HARARE: Zimbabwe has put the brakes on a plan to levy a 15% tax on unbeneficiated platinum group metals (PGMs).
The levy would not be implemented until current discussions between platinum miners and Government were finalised, said Walter Chidhakwa, Zimbabwe’s mines minister at an Indaba of mining executives and government officials at Victoria Falls today.
The mineral rich southern African country has the world’s second largest platinum reserves after South Africa. These deposits have attracted investment from Anglo American Platinum (Amplats), Impala Platinum (Implats) and Aquarius Platinum as well as Russian investors which are developing the Darwendale project.
A government directive that platinum miners build beneficiation and refining facilities in Zimbabwe had raised alarm among executives of the platinum mining groups who said it was unviable.
Chidakwa said only Zimplats, which is controlled by Implats, had so far shown it had the capacity to refine the precious metal inside the country. Mimosa, in which Implats and Aquarius were invested, and Amplats’ Unki, were still required to provide plans detailing how they would comply with the directive.
“I am unhappy with the fact that platinum concentrate has not been going out (of the country),” said Chidakwa. “No minister wants to see a reduction in production. We must continue to earn what we were earning from mining if not increasing the value,” said Chidakwa
“I want to call upon the Zimbabwe Revenue Authority (ZIMRA) to enable the platinum companies to export and then if we have not finalised, then can charge the 15% levy,” he said.
Mimosa executive chairman, Winston Chitando, said that the company was still engaging the government with regards to its plan while Amplats said previously that Unki mine had not yet reached sufficient scale to justify a refinery.
Alex Mhembere, outgoing president of the chamber of mines of Zimbabwe, said that “…the outlook for most of the minerals that we produce in Zimbabwe is unstable”. He called on the government to “improve on policy consistency”.
Investors in Zimbabwe have to beat higher levies, numerous mining fees, growing problems from illegal miners, calls for local beneficiation, and power outages that have reduced productivity.
Lack of exploration is a worry that industry executives in the country believe will render mining projects unsustainable. Worsening the issue was the government’s reluctance to process export applications.
The Chamber of Mines has called for “confidence building measures” to attract investors into mineral exploration in Zimbabwe.
Most miners in Zimbabwe had reportedly shelved expansion projects. Mimosa, the Zimbabwe joint venture of Implats and Aquarius Platinum, recently abandoned sinking a second shaft at its mine.
