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Minister Walter Chidhakwa

Zimbabwe is considering scrapping royalties levied on gold producers in order to boost output, Mines and Mining Development Minister Mr Walter Chidhakwa has said.

Gold miners pay three percent royalties after Finance and Economic Development Minister Patrick Chinamasa lowered the fees from five percent last year.

According to the Zimbabwe Revenue Authority, mining royalties contributed $62,9 million to revenue in 2016.

Zimbabwe earned $914 million from 21 tonnes of gold last year.

Since 2008 when the country produced three tonnes, its lowest ever, output of the yellow metal has been increasing.

This year the Government targets 28 tonnes of gold and at its peak in1999, Zimbabwe produced 29 tonnes.

Small-scale miners have contributed nearly 40 percent of total output since 2015 when Government decriminalised artisanal mining and embarked on an aggressive collection strategy, which saw the country’s sole buyer of gold Fidelity Printers and Refineries setting up buying depots across the country.

Last week, Minister Chidhakwa told delegates at a gold producers’ awards gala in Harare that the Government was considering removing royalties on gold earnings.

“Government cannot whip miners to force them to sell their gold to Fidelity . . . but we can offer an incentive,” said Minister Chidhakwa.

“We have been in discussions with the Minister of Finance (Patrick Chinamasa) to see how we can further incentivise miners and we are of the idea that we can do away with royalties.

“The Government does not even get much from royalties anyway but as a tax they stifle the miner.”

Gold is one of Zimbabwe’s main export earners that include tobacco and platinum. — The Source/Business Chronicle.