Govt imposes 1% tax levy on lithium, black granite...

Govt imposes 1% tax levy on lithium, black granite revenue

Nyashadzashe Ndoro

Government has imposed a 1 percent tax levy on lithium and black granite miners, which is expected to be ploughed back into the communities in which they operate.

Presenting the 2024 National Budget at New Parliament Building in Mt Hampden on Thursday, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube also announced a major mining policy change which requires lithium miners to submit beneficiation plans no later than March 2024, in a move aimed at boosting revenue from the processed mineral.

Before these decisions were made, lithium miners in the country were processing and exporting concentrates following last December’s ban on exports of raw lithium to encourage investment in local processing facilities.

Ncube said exporting concentrates would now attract an export tax.

“Any lithium value addition process that does not result in the production of lithium carbonate is not regarded as beneficiation, hence, is liable to an export tax Ncube.

“In terms of beneficiation, Prospect Resources Zimbabwe, Bikita Minerals and Zulu Lithium have successfully constructed lithium processing plants to beneficiate ore to the second stage of concentrate level.

“The aim is to beneficiate lithium up to carbonate level, fourth state of beneficiation in the medium term.

“The ultimate objective is the local manufacturing of lithium batteries for electric vehicles,” said Ncube.

Zimbabwe currently has the largest lithium reserves in Africa and due to growing global demand for the mineral, the country has witnessed huge investments into the lithium sector in recent years.

Lithium output is expected to increase to 1.1 million tonnes in 2024. However, miners were anticipating a cut on their 5% royalty fees, to give them relief from a sharp fall in global lithium prices.

Government is projecting a 7.6 percent growth in the mining sector driven mainly by ongoing investment in Platinum Group Metals, gold, coal and lithium.