Golden Sibanda Senior Business Reporter
Platinum mining firms have warned that the 15 percent levy Government imposed on raw platinum exports could lead to a collapse of the strategic industry. The export tariff took effect at the beginning of January and is levied on the gross value of minerals exported. Platinum Producers Association of Zimbabwe chairman Mr Herbert Mashanyare said the impact of the raw platinum export levy, 10 percent royalties and Minerals Marketing Corporation of Zimbabwe 0,875 percent levy could bring the industry to its knees.
Mr Mashanyare said from the financial results of Impala Platinum, which controls Zimplats and partly Mimosa, the impact of the export levy was blatantly evident.
“If you take the 0,875 MMCZ levy, the 10 percent royalty and 15 percent (export) levy over and above that; you have no industry. Obviously, there are ongoing negotiations and discussions around that,” he said.
Mr Mashanyare said the raw platinum export levy could lead to a “complete” and “total” collapse of the platinum mining industry if the situation remained unchanged.
He said even if the price of platinum doubled, the export levy would still have a negative impact on the profitability and viability of the platinum mining companies.
Mining is strategic to Zimbabwe’s +/-$10 billion economy and is anticipated to drive growth in the medium term. The sector accounts for just over 16 percent of gross domestic product, marginally ahead of agriculture and accounts for more than 50 percent of exports.
Further, mining is one of the four main clusters contained in Government’s medium-term economic blue print, the Zimbabwe Agenda for Sustainable Socio-economic Transformation covering the period 2014/ 2018.
Zimbabwe has three platinum producing mining companies namely Implats’ 87 percent owned Zimplats, Implats and Aquarius joint owned Mimosa Mining Company and Anglo-American unit Unki Mines.
The three platinum mining firms are found in the Midlands Province districts of Zvishavane and Shurugwi. They produce about 430 000 ounces exported to South Africa, where the precious metal is refined.
Zimbabwe is home to second biggest known reserves of platinum in the world after its neighbour South Africa. It wants miners to set up beneficiation facilities in the country amid strong suspicion Government is not receiving optimal returns from the mineral.
It was against this background that Finance Minister Mr Chinamasa introduced the 15 percent levy on raw platinum exports in January and upheld ex-Mines and Mining Development Minister Dr Obert Mpofu’s position of banning raw platinum export by the end of this year. Dr Moyo had given the miners a two year ultimatum.
However, Mr Mashanyare said that Government needed to soften its hard-line stance on the miners since the miners had also embarked on beneficiation initiatives in response to calls to set up beneficiation facilities.
However, Mines and Mining Development Minister Walter Chidhakwa told amines annual meeting in Victoria Falls in May that Government may still ban raw platinum exports if producers cannot do enough to set up precious metal refinery in the country by year end.
Zimplats has already advised that it would start work to resuscitate it Base Metal Refinery in Selous, about 80 west of Harare, this year at a cost of $100 million.