PADENGA Holdings Limited has urged government to halve the 10% gold royalty applied when prices exceed US$5 000 per ounce, warning that the higher levy is stifling growth.
The miner — which has rapidly transformed from a crocodile producer into a largely gold-focused business — said the current royalty structure risks eroding profitability at a time it plans to invest US$40 million in exploration this year.
The government introduced the new royalty framework on January 1, setting rates at 3% for gold sold below US$1 200 per ounce, 5% for prices between US$1 200 and US$5 000, and 10% for prices above US$5 000.
The policy shift comes as global gold prices continue to surge. Prices rose 61% last year, with analysts forecasting the metal could reach between US$5 500 and US$6 000 per ounce.
The rally has boosted Padenga’s market value, with the company becoming Zimbabwe’s second most valuable listed firm after Delta Corporation Limited, reaching a valuation of US$1,04 billion last week.
Padenga now derives 94% of its revenue from mining, with the balance coming from its traditional crocodile farming operations.
But the group said the royalty structure threatens to eat into earnings as it expands production.
“I am happy to say that this year we have seen encouraging stability so far, and we hope that, in terms of monetary policy, interest rates, and exchange rates, remain that way,” Padenga chief finance officer Oliver Kamundimu told businessdigest in an interview.
- Delta shines as headwinds torment ZSE firms
- The role of PR & communications in 2022
- US dollar dividends are back: What does this signal?
- Padenga halts croc meat exports as EU tightens screws
Keep Reading
“However, when it comes to taxes that are not based on profit, such as royalties that go up to 10% on turnover for gold prices above US$5 000, we urge the authorities to consider maintaining them at 5%.”
Padenga’s call comes as the group recorded an 84% surge in cash flow to US$110,18 million last year, strengthening its capacity to fund capital projects.
Kamundimu suggested government could instead adopt a tiered structure.
“If a staggered system is preferred, the first US$5 000 should be charged at 5%, with only the amount above that threshold taxed at 10%,” Kamundimu said.
“Additionally, like every other business, we appeal to the authorities to reduce or eliminate IMTT (Intermediated Money Transfer Tax), as it is not a tax on profit but rather a tax on financial transactions, including payments for expenses.”
Padenga’s revenue rose 26% to nearly US$265,82 million in the year-ended December 31, 2025, driven largely by stronger gold prices.
Profit after tax almost doubled to US$70,7 million.
The group expects to produce 84 600 ounces of gold this year, broadly in line with its projections.
“This was very much in line with our projection,” Kamundimu said.
“That was in line with what we told the market last year when we predicted that we would produce 85 000 ounces. So, the price? We are a price taker, and the price actually did better than we expected on the gold side.”
