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Harare Squeezes Mining Companies Tighter

Zimbabwe will double the royalty rate it charges mining companies on the platinum group metals (PGMs) they produce to 5% from January 2023 in a bid to increase government revenues, said finance minister Mthuli Ncube. The country is the third-largest producer of platinum, after SA and Russia, with major miners Anglo American Platinum, Impala Platinum, Tharisa and Sibanye-Stillwater operating there. Presenting a midterm budget in parliament, Ncube said government income from the mining industry was low due to what he called “a generous royalty regime on some major minerals”. Ncube also proposed a 5% royalty rate for lithium, a mineral that is drawing investor interest in Zimbabwe, which holds some of the largest hard-rock lithium deposits in the world, as demand for battery minerals grows. Mineral exports from Zimbabwe, mainly gold and PGMs, reached $5bn in 2021, accounting for 80% of the country’s total export value. Ncube expects total export earnings to increase 16% to $7.3bn this year, buoyed by commodities. He lowered 2022’s economic growth forecast to 4.6% from 5.5% but saw growth picking up to 5% next year. Ncube linked the lower 2022 forecast to the global economic environment and domestic factors like reduced agricultural output.