Business - Featured - Local - Mining - Top Stories - June 7, 2021

Optimal mining regime to drive economic growth

Zimbabwe’s attainment of vision 2030 is premised on the mining sector, and the maximum benefits can be derived by value addition and beneficiation, Minister Mthuli Ncube said.

Mining is strategically imperative to Zimbabwe’s economy, accounting for approximately three quarters of its annual receipts.

Presenting at the Zimbabwe Annual Mining Conference 2021, Finance and economic development Minister Mthuli Ncube said research has shown that mineral extracting economies grow much slower than mineral value adding economies.

He also underscored the need to translate mineral resources into improved economic development and improved fiscal revenues, basing on the National Development Strategy 1’s thrust is to promote mineral beneficiation and value addition.

The sector is shaking off the negative effects of COVID-19 which affected global value chains and impacted demand for commodities and it is on a strong rebound on the back of firming commodity.

“Government has established the Zimbabwe Investment Development Agency which is a one stop shop for investment and it is expected to expedite the investment process through promoting and facilitating both local and foreign investment,” Ncube said.

In a bid to promote investment in the mining sector, Government has over the past years reviewed the mining fiscal regime by downward review of corporate income tax from 25% to 24%, deductibility of royalties on assessment of corporate income tax downward review of royalty rate on diamond from 15% to 10%, a sliding scale royalty rate for gold which takes into account price fluctuations and 5% for prices above US$1200 per ounce, 3% for prices below US$1200.

“The mining sector is critical for the success of the NDS1 and government will therefore will fully support investment in the mining and indeed other sectors as we pursue the National Vision of becoming an upper middle income economy by 2030,” Ncube said.

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