As part of efforts to boost its coffers, that have come under strain from debilitating economic conditions, Zimbabwe plans to increase royalty rates on platinum producers and introduce one for lithium miners from January next year.
The rate for platinum miners will double to 5% and a new rate of the same amount will apply to lithium producers, Finance Minister Mthuli Ncube said in his mid-term budget review.
Ncube stated this in a presentation to at the parliament in the capital, Harare, on Thursday. “Mindful of the fact that the tax regime is the main instrument for sharing benefits from finite minerals and also provides an important source of government revenue, it is necessary to maximize revenue to the fiscus,” he said.
Rising lithium prices have drawn investors to Zimbabwe. Chengxin Lithium Group Co. and Sinomine Resource Group Co. are setting up a joint venture to explore for the metal and Zhejiang Huayou Cobalt Ltd. plans to invest $300 million to develop its Arcadia lithium mine.
Zimbabwe holds the world’s third-largest known platinum reserves, after Russia and South Africa. Platinum producers in the country include units of Zimplats Holdings Ltd. and Anglo American Platinum Ltd.
Citing the global economic slowdown, Ncube announced the measures, cutting the nation’s economic growth forecast for this year to 4.6% from 5.5% at the end of last year. Growth is being dented by Russian-Ukraine war, the intensification of sanctions on Russia, soaring inflation and a depreciating currency.
Zimbabwe’s inflation rate jumped to 250% in July, the highest level in eighteen months, as fuel and food costs more than doubled.