Tax On Raw Platinum Exports to Stay for Now
Money & Markets

Tax On Raw Platinum Exports to Stay for Now

President Robert Mugabe’s government first proposed the levy in 2013.

Zimbabwe will keep a 15 percent export tax on unrefined platinum for now because mines have failed to provide a roadmap on how they plan to set up a local refinery, Finance Minister Patrick Chinamasa said on Monday.

President Robert Mugabe’s government first proposed the levy in 2013 in an effort to push mines to process the metal locally.

In November, Chinamasa announced in a budget speech that he had postponed its introduction until January 2017 to give the firms time to build the smelting and refining plants.

But the government’s finance bill, which was published on Jan. 9, proposes its introduction from Jan. 1, 2015.

Chinamasa told Reuters in an interview that he had made his budget speech on the assumption that producers in Zimbabwe, which holds the world’s second largest platinum deposits, had a firm plan on setting up a refinery.

“There was some mistake on my part there in the budget statement. I had been made to understand by the chamber of mines that platinum producers had provided a roadmap towards establishment of a platinum refinery,” he said.

“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 which we had put in the finance bill to remain as is,” said Chinamasa.

Miners Aquarius and Impala said on Friday they were seeking clarity from the government over the tax, which, if enforced, would slash their margins.

With platinum prices already depressed, the tax would eat into the profits of companies with platinum assets in the country, which include Anglo American as well as Aquarius Platinum and Impala.

Chinamasa said the chamber of mines, which represents the mining companies was holding discussions with the ministry of mines.

Taxes are finalised on the 7th of each month for the prior month in Zimbabwe, so the industry should have clarity by Feb. 7.

Asked whether the government would change its position, Chinamasa said: “There are many ways to change this provision. But for now it is effective.”

Mining companies have previously said Zimbabwe’s infrastructure and energy supply was not adequate to run a big refinery and note excess refining capacity next door in South Africa.Rueters

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