Thursday, March 07, 2013

(NEWZIMBABWE) Zimbabwe to increase raw platinum export tax

Zimbabwe to increase raw platinum export tax
06/03/2013 00:00:00
by Roman Moyo

ZIMBABWE plans to raise royalties payable by platinum miners to make producers process the metal in the country, Mines Minister Obert Mpofu said Wednesday.

Mpofu, who would not be drawn on the level of the proposed increase, said the move is meant to force platinum producers to start processing the mineral locally.

Zimbabwe, which has the largest platinum reserves in the world after South Africa, charges a 10 percent royalty on platinum, according to the ministry.

“We have become a source of cheap raw material and we need to improve on the value of our minerals especially our precious minerals and that should stop,” Mpofu told journalists in Harare.

“We are going to introduce a graded system for royalties. Those that export semi-refined products will pay a certain level of royalties but if it (mineral) is refined, the level of royalties will be reduced.”

Mpofu also reiterated a government announcement last month that platinum producers had two years to establish a local refinery.

“We want within two years to have a refinery for platinum,” he said.
Finance minister, Tendai Biti, doubled platinum royalties to ten percent when he announced the 2013 National budget.

Biti said the mining sector has attracted US$502 million of investment this year, despite plans to force mining companies to hand over a 51 percent 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 do not feel that we are getting what belongs to (us) 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, industry observers have warned that further pressure on the mining sector could deter investment in the country, which has the world’s second largest reserves of platinum.

Mpofu however said the government also expected diamond producers to begin processing the gems in the country.

“As for diamonds and other precious minerals, we want you to lead the process of value addition. The Minerals Marketing Corporation of Zimbabwe (MMCZ) should take a lead and others can follow. That is your mandate,” he said.

“We cannot continue selling our minerals for nothing. I mean there is a shortage of diamonds in the world right now and the price is supposed to be very high but because of certain challenges that our diamond sector is facing because of sanctions, people are actually getting our diamonds for next to nothing because they are discounted.”

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