Zimbabwe’s mining sector might not meet the 17% growth target projected by government due to softer international commodity prices and local systemic factors such as inadequate energy and suboptimal cost structures, the Chamber of Mines (CM) has said.
The mining sector is forecast to grow 17,1% this year from the 10,1% achieved last year, according to the chamber. It expects gold output to reach 17 000kg, from 14 742kg last year, while platinum output is expected grow to 12 500kg from 10 525kg.
Outgoing chamber president Winston Chitando told the miners’ annual meeting held last week that despite ongoing investment in the mining sector, as well as the resuscitation of nickel and asbestos mining, the sector has been dogged by a cocktail of charges which include royalties, corporate income tax, value added tax, capital gains tax, local authority charges, Environmental Management Agency charges, licence and registration fees, among others.
“These fees and charges continue to weigh down on the viability and competitiveness of the sector,” said Chitando.
He said the uncoordinated approaches by different government departments in levying these charges to mining companies, the continued increase in the levies, and the unpredictability of the mining tax regime was of major concern.
World Bank country economist, Nadia Piffaretti told the same meeting that what was important in any country was the capacity to create and re-invest in resource rents, even though these were not as straightforward as Zimbabwe was generally characterised by high costs of extraction and low grade deposits, which made exploitation non-economical.
Chitando said it was unreasonable for government to keep raising the rents as the country did not have high grade deposits. – Staff Writer.