Martin Kadzere
Zimbabwe’s miners are seeking targeted royalty reforms and tax relief across key minerals, which they contend guarantee fiscal protection through price-linked clawbacks and strict reporting milestones.
The Chamber of Mines of Zimbabwe (COMZ)’s proposals to Treasury seek to protect the fiscus by tying royalties to price surges, while granting conditional relief to distressed subsectors, settling arrears and refunds through tax offsets and requiring producers to report beneficiation milestones, output and jobs.
The mining sector stands as the largest export earner, with earnings projected to surpass US$10 billion this year from US$8,5 billion in 2025— driven by strong gold, platinum group metals and lithium prices.
Earnings were further boosted by major milestones in local beneficiation, with 95 percent of minerals undergoing processing even as the Government pushes for further downstream value addition.
Output in the first half of 2026 stagnated or contracted across several subsectors due to high production costs, power constraints and depressed prices for base metals and diamonds.
“The proposals have been designed to protect the fiscus; price-linked royalties raise Government’s take automatically when prices rise, relief for distressed subsectors is temporary and conditional, arrears and refunds are settled largely through tax offsets rather than new cash and producers will report beneficiation milestones, output and jobs to Treasury and the Ministry of Mines,” the chamber said in its 2027 National Budget submission to the Ministry of Finance.
For the diamond sector, the chamber proposes temporarily slashing royalties from 10 percent to 2 percent of gross sales, subject to annual review and an automatic step-back once prices recover.
Producers requested a cut in the Radiation Protection Authority of Zimbabwe’s annual X-ray machine licensing fees from US$50 000 to US$10 000 per unit, noting that large miners currently pay over US$500 000 annually.
The appeal is driven by a sharp downturn in the subsector, with output falling by about 72 percent in the first half of 2026 to 786 650 carats from 2 815 million carats in the same period in 2025.
Average prices dropped 70 percent over five years from US$74,24 per carat in 2021 to US$22,12 in 2025, forcing Murowa Diamonds into voluntary corporate rescue and halting operations at Anjin Investments.
“Without urgent and targeted fiscal interventions, Zimbabwe risks further mine closures, significant employment losses, reduced foreign currency and export earnings and permanent loss of strategic diamond production capacity,” the Chamber warns.
“On lithium, the chamber proposes retaining a seven percent royalty on lithium concentrates, while introducing a 3 percent royalty on beneficiated sulphates and carbonates to support capital mobilisation.
It further requests reducing the mineral levy from 3 percent back to 1 percent, halving export Value Added Tax (VAT) on concentrates from 10 percent to 5 percent and extending the January 1, 2027 beneficiation deadline to December 31, 2027 against verifiable milestones.
The relief aims to sustain momentum in the sector, which earned US$2,3 billion, or 46,1 percent of total sales, in the 10 months to October, through spodumene concentrate, lithium sulphate and petalite sales.
The chamber said producers are investing over US$1,2 billion across five lithium sulphate plants, including Prospect Lithium Zimbabwe’s facility, already operational and expected to employ 3 000 people.
Turning to gold, the chamber is appealing to the Ministry of Finance to adopt a graduated royalty scale applying the 10 percent rate strictly to incremental value above US$5 000 per ounce. The proposals seek to eliminate a “distortion” where royalties double to 10 percent across the entire value of gold sales once prices exceed US$5 000 per ounce, leaving miners with less net revenue at US$5 001.
In the PGMs, the chamber proposes replacing the flat seven percent platinum royalty with a progressive price-linked framework.
The framework applies a five percent royalty for prices below US$1 700 per ounce.
A seven percent royalty applies when prices range between US$1 700 and US$3 000.
The rate would increase to eight percent for prices between US$3 000 and US$4 000.
A nine percent royalty would be levied for prices between US$4 000 and US$5 000, while prices above US$5 000 attract a 10 percent royalty. Producers cited severe liquidity strain caused by delayed local currency (ZiG) disbursements for the surrendered portion of export proceeds.
“This royalty framework is in line with best practice and has also been successfully applied in Zimbabwe for the gold sector,” the chamber notes, arguing it protects miners during downturns while maximising taxes during price booms.
For base metals, the chamber proposes application-based, distress-linked fiscal relief for chrome and nickel producers, strictly tied to job retention and maintaining production until prices rebound.
The appeal follows sharp first-half output contractions across the subsectors.
Chrome output fell 63 percent to 353 013 tonnes from 956 669 tonnes, though high-carbon ferrochrome jumped 70 percent to 166 941 tonnes.
Nickel production dropped 20 percent to 5 225 tonnes, while coal declined 20 percent to 3,1 million tonnes.
Beyond mineral-specific adjustments, the chamber has recommended allowing exporters to settle income tax and royalties on a 60:40 local-to-foreign currency split and aligning ZESA power billing with the 70 percent foreign currency retention threshold.
It also sought automatic tax offsets for verified VAT refunds, an off-road diesel duty rebate and a three-year fiscal stability roadmap.
Economic analysts have welcomed the “balanced framework,” noting that tying state revenues to commodity price movements safeguards public finances while offering breathing space to the miners.
“In my view, this framework strikes the right balance between maximising public revenues during a commodity boom and ensuring operators remain viable when market conditions turn hostile,” independent economic analyst, Mr Carlos Tadya told The Sunday Mail Business in an interview.
Conditioning tax reliefs on strict job retention and reporting milestones, he observed, provides a transparent safeguard against speculative concessions, ensuring that “State interventions directly benefit national economic output.”
Critics have cautioned that slashing royalties and granting broad tax concessions could set a dangerous precedent, potentially eroding public revenues needed for social services. Policy analysts argue that lowering fiscal inflows such as cutting lithium mineral levies, transfers too much commodity risk “onto the public purse while padding corporate balance sheets.”
The Chamber of Mines hopes some of these proposals will be taken into account when Finance Minister Prof Mthuli Ncube presents the 2027 National Budget, expected on November 19, 2026.
