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Platinum miners fret over export tax

Zimbabwe’s platinum miners, represented by the Chamber of Mines have engaged government over the omission of platinum export tax in the 2015 Finance Bill gazetted two weeks ago.

Platinum Miners are worried by the non deferment of export tax
Platinum Miners are worried by the non deferment of export tax

In a royalty update to shareholders on Friday, Mimosa’s parent company, Aquarius Platinum said “it was hopeful that the matter will be resolved and remains committed to building good working relations with the Government of Zimbabwe.”

In 2013, government proposed an export tax on unrefined platinum as a sweetener to encourage platinum mining companies to invest in a smelter and refinery of the minerals they mine.

The export tax calculated at a rate of 15% of revenue was deferred to take effect from January 2015. However, in his 2015 national budget statement made in December 2014, Finance and Economic Development minister Patrick Chinamasa announced that the government had deferred the export tax on unbeneficiated platinum until January 2017 much to the cheer of the platinum industry.

Now, the industry is rattled by the fact that 2015 Finance Bill, which was gazetted recently does not provide for the deferment of the export tax.

Implats, which holds 87% shareholding in Zimplats told shareholders on Friday that a 15% export levy on unbeneficiated platinum group metal (PGM) revenue in Zimbabwe became effective despite the earlier announcement of deferment.

“It is not clear whether the export levy will be formally enforced and the Group, in consultation with the Chamber of Mines in Zimbabwe, is presently seeking clarity from the authorities.

“Implats and its Zimbabwean operations remain committed to securing a conducive regulatory and fiscal framework for the mining industry in Zimbabwe,” said Implats.

Given the poor metal prices on the international market coupled with the head grade deterioration in most mines locally, the 15% tax is anticipated to impact significantly on the profitability of local platinum miners, which include Anglo America, Aquarius Platinum and Impala.

Mimosa’s head grade during the second quarter of 2015 slightly deteriorated to 3,63 grams per tonne, even though recoveries improved to 78%.

Zimbabwe holds the world’s second-largest platinum reserves after South Africa which is mined mostly the three big mines.

Policy inconsistency is one of the biggest challenges affecting investment sentiment in Zimbabwe with government bureaucrats often tripping each other by making contradicting statements on key policies such as Indigenisation and others. The Zimbabwe Mail

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