HARARE (Reuters) - Zimbabwe will double the royalty rate it charges mining companies on the platinum group metals (PGMs) they produce to 5% from January 2023 in a bid to increase government revenues, Finance Minister Mthuli Ncube announced on Thursday.
The southern African country is the third largest producer of platinum, after South Africa and Russia, with major miners Anglo American Platinum AMSJ.J, Impala Platinum IMPJ.J and Sibanye Stillwater SSWJ.J operating there.
Presenting a mid-term budget in parliament on Thursday, Ncube said government income from the mining industry was low due to what he called "a generous royalty regime on some major minerals".
"A royalty rate of 5%, which is in line with other platinum-producing countries in Africa, is proposed effective 1 January 2023," Ncube said.
South Africa, the world's leading PGM producer, uses a formula to calculate the royalties it charges mining companies, based on earnings. The royalty rate is capped at 5% for refined minerals and at 7% for unrefined minerals.
Ncube also proposed a 5% royalty rate for lithium, a mineral that is drawing investor interest in Zimbabwe, which holds some of the largest hard-rock lithium deposits in the world, as demand for battery minerals grows.
Mineral exports from Zimbabwe, mainly gold and PGMs, reached $5 billion in 2021, accounting for 80% of the country's total export value.
Ncube expects total export earnings to increase 16% to $7.3 billion this year, buoyed by commodities.
(Reporting by Nelson Banya; Editing by Helen Reid and Jan Harvey)