Zimbabwe will no longer postpone a 5% tax on unrefined platinum exports, hoping to push producers to speed up plans to build a refinery in the country.
The export tax was first announced a decade ago at 15%, but it was then cut to 5% and postponed multiple times to give platinum producers time to set up a refinery. Now, the government says it will start charging the 5% in January, and that there will be no further postponements.
Currently, platinum producers process platinum into concentrates and mattes, which they export to South African refineries. But government wants them to refine platinum to the final product in Zimbabwe. In response, Zimplats, the country’s biggest miner, has budgeted US$190 million on its base metal refinery, which would also refine mattes from other miners. But the company has so far spent only US$29 million on the refinery, which is one of the projects that the company has put on ice in response to a collapse in platinum prices. The government wants that refinery done.
“Government has already introduced 5% beneficiation tax on the export of unbeneficiated platinum, with a view to compel mining houses to invest in the requisite plants. In addition, Government removed customs duty on the importation of the equipment required in the setting up of beneficiation plants, coupled with VAT deferment on the import tax payable,” the Ministry of Finance said Monday.
“Significant milestones that have already been achieved in the PGMs, with significant amount of investment in beneficiation plants on course to commission a Base Metal Refinery. With effect from 1 January 2025, Government will not grant any further reprieve from the tax, in order to compel mining houses to expedite completion of beneficiation plants.”
Previously, Zimplats said at full capacity, the refinery would produce 5 250 tonnes per annum of nickel (contained in crude nickel sulphate) and 106 tonnes per annum of platinum group metals cake (510 000 6E oz per annum 6E).
Zimbabwe has three platinum producers; Zimplats, Mimosa and Unki. Zimplats and Unki have smelters to process and convert platinum into mattes. Zimplats has just commissioned a new smelter. So far, Zimplats has spent US$412 million on the smelter expansion. However, the government wants producers to go beyond this. At Mine Entra last month, President Emmerson Mnangagwa said his government planned incentives to push mining companies to refine platinum in Zimbabwe. Previously, industry players said there is not enough output yet to justify a refinery in Zimbabwe, pleading for more time to build capacity.
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