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Wednesday, June 7, 2023

New mining royalty structure given thumbs up

By Owen Mandovha

Analysts have welcomed the new mining royalty structure introduced by Treasury through the 2023 national budget saying it will preserve the country’s mineral wealth and entrench the use of the local currency.

The new structure resonates with the country’s development aspirations of maximizing the finite huge mineral endowments of the country whereby settlement of royalties will be done partly in the form of commodities.

Apart from that, 40 per cent of the royalties will be paid in local currency in what prominent economist Persistence Gwanyanya regards as an entrenchment of the use of the Zimbabwe dollar.

Economist, Mr Persistence Gwanyanya said, “The requirement that 40 per cent of the royalties due to Government by mining companies be paid in local currency feeds well into our quest to increase the use of the Zimbabwe dollar because obviously, it will prop up its demand.”

Secretary of the National Business Council of Zimbabwe, Mr Langton Mabhanga described the new royalty regime as transformative in establishing a minerals bank.

“Minerals are irreplaceable, hence the creation of a mineral bank through royalties means that future generations can tap into the resources,” he said.

Mining reforms which are being instituted by Government are bearing fruit as evidenced by the growing mining output and earnings.

The new royalty is therefore expected to further anchor that growth trajectory to meaningfully benefit citizens.

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