(NEWZIMBABWE) Zim doubles platinum mining royalties

Zim doubles platinum mining royalties
26/11/2011 00:00:00
by Reuters

ZIMBABWE will double platinum royalties to ten per cent, the country's finance minister, Tendai Biti, has said. In an economy expected to expand by 9.3 per cent this year, mining and agriculture are the two biggest drivers, reports Reuters.

Biti said the mining sector has attracted $502 million of investment this year, despite plans to force mining companies to hand over a 51 per cent equity to local black investors.

He argued that in spite of growth in the industry, however, the government is not receiving enough in taxes and will hike royalties to seven per cent for gold and ten per cent for platinum.

"We don't feel that we are getting what belongs to Caesar vis-a-vis gold and platinum. I therefore propose to increase the royalties on gold and platinum ... in order to maximise the contribution of our minerals," Biti was reported as saying.

However, it is anticipated that further pressure on the mining sector could deter investment in the country, which has the world's second largest reserves of platinum.

"The economy, which is growing off a low base, could even grow by as much as 15 per cent. My biggest concern is on the mining royalties which are going to have a tremendous effect on mining operations, which are still recovering from a slump," economic analyst Eric Bloch told Reuters.

[More neoliberal nonsense from Eric Blochhead. - MrK]

In spite of these concerns, Impala Platinum recently confirmed that it will invest in a third expansion project at its Zimbabwe unit Zimplats to increase production to 360,000 oz/y of platinum.