Gold is surging to record highs. For Zimbabwe’s formal gold producers, this is both a blessing and a headache.
Spot gold hit a record $4,967.03 on Friday, up 14% since the start of the year. Higher prices boost forex earnings for miners, but they also trigger higher taxes.
In his November budget, Finance Minister Mthuli Ncube proposed doubling the gold royalty rate to 10% for bullion sold above $2,501 an ounce. Miners warned this would erode profits and disrupt investment plans. Caledonia Mining, which is developing the Bilboes project, said the higher royalty, combined with a proposed tax on capital expenditure, would force it to reassess the project’s economics.
After lobbying from MPs and miners, Ncube amended the policy. The 10% royalty would now only apply if gold prices rose above $5,000 an ounce. Small-scale miners would continue to pay lower royalties of up to 2%.
At the time, gold was trading around $4,000 an ounce, and Ncube’s concession was widely welcomed. But prices have climbed far faster than expected, bringing the 10% royalty threshold into view much sooner than miners would have anticipated.
The rally is being driven by global political tensions, strong central bank buying and a broader de-dollarisation trend, with investors turning to gold as a safe haven.
Zimbabwe is not alone in trying to capture more value from the gold rally. In Ghana, Africa’s largest producer and the world’s sixth-biggest gold miner, the government plans to raise royalties to 9%, rising to 12% for prices above $4,500 an ounce, roughly double the current 3%-5% range. Ghana has also said it will scrap long-standing stability and development incentives that lock in tax and royalty terms for five to 15 years in exchange for investment.
Zimbabwe’s miners delivered a record 46.7 tonnes in 2025, 28% higher than 2024, beating the industry target of 40 tonnes.
