Only 1% of Zimbabwe mining revenues go to taxes

A new report by the SIVIO Institute has raised alarm over weak transparency and minimal community benefits in Zimbabwe's multibillion-dollar mining sector, despite its pivotal role in driving the economy.

Titled "Mining and the Development Agenda: An Overview of Revenue Reporting in the Mining Sector," the study highlights that while mining contributes about 12% to Zimbabwe's GDP and over 75% of export earnings, its overall impact on inclusive development remains marginal.

"Do mining activities and revenues contribute towards widespread economic development?" the report questioned, warning that the industry continues to function "as an enclave in a sea of underemployment, benefiting a few while the majority remain marginalised."

Although Zimbabwe has made strides in improving accountability through initiatives inspired by the Extractive Industries Transparency Initiative (EITI), the study found that crucial financial data remains inaccessible. "Gaps still exist in the transparency discourse, as some data is not publicly available, raising questions about the actual revenues generated by the industry," it stated.

According to data from the Mining Revenue Monitoring Index (MRMI), between 2017 and 2024, twelve major mining firms generated a combined US$10.02 billion in gross revenues from platinum, gold, diamond, and chrome. Platinum accounted for the largest share at US$7.73 billion, followed by gold at US$1.44 billion.

However, the sector's fiscal contribution remains low, with only 1% of gross revenues (US$1.42 billion) paid as taxes and a mere 2% of net profits allocated to Corporate Social Responsibility (CSR) programmes. "The CSR contribution remains relatively small compared to the substantial revenues generated by the sector," the report said, describing this as a "missed opportunity for development in mining-affected communities."

The report praised Zimplats and Caledonia Blanket Mine for their transparency and consistency in reporting CSR investments. It noted that Zimplats has invested around US$30 million in CSR initiatives, while Caledonia has supported healthcare and community development projects in Gwanda District.

Despite these positive examples, SIVIO said the mining sector remains "complex, characterised by competing interests and, at times, borderline criminal accounting methods." The think tank urged the government to strengthen oversight, enhance public access to mining data, and ensure greater accountability.

"Zimbabwe must invest in policies focused on improving revenue accountability and transparency," the report recommended, calling for Parliament and the Auditor General's Office to play a central role in monitoring mining revenues and CSR allocations.

SIVIO concluded that while mining remains a cornerstone of Zimbabwe's economy, stronger governance and citizen participation are essential to ensure the country's mineral wealth benefits all Zimbabweans.

"There is a need for communities to hold companies and the government accountable to ensure that the industry accelerates development," the institute emphasized.