Govt mulls mining fees review

exploration fees was meant to discourage the holding of mining claims for speculative purposes.
But the impact should not prevent growth.
“The Ministry (of Mines and Mining Development) is presently reviewing the impact of these fees on the mining sector in line with targeted objectives,” said Minister Mpofu in a speech read on his behalf by his permanent secretary, Mr Prince Mupazviriho, at a mining workshop in Harare yesterday.
For diamond miners, the prospecting fee now stands at US$1 million, while a fee of US$5 million will be required to register a claim.
The exploration fees for coal, coal-bed methane gas, mineral oils, natural gas and nuclear energy mineral resources will be US$100 000.
Government also increased royalties on gold to 7 percent from 4,5 percent.
The mining sector is expected to grow by 15,8 percent this year and will underpin the estimated 9,4 percent growth in Gross Domestic Product, according to estimates by Finance Minister Tendai Biti.
Mineral exports will also increase by 38 percent to US$2,6 billion, largely driven by platinum, gold, diamonds and coal.
Analysts say the mining fees were “most likely” to discourage investment into the sector, which has been the key driver of the economy.
The sector requires between US$3,5 billion and US$5 billion to recapitalise.
In an interview on the sidelines of the workshop, Mr Mupazviriho said Government was in talks with the mining industry on the possibility of reducing the fees if they were a deterrent to growth.
“If it is the case (that the fees are discouraging growth), then it means we can review the fees. We are already talking with the industry,” he said.
Earlier, Chamber of Mines president Mr Winston Chitando had warned that high royalties might result in more mineral resources being left unexploited.
“The fact of the matter is that with our resources being generally of low grade, difficult to mine and very sensitive to the cost model, the level at which royalties are currently pegged is resulting in the sterilisation of our resource,” he said. 
“If these resources are left behind, the chances are (that) they will never be exploited (in future).
“It is much better for Government to participate in the profits after-tax than charge royalties which, without doubt, compromise the long-term resource base of the country.”
Mr Chitando is also chief executive of Mimosa Platinum Mines.
Yesterday’s workshop was organised by the Chamber of Mines and was attended by senior Government officials and captains of industry.