Introduction
Chris Stevens 00:05
Hi everybody, my name is Chris Stevens, and I’m the head of the mining law department at Werksmans in South Africa. I’m also heading the mining practice group for LEX Africa, an alliance of law firms across Africa. LEX Africa was founded by Workman’s, and it represents key mining jurisdictions across the continent. Today, we’re joined by a special guest from Zimbabwe, Fidelis Manyuchi, who will discuss the recent trends in Zimbabwe’s mining law, focusing on resource nationalism and its impact on the mining sector.
Fidelis Manyuchi 00:35
Thank you, Chris. I’m Fidelis Manyuchi, a partner at Scanlen & Holderness, one of Zimbabwe’s oldest and leading corporate law firms. I co-head the Mining Law Department, and I’ve worked extensively in advising on mining law, regulatory compliance, and mineral rights.
Recent Developments in Zimbabwe’s Mining Laws
Chris Stevens 01:00
Great, thanks, Fidelis. Now, let’s dive right into it. Can you give us an update on the latest developments in Zimbabwe’s mining laws?
Fidelis Manyuchi 01:15
Sure, Chris. Recently, the Finance Act of 2024 introduced significant changes to the mining sector, which took effect on January 1, 2025. Key changes include adjustments to royalty rates for different minerals. For example, royalties on gold have increased from 1% to 2%, while royalties on dimensional stones were reduced from 2% to 0.5%. Additionally, there have been changes to the payment methods for royalties. For minerals like gold, diamonds, and platinum, 50% of the royalty must be paid in the form of the mineral itself, 10% in foreign currency, and 40% in local currency.
Chris Stevens 02:30
Interesting. Any other developments worth noting?
Fidelis Manyuchi 02:45
Yes, there’s also a new levy on key minerals like lithium and black granite. A 2% levy has been introduced on the gross value of these minerals. Furthermore, the government now requires mining companies to be registered taxpayers before acquiring or transferring mining titles. Non-compliance could render mining title transfers void. Finally, there’s a new special capital gains tax applied to the transfer of mining titles, which takes effect from January 2025.
Resource Nationalism in Zimbabwe’s Mining Sector
Chris Stevens 03:25
These changes are significant and will certainly impact the sector. Moving on to resource nationalism, Fidelis, how does Zimbabwe’s legal framework address this issue? Are there any key provisions designed to keep the benefits of mining within the country?
Fidelis Manyuchi 03:40
Zimbabwe has historically had the Indigenization and Economic Empowerment Act, which mandated majority local ownership of mining operations. However, this was amended in 2018 to allow foreign investors to own up to 100% of mining companies, with the exception of diamond and platinum mines, which are subject to stricter ownership requirements.
Moreover, there are indirect resource nationalism measures, such as bans on the export of unprocessed minerals. For instance, lithium and black granite must be beneficiated or processed within Zimbabwe before being exported. The law also imposes higher taxes on minerals that are exported without processing, pushing miners to invest in beneficiation locally.
Chris Stevens 04:15
That’s a clear push towards ensuring the country benefits more directly from its resources. Are there any recent measures to further this goal?
Fidelis Manyuchi 04:30
Yes, there’s the foreign currency retention policy, which requires exporters to convert a portion of their export earnings into local currency. This policy is managed by the Reserve Bank of Zimbabwe and is designed to ensure that some of the foreign currency generated by mining operations stays within the country.
Comparison with South Africa’s Mining Laws
Chris Stevens 04:50
It sounds like Zimbabwe is really trying to balance the interests of foreign investors with the national interest. In South Africa, for example, we’ve seen similar moves with restrictions on exports and obligations to beneficiate locally. Could you expand on how Zimbabwe’s approach compares?
Fidelis Manyuchi 05:10
Definitely. Zimbabwe’s approach has a similar aim—ensuring that local communities and the country at large benefit from the mining sector. While foreign investment is welcome, there are policies in place to ensure that mining companies contribute to the local economy through beneficiation and paying higher taxes on raw exports. This model helps to promote job creation and the development of local industries.
Looking Ahead: The Future of Zimbabwe’s Mining Sector
Chris Stevens 05:40
That’s an important point. It’s all about balancing the needs of both the investors and the country’s future growth. The mining Indaba is an important platform for discussing these issues, and we hope that solutions can be found for sustainable and mutually beneficial mining practices.
Fidelis Manyuchi 06:00
Absolutely. The Indaba will provide an excellent forum for further discussing these issues and finding lasting solutions.
Chris Stevens 06:10
Before we wrap up, Fidelis, any final thoughts on the direction of Zimbabwe’s mining sector?
Fidelis Manyuchi 06:25
My key focus is on creating a legal framework that fosters sustainable mining enterprises. We need to find a balance between local empowerment and attracting foreign investment. The emphasis on ESG (Environmental, Social, Governance), beneficiation, and resource nationalism needs to be carefully managed to ensure that Zimbabwe’s rich resources can be leveraged for long-term national growth.
Chris Stevens 06:50
That’s a very insightful point, Fidelis. Thank you so much for sharing your expertise today. This has been an invaluable conversation, and I’m sure listeners will benefit greatly from your input.
Fidelis Manyuchi 07:00
Thank you, Chris. It’s been a pleasure discussing these important issues with you.
Chris Stevens 07:05
And thank you to all our listeners. If you’d like to learn more about Zimbabwe’s mining laws and other African jurisdictions, be sure to check out our updated Mining Guide on the LEX Africa website. The guide covers mining law across several countries and is a great resource for anyone involved in the sector.
