HARARE– The Reserve Bank of Zimbabwe (RBZ) has started collecting 50 percent of mining royalties in the form of the concerned mineral, in line with a Statutory Instrument issued in late 2022.
RBZ Governor John Mangudya announced in a statement Wednesday that the collection is due from Oct. 1, 2022.
Prior to the latest arrangement, all royalties, which were due in monetary form, were paid to the government revenue collector, the Zimbabwe Revenue Authority (ZIMRA).
Mangudya said following amendments to the Finance Act and the Reserve Bank of Zimbabwe Act, respectively, providing for the collection of 50 percent of royalties in kind and the bank to maintain, over and above gold, reserve assets in the form of diamonds, platinum and lithium, the bank would start making such collections.
The law also covers other precious stones or valuable metals specified by the bank.
“With effect from Oct. 1, 2022, miners of gold, diamonds, platinum and lithium (and any other precious stone or precious or valuable metal specified by the bank by notice in a Statutory Instrument) shall be enjoined to pay 50 percent of royalties due to the State in kind, that is, in the form of the mineral concerned,” he said.
He added that the rationale for the legislative changes was to enable the central bank to collect, hold and manage reserve assets for the benefit of the country, and as such all in-kind royalties shall be delivered to the bank.
“The delivery of in-kind royalties to the bank, and holding, maintenance and subsequent marketing of same, shall be subject to and in compliance with applicable industry practices and regulatory requirements.
“It shall be the responsibility of the bank to facilitate the collection or delivery of the in-kind portion of the royalties and for the avoidance of doubt, only the cash portion shall be collectible by ZIMRA,” he said.
Mangudya added that in order to ensure that the value of the reserve assets held was preserved or enhanced, the bank would have the discretion to determine which prescribed mineral or metal to keep, hold or maintain from time to time, as dictated by prevailing local and international economic conditions and commodity pricing trends.
He also said where the bank considered and determined that it was not economical or possible to keep any mineral or metal specified in terms of the law, it would facilitate and make arrangements that the portion of the royalty payable in kind was converted to cash.
The central bank would then use the cash to buy another specified mineral or metal, for the equivalent value, which it would keep as a reserve asset.
Zimbabwean President Emmerson Mnangagwa, in November 2022, published a Statutory Instrument requiring miners to pay royalties under the new arrangement.
Of the 50 percent that is paid in cash, 10 percent is in foreign currency, with the rest being in local currency. – Xinhua