Miners seek relief from govt policies amid low met...

Miners seek relief from govt policies amid low metal prices

Nyashadzashe Ndoro

Staff Reporter

As the mining industry struggles to stay afloat amidst plummeting metal prices and crippling government policies, the Chamber of Mines is making a plea to Finance Minister Mthuli Ncube to review and revise the taxes and tariffs that are strangling the sector.

While Ncube prepares to deliver his mid-term budget statement, the miners are calling for a review of government policies that are affecting the industry.

The industry is struggling with low metal prices and high costs, and miners are warning that large-scale producers may be forced to scale back production unless taxes and tariffs are reduced.

The Chamber of Mines has identified several areas where government policy is impacting the industry, including the capital gains tax, royalties, tax on unprocessed platinum, forex retention, and power tariffs.

The capital gains tax, introduced in the 2024 budget, charges a 20% tax on gross proceeds from the transfer of mining titles. Miners are arguing that this tax is bad for business and are calling for it to be reduced to 5% and not backdated.

Royalties on platinum were increased by 180% last year, from 2.5% to 7%, which has added 5% to the cost of production for miners. The Chamber of Mines is recommending that royalties be determined by metal prices, with a 3% royalty when platinum prices are below US$1,100 per ounce and 5% when they rise above US$1,100/oz.

The tax on unprocessed platinum, which charges 5% on all platinum exports, is also being challenged by miners. They argue that the industry has a roadmap to set up a joint refinery to process concentrates locally and that the tax should be dropped.

The forex retention policy, which requires miners to keep 75% of their earnings in USD and pay the remaining 25% in local currency, is also affecting the industry. Miners are calling for the government to take more taxes in ZiG instead, which would free up foreign exchange for operational requirements and expansion projects.

The miners are urging the government to reduce power tariffs, which are currently at USc14.21/kwh. They recommend a tariff of USc10/kwh, warning that the current tariff is unsustainable and may lead to the scaling down of smelting activities in the PGMs industry.

The Chamber of Mines is urging Ncube to consider their proposals and review government policies that are affecting the mining industry.