PGM producers seek deferment of pending Zimbabwe tax on non-beneficiated exports
THE ZIMBABWE Platinum Producers’ Association, which encompasses projects controlled by Anglo American Platinum (Amplats), Impala Platinum and Sibanye, wants Finance Minister Mthuli Ncube to defer a pending 5 percent tax on the shipment of platinum group metals (PGM) that are not beneficiated.
Zimbabwe’s Treasury has been granting fiscal and monetary concessions to Zimbabwean miners and this includes new requirements for them to pay royalties and other taxes in local currency.
Now, the platinum miners, faced with the pending raw platinum export levy, have written to the government to defer the tax as they ramp up investments to meet local platinum beneficiation demands from the government.
Alex Mhembere, chairperson of the Zimbabwe Platinum Producers’ Association, has written to Ncube asking the Treasury to “reconsider” the policy on value addition for the platinum sector.
Mhembere, who is also chief executive officer for Zimplats, also asked for Treasury to “further defer” the 5 percent tax “as this will allow producers more time to invest in the beneficiation facilities” while building sufficient stockpiles to sustain the facilities.
The levy was put on ice in 2020 for two years and expires this year. Now, the Zimbabwean platinum groups are scrambling to have it delayed further. However, government sources told Business Report yesterday that Mines Minister Winston Chitando was set to update the cabinet on the status of the beneficiation projects to enable the formulation of a government position on the issue.
“It’s likely the tax will be deferred, because of the investment pronouncements that have recently been made by Zimplats,” said one of the sources.
State-controlled media quoted Ncube as saying that the Treasury was “analysing” the request for the further deferment of the tax “and its implications”.
“We will get back to them once we have concluded our analysis and reached a decision,” Ncube said.
Zimplats has been investing in its metallurgical complex in Selous, where it intends to enhance PGM beneficiation.
In December, Implats approved a $1.8 billion (R27.8bn) capital budget for Zimplats, with $100 million earmarked for the “refurbishing (of) the mothballed base metal refiner to further
beneficiate converter matter”.
The new investment will boost Zimplats’ in-country processing capacity to 380 000 tons of concentrate per year.
For its part, Amplats has also been upping investment into value addition although, government insiders said, the expectation is for the company to fully beneficiate its output before shipment.
Amplat’s Unki mine in Zimbabwe launched a $60m smelter in 2019 and last year invested $40m to expand capacity of the smelter. This exercise is projected to improve throughput by as much as 30 percent.