Zimbabwe gold mines face closure

The punitive royalty charges leveled against mining companies is likely to result in the closure of more than 75 percent of gold mines in the country in the next three months, the Zimbabwe Chambers of Mines has said.

Addressing the Parliamentary portfolio committee on finance and economic development today, Chamber of Mines chairman for Gold producers committee Mr Ian Saunders said there was urgent need for Government to review policy on royalties and taxation of mining companies to allow them to.

"In our view there is no policy thrust to fundamentally drive primary exploration, development and growth in the industry.

"There are serious viability issues in the gold industry and our assessment is that, within 90 days, 75 percent of the gold mines in this county will be shut unless there are policy changes. In short, royalties are too high," he said.

He said the gold mining industry is facing the same challenges that others in other sectors are facing and these are being exacerbated by the high royalty fees and taxes.

According to the Chamber, the increase in non-deductibility of royalties resulted in the increase in royalties for diamonds from 15% to 18%, platinum from 10% to 12%, and gold from 7% to 8,75% for large scale miners.