Caledonia Mining Corporation has praised the reversed mining royalty provisions in the 2026 National Budget, viewing them as a sign of the Government’s commitment to supporting the mining sector and fostering future projects in Zimbabwe.
The mining group released a statement on 1 December, expressing concerns about changes to the royalty and tax regimes for gold miners following the budget presentation.
The proposed measures related, among other issues, to royalties, the tax deductibility of capital expenditure and the introduction of withholding tax on offshore loans.
However, Caledonia noted that on Wednesday, Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube announced amendments to the proposals during the second reading of the 2026 National Budget in Parliament.
“Caledonia notes that, on December 17, 2025, the Zimbabwe Minister of Finance announced certain changes to these proposals in the second reading of the 2026 National Budget to the Zimbabwe parliament, specifically the proposal to increase the royalty rate from 5% to 10% when the gold price exceeds US$2,500 per ounce will now only apply should the gold price exceed $5,000 per ounce,” the company said.
It further noted that the proposed change to the tax treatment of capital expenditure had been withdrawn.
“The proposed change to the tax treatment of capital expenditure whereby the current 100% upfront deduction would instead be spread over the life of the project, affecting the timing, but not the total amount of tax payable, has been withdrawn.
“The proposed change to levy withholding tax at 15% on interest payable on offshore loans has been withdrawn.
“Whilst this provision would have had little effect on Caledonia’s existing operations, it would have had an adverse effect on the Bilboes Gold Project, which Caledonia currently expects to fund with a large proportion of offshore debt.”
Caledonia said the revised proposals were positive for its operations and investment plans.
“The revised proposals, which have not yet been ratified by parliament, but are expected to be enacted before the end of the year, should result in no change in the financial outlook for Caledonia’s portfolio of assets in Zimbabwe provided the gold price remains below $5,000 per ounce.”
Commenting on the developments, Caledonia chief executive officer Mr Mark Learmonth said the revised measures sent a positive signal to investors.
“The 2026 National Budget of Zimbabwe is yet to be enacted into law. However, we welcome the revised provisions announced this week which we believe demonstrate the Government of Zimbabwe’s support for the mining sector and the development of future mining projects in the country,” he said.
Parliament has since passed the 2026 National Budget after Treasury made several concessions on key fiscal measures, paving the way for the implementation of Government’s spending and revenue plans for the coming year.
The Budget was approved after both the Finance Amendment Bill and the Appropriation Bill were read for the third time in the National Assembly and the Senate, which sat into the early hours of Wednesday to conclude deliberations.
The two Bills now await assent by President Mnangagwa.
Professor Ncube presented the Budget last month, outlining a mix of revenue-enhancing and expenditure measures aimed at stabilising the economy and supporting growth.
He also reversed his proposal to double the gold royalty rate to 10 percent after legislators warned that the increase would negatively affect miners and the broader industry.
As a result, the royalty rate will remain at five percent for gold prices ranging between US$1 200 and US$5 000. – Herald
