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Tapiwanashe Mangwiro-Senior Business Reporter

Platinum miners are seeking extension of the grace period on the 5 percent tax on export of semi-processed platinum to give them time to invest in value addition plants.

In efforts to nudge miners to invest in value addition, the Treasury in 2020 suspended the 5 percent tax to give the miners latitude to invest in value addition and beneficiation facilities.

The concession was granted for a period of two years after which the tax incentive would come into effect.

In a letter to Treasury chief, Finance and Economic Development Minister Prof Mthuli Ncube by Platinum Producers’ Association of Zimbabwe, chairman Alex Mhembere, said, “Can Treasury reconsider the policy and further defer the tax as this will allow the producers more time to invest in the beneficiation facilities while building sufficient feedstock.”

Mr Mhembere

Minister Ncube confirmed receiving the letter, dated January 24, 2022 and also said his office was considering the association’s request.

“The Treasury is analysing the matter and its implications, we will get back to them once we have concluded our analysis and reached a decision,” Minister Ncube said.

Platinum miners have made “significant progress” towards value addition facilities, Mr Mhembere said. 

Zimplats, for instance, plans to spend US$1,8 billion to expand mining and processing facilities, including rehabilitating an old base-metals refinery built by BHP Group, previous owners of the operation.

The mining companies have been investing capacity to increase production  in order for refineries to run profitably once the processing plants come on line.

Unki Mine, a unit of Anglo-America, last year invested US$48 million towards increasing its concentrator capacity, which is expected to boost output by 30 percent.

General manager, Walter Nemasasi, said at that time the new concentrator was expected to be commissioned sometime in September last year.

The new plant would be the mine’s second major value addition and beneficiation project after it completed a US$60 million smelting plant launched by President Mnangagwa in 2019.

The project was expected to increase production of platinum group concentrate at the plant by 30 percent and ultimately increase exports by the same margin.

The company said the project was so huge that it will increase production from 180 000 tonnes a month to 210 000 tonnes a month. 

The southern African nation generates more than half of its earnings from exporting minerals including gold, chrome and diamonds. 

Zimbabwe holds the world’s third-largest known reserves of platinum, which occurs with base metals including nickel and copper.

Zimbabwe envisions building a US$12 billion mining industry by 2023. Platinum group metal companies are expected to contribute US43 billion to the target.