1 million, while an application for a platinum-mining license climbed to $500,000 from $200, according to the Government Gazette. The government, which said the revised fees were meant to deter speculative holdings of mineral claims, in April said it planned to review the duties following complaints.
The country is trying to boost revenue from mining and other industries as it seeks to recover from a decade-long recession that ended in 2009 when neighboring countries brokered the formation of a coalition government to ease a political dispute between President Robert Mugabe’s Zimbabwe African National Union-Patriotic Front part and the Movement for Democratic Change of Prime Minister Morgan Tsvangirai.
Impala, which is based in Johannesburg and and controls Zimbabwe’s biggest platinum operation, said on Feb. 16 that the increase in fees will cost $1 billion and bankrupt the country’s mining industry.
The decision to raise fees has harmed the outlook for the industry, the country’s Chamber of Mines, whose members include Impala’s Zimplats unit, London-based Rio Tinto Group (RIO), China’s Sinosteel Corp. and closely held Metallon Corp Ltd., said on Dec. 3. Rio mines diamonds in Zimbabwe, Sinosteel produces chrome and Metallon is a gold miner.
Zimplats shares have declined 29 percent this year, falling to A$8.50 in Sydney. Impala, which has a bigger operation in South Africa, climbed 1 percent to 167.70 rand by the close in Johannesburg today, paring its retreat this year to 0.2 percent.
“Preference will be given to small-scale miners since they are the ones who extensively lobbied government compared to established miners, although their considerations are also being looked at,” Chimanikire said.
Finance Minister Tendai Biti was not immediately available for comment when his office was called by Bloomberg. The Chamber of Mines of Zimbabwe’s chief executive officer and chief economist, who are authorized to speak on behalf of the organization, are on leave, according to an official at the chamber who couldn’t be identified in line with its policy.
Zimbabwe earned $1.6 billion from mineral production from January to October, the chamber said in a Dec. 11 statement. The southern African country produced 12.48 metric tons of gold in the period, generating $657.6 million, while platinum output of 9.21 tons earned $404.7 million, the chamber said.
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