IMPUY Impala Platinum Holdings Ltd (QX)

By Yusuf Khan

Miners operating in Zimbabwe will have to pay some of their royalties to the country using refined metal, with the country seeking to expand its national reserve of strategic minerals.

In his column in Zimbabwe's The Sunday Mail, President Emmerson Mnangagwa said that the government was establishing a new policy of accumulating precious and high value minerals to build up a strategic stock of gold, diamonds, platinum group metals and lithium.

As part of this, miners will now have to pay the government part of their royalties as refined metal, having previously paid only a fee to the government for being able to mine within the country.

The president said that this would allow Zimbabwe to both build physical reserves of precious and strategic minerals while also ensuring revenue for the day-to-day running of government business.

He added that the country's policy toward mining royalties should respond to resource scarcity and global demand trends.

Zimbabwe, like its neighbor South Africa, is home to vast mineral resources--especially precious metals--with major mining firms like Anglo American PLC and Impala Platinum Holdings Ltd. operating in the region. Despite this, poor infrastructure and power problems has been an issue in terms of expanding the industry.

President Mnangagwa said this policy would be in effect from this month onwards with the reserves being held by the Reserve Bank of Zimbabwe.

Impala Platinum, which mines PGMs in the country under Zimplats Holdings Ltd., said it was working with the Chamber of Mines to better understand the "evolving mining policy" in Zimbabwe.

It added that paying royalties in U.S. dollars and/or partly paying in equivalent metal product doesn't materially alter the cost burden in Zimbabwe on face value.

"However, this potentially constitutes a significant shift in fiscal policy, especially considering governments present ability to acquire refined metals through U.S. dollar revenue received," the company said.

Write to Yusuf Khan at yusuf.khan@wsj.com

(END) Dow Jones Newswires

October 10, 2022 09:47 ET (13:47 GMT)

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