Zimbabwe lays down platinum levy ultimatum

Zimbabwe lays down platinum levy ultimatum

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Zimbabwe want a pgm refinery
Zimbabwe wants a pgm refinery
Zimbabwe wants a pgm refinery

Zimbabwe has threatened to impose a 15 percent levy on platinum group metal (PGM) miners operating in the country if a plan is not agreed on building a PGM refinery.

Officials say that the government has called for ‘a concrete plan’, which must be submitted before February 10. Levies and tax collections in Zimbabwe are finalised before the 10th of every month. ‘It’s an issue that senior government ministers were seized with over the past few months and there is a feeling that the platinum miners are dragging their feet on the issue,’ a government official told the online Miningmx.

The proposed levy would be on unbeneficiated ore or metal in concentrate whereas South African platinum miners operating in Zimbabwe contend they export matte, a product where a level of value is added. However, the Zimbabwe government is thought to be applying the levy to all unfinished products across the metals suite, not just platinum group metals. As such the levy would be applicable to all producers although the Zimbabwean government has lauded advances Zimplats has made in planning for a refinery.

‘It is only Zimplats which has a solid plan and although there is a collaborative effort to this, the initial stages of its plan will (only) treat its own material,’ the official said. ‘This has caused worries for us because we need to see a plan that includes all operators,’ he said.

Finance minister Patrick Chinamasa
Finance minister Patrick Chinamasa

Zimbabwe finance minister, Patrick Chinamasa, said in his 2015 budget statement last year that the 15 percent levy on exports of platinum that is not beneficiated inside the country had been deferred to 2017 from January this year. However, the 2015 Finance Bill makes no mention of this, prompting platinum companies in Zimbabwe to seek clarification on the issue. It then emerged in an article by Reuters that the levy will be applied after all. Zimbabwe’s deputy mines and mining development minister, Fred Moyo, said his ministry was still consulting with the finance minister.
‘The minister [of mines]was deliberating on the issue to find a solution with the finance minister and I will get a position from him,’ he said referring further questions to mines minister Walter Chidakwa. Chinamasa was quoted by Reuters saying he had made a mistake in the budget statement after being made to believe by the chamber of mines that the platinum producers ‘had provided a roadmap’ towards establishment of a refinery facility.
‘So when there was a non-existent roadmap, because they had been given this warning two years back and there was nothing to show for it, I then decided to keep the provisions,’ he added.

Johan Theron, spokesperson for Implats, said in a statement early February that the levy had as of now not been implemented. The platinum producers association in Zimbabwe is expected to air its views on the issue, while mining industry sources said the chamber of mines was now scrambling for a way out of this situation. Executives with the platinum mining companies in Zimbabwe said they were continuously engaging with the Zimbabwean government although they insisted that they had put forward plans to achieve mineral beneficiation in Zimbabwe.

‘The implications of the immediate implementation of the export tax are detrimental to the affected companies and the economy. This will compromise any expansion projects and also likely to cause a cut back in capital expenditure, retrenchments, company closures and add confusion to our ability to attract foreign direct investment,’ said the Buy Zimbabwe pressure and lobby group.

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