Gold producers hail royalties review

GOLD PICNelson Gahadza Business Correspondent
The Gold Producers Federation says the recent review of gold mining royalties by Government is a positive step which will address the viability challenges facing the gold sector.Finance Minister Patrick Chinamasa in his mid-year fiscal statement reviewed downwards the royalty on gold produced by primary producers to 5 percent from 7 percent while presumptive tax on small scale gold miners to 0 percent from 2 percent.

In an interview, Gold Producers Federation chair Ian Saunders said gold production in the country has potential to improved viability challenges.

“The downward review of on royalties is a positive step to us. This points to some positive developments in the sector which will cater for capitalisation and equipping of gold mining companies,” he said.

He said Government, however, still needs to do more to address challenges such as power costs which are too high.

On the other hand Mwana Africa CE Kalaa Mpinga who owns Freda Rebecca gold mine said the downward review which is effective 1 October 2014 will provide a financial boost for its operations.

“We have actively engaged with Government on this issue and it is very pleasing that in a spirit of understanding and co-operation it has recognised the challenges inherent in the gold mining industry at present.

“The reduction in the gold royalty rate will provide a welcome financial boost to Freda Rebecca and Mwana,” he said.

Mwana has an 85 percent interest in and operates the Freda Rebecca gold mine at Bindura in Zimbabwe’s Mashonaland Central province.

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