Since 2018 Zimbabwe has re-focused its attention on the mining industry’s potential, thus re-structuring its policies and regulatory framework.  In this article our Mining Law Practice group outlines the Major Mining Tax Highlights for 2024.

The new Finance Act, 2023 (No. 13 of 2023),which came into operation on the 1^st of January 2024 implements most of proposals by the Minister of Finance in the 2024 National Budget which have an impact on the Mining Industry in Zimbabwe. Some of the major aspects which affect the Mining Industry include the following:

1.0 SPECIAL CAPITAL GAINS TAX
The Capital Gains Tax Act [Chapter 23:01] is amended by the insertion of section 30B which provides for a 20% special capital gains tax chargeable on entities acquiring mining title or any interest therein. The tax shall be chargeable on the value of the transaction. Further the tax applies to a transaction involving the transfer of a mining title acquired within the ten years prior to the 1^st of January 2024 or that acquired on or any time after the 1^st of January 2024.

The special capital gains tax shall be paid in United States Dollars or any other foreign currency at the rate of twenty percent of the total value of the transaction unless the transfer is subject to special approvals by the Minister.

The tax is to be paid no later than the 1^st of April 2024 for mining titles acquired prior to 1 January 2024. For mining titles acquired on or after the 1^st of January 2024, the tax is to be paid within thirty days after the transaction is concluded.

No transfer of a mining title shall be registered unless the special capital gains tax has been paid.

2.0 LEVY ON GROSS VALUE OF LITHIUM, BLACK GRANITE, QUARRY STONES AND UNCUT AND CUT DIMENSIONAL STONE
The Finance Act [Chapter 23:04] is amended with the insertion of section 22P which provides for a levy of one percent of the gross value of the sale within Zimbabwe or on export of lithium, black granite, quarry stones and cut and uncut dimensional stone.

3.0 STRATEGIC MINERALS
The Act amends the Mines and Minerals Act to insert a new section 3A which provides for “Strategic minerals.” These are minerals deemed strategic by virtue of their importance to the economic, social, industrial or security interests of Zimbabwe. The President, in consultation with the Minister of Mines and Mining Development, shall designate a mineral as a strategic mineral by publishing in the Gazette.

Special conditions on strategic minerals

• Any person wishing to mine a strategic mineral ought to obtain a special mining lease or a special grant.
• To be eligible for a special mining lease or grant, applicants must demonstrate their intention to invest at least one hundred million US dollars (or a lesser amount as prescribed by the Minister) during the lease or grant’s duration.
• Before obtaining a special mining lease or special grant, the person concerned must enter an agreement with the Minister of Mines and Mining Development concerning the formation of a company under whose name the special mining lease shall be held (and the state ought to have a defined stake in that company) and any special conditions relating to the exploration, exploitation, marketing or beneficiation of the strategic mineral, safeguards for the sake of the environment protection and any stakeholder ship to be extended to the community.

The Act further amends the Mines and Minerals Act to introduce a second schedule which provides a list of minerals deemed to be strategic minerals. Amongst the minerals are lithium, diamond, copper, mineral oils, nickel, coal and iron ore.

4.0 AGENTS FOR COLLECTION OF ROYALTIES IN KIND
The Finance Act, 2023 amends Chapter II of the Finance Act [Chapter 23:04] by the insertion of section 37C. In terms of the new section the Minister of Mines and Mining Development may appoint the Minerals Marketing Corporation of Zimbabwe, the Reserve Bank, Fidelity Printers and Refiners (Pvt) Ltd or any other person as a collecting agent of royalties in kind.

For assistance with mining law, kindly get hold of our mining law practice group on info@mmmlawfirm.co.zw