GOVERNMENT has reduced the rate of royalty for small-scale gold miners while it increased the rate for chrome producers, according to new rates gazetted last Friday. The rate of royalty on gold mined by small- scale producers will be reduced to 1 percent from 3 percent, Clause 18 of the Finance Bill of 2015 said.
The rate of royalty on chrome will be increased from 2 percent to 5 percent. This comes after Government lifted the ban on chrome exports to boost viability of miners and improve liquidity in the economy.
The Government is working on a Statutory Instrument to provide legal modalities for exporting chrome ore
“(Clause 18) . . . increases the rate of royalty on chrome mined and disposed of within or outside Zimbabwe from 2 percent to 5 percent,” read part of the Bill.
“At the same time it favours small-scale miners of gold by reducing the rate of royalty on gold from 3 percent to 1 percent.”
It is estimated that about 1,5 million people are engaged in artisanal mining activities, according to the Zimbabwe Miners Federation and 500 000 are directly employed by the sector.
However, only 25 000 are registered in accordance to the Mines and Minerals Regulations Act.
At peak in 2004, small-scale miners produced 17 tonnes before output fell to 12,5 tonnes in 2005.
Thereafter, gold remittances plummeted to 917kg before rising to 3,9 tonnes last year.
However, despite the potential the sector has in contributing to economic growth, some Government levies and royalties have resulted in many preferring to operate illegally.
Zimbabwe has capacity to increase gold output to more than 30 tonnes per year, according to the Reserve Bank of Zimbabwe. This would enhance the gold mining sector’s contribution to economic recovery, through the generation of foreign currency.
Despite the decline in international prices, gold production which had fallen to around 3,4 tonnes in 2008 has been steadily increasing since 2009 to reach 13,9 tonnes last year.
Over the past five years large-scale producers have contributed 75 percent to total gold production, while the balance was accounted for by small-scale miners. Increased monitoring efforts by the Gold Mobilisation Committee, Ministry of Mines, the Reserve Bank and the Zimbabwe Republic Police’s Border Patrol Unit, has seen the contribution of small-scale miners increasing steadily this year to current averages of 37 percent.
Gold deliveries during the first half of 2015 were 8,1 tonnes, and if the current trend of deliveries continues, gold production for the whole year would surpass 14 tonnes, said the RBZ.
The central bank is making efforts to facilitate gold production in the country through the arrangement of financing facilities which also include the mechanisation of small-scale producers’ operations. To date, $5 million has been disbursed for this purpose.