HARARE – Gold prices have surged to unprecedented levels, presenting both opportunities and challenges for Zimbabwe’s mining sector.
Spot gold reached a record $4,967.03 per ounce on Friday, representing a 14% increase since the start of the year. While the rally boosts foreign currency earnings for miners, it has also sparked concerns over taxation and investment sustainability.
In his November 2025 budget, Finance Minister Mthuli Ncube proposed doubling the gold royalty rate to 10% for bullion sold above $2,501 an ounce. Industry players warned that such a move could erode profits and disrupt planned projects. Caledonia Mining, currently developing the Bilboes project, said the proposed royalty increase, alongside a potential tax on capital expenditure, would force it to reassess the project’s financial viability.
Following lobbying from Members of Parliament and miners, Ncube adjusted the policy. The 10% royalty would now only apply if gold prices exceed $5,000 per ounce, while small-scale miners continue to pay lower royalties of up to 2%.
At the time of the amendment, gold traded at around $4,000 per ounce, and the concession was widely welcomed. However, the recent sharp price increases have brought the higher royalty threshold into view sooner than expected, prompting renewed concern among producers.
The gold rally has been fueled by global political tensions, strong central bank buying, and a broader de-dollarisation trend, with investors increasingly turning to gold as a safe haven.
Zimbabwe is not alone in seeking to capture more value from rising gold prices. In Ghana, Africa’s largest gold producer, the government plans to raise royalties to 9%, increasing to 12% for prices above $4,500 per ounce. The West African nation also intends to phase out long-standing tax and royalty incentives that previously guaranteed stable terms for five to fifteen years in return for investment.
Zimbabwean miners delivered a record 46.7 tonnes of gold in 2025, 28% higher than in 2024, exceeding the industry target of 40 tonnes.
As gold continues to climb, miners face a delicate balance: maximising profits while navigating evolving fiscal policies. The coming months will test the sector’s resilience amid soaring prices and rising taxes.
Source: NewZwire
