By Alois Vinga
THE Reserve Bank of Zimbabwe (RBZ) has set the conditions for 50% raw minerals royalties collections after being conferred with the responsibility by the government.
The development follows an announcement made by Finance Minister , Mthuli Ncube in his 2023 National Budget ordering mining companies to pay 50% royalties through physical submission.
While some sections of society have questioned the policy initiative describing it as “backward” , authorities contend that the initiative will be a buffer to past under declarations of proceeds by miners and cascade the benefits derived from the underneath down to the ordinary citizens.
The central bank governor, John Mangudya said with effect from October 1 2022 , miners of gold , diamonds , platinum and lithium and any other precious stone or precious or valuable metal specified by the Bank by notice in a statutory instrument shall be enjoined to pay 50% in royalties due to the State in kind , that is in the form of the mineral concerned.
“The rationale of the legislative changes is to enable the bank to collect ,hold and manage the reserve assets for the benefit of the Republic of Zimbabwe and as such all in kind royalties shall be delivered to the Bank.
“The delivery of in-kind royalties to the Bank, and holding, maintenance and subsequent marketing of the same shall be subject to and in compliance with applicable industry practices and regulatory requirements,” he said.
The RBZ said it shall be the responsibility of the bank to facilitate the collection or delivery of the in kind portion of the royalties and the for the avoidance of doubt, only the cash portion shall be collectible by ZIMRA.
In order to ensure that the value of the reserve assets held is preserved or enhanced , the central bank said it shall have the discretion to determine which prescribed mineral or metal to keep ,hold or maintain from time to time , as dictated by prevailing local and international economic conditions and commodity pricing trends.
“In line with its mandate to hold, maintain and preserve the value of the reserve assets, where the bank considers and determines that it is not economical or possible to keep any mineral or metal.
“It shall facilitate and make arrangements that the portion of royalties paid in kind is converted to cash which the Bank will utilise to procure and purchase another specified mineral or metal, for the equivalent value, which it will keep as a reserve asset,” added Mangudya.