Mining investment in Zimbabwe: latest developments

Posted in Mining Southern Africa Blog post

Re-engagement with international investors

Recent changes in Zimbabwe have seen a fundamental shift in the attitude to international investors, with Government taking positive steps to re-engage with the international community. Legislative reforms are in the pipeline which will have far reaching implications for investments in the mining sector. Principal amongst these is the proposed radical overhaul of the country’s indigenisation legislation, removing the previous requirement of a majority equity holding by indigenous Zimbabweans in all mining companies. This requirement is now confined to the diamond and platinum sectors. This, coupled with an expressed intention to re-engage with western governments and institutions, and to provide a safe environment for international investment, gives hope of a resurgence of investment in the mining sector.

Policy and proposed legislative reforms

Two important bills for the mining sector are currently before Parliament and it is likely that these will be passed into law in 2018. The first Bill which is the Minerals Exploration Marketing and Bill was published in December 2015. It seeks to deal with the two extreme ends of the mining cycle which are exploration and marketing. It, however, does not cater for the intermediary processes between exploration and marketing of mined ore or processed minerals, but is however seen as a positive commitment by the Government in investing in the mining sector by catering for exploratory works. The second Bill is the Mines and Minerals Bill, 2015 which is intended to amend the current Mines and Minerals Act [Chapter 21:05] and was published in August 2016. The Bill proposes 61 amendments to the Act.

Four critical issues are covered by the proposed amendments and these are:

  • The use it or lose it principle – in terms of which one will be required to not only pay their inspection fees but use the claim as well, failing which it will be forfeited to the State.
  • The Bill introduces nineteen strategic minerals over and above energy minerals currently considered in the present Act. Strategic Minerals as defined in the Bill as minerals deemed to of prime importance to the economic, social, industrial and the security development of the country.
  • The Bill introduces the system of manual and electronic recording and management of mining rights and title which replaces the old manual system which has no chronological record of the claims.
  • The new bill also seeks to regulate the relationship between the farmer and the miner with disputes between landowners and prospectors being referred to the Administrative Court. Miners will further be obliged to compensate farmers and to fence off their mining locations from the remaining farm or pastoral land.

What is available in terms of prospecting, grants and ownership of minerals

Any Zimbabwean national above the age of 18 can prospect and peg mining claims. In the case of international investors, this can be achieved by the registration of a company in Zimbabwe. It is possible for international investors to obtain prospecting rights and to peg and register claims for fairly nominal fees.

Can mined ore be exported?

Currently the export of minerals to global markets is regulated by the Minerals Marketing Corporation of Zimbabwe (MMCZ), with the exception of gold that is sold to Fidelity Printers which is the gold buying arm of the Reserve Bank of Zimbabwe. MMCZ exports on behalf of producers for a commission payment on sales. An exporter of minerals is subject to the oversight of the Minerals Marketing Corporation in respect of all contracts for the export of minerals from Zimbabwe. The Corporation levies a commission equivalent to 0,875 per cent of the gross invoice value of minerals exported.

Fees, taxes, duties and royalties

Mining companies pay taxes to the Zimbabwe Revenue Authority like any other corporate body, which includes PAYE and Income Tax. A further tax in the form of royalties is paid to the Revenue Authority in respect of minerals sold either locally or exported to international markets at varying rates. A miner is granted a tax holiday on the total cost of operation irrespective of the nature of operational cost in the year of its first operation. For international companies, withholding tax is payable on certain fees and royalties and on dividend remittances. 

Exchange Control

In terms of current exchange control policy and with reference to an approved investment in Zimbabwe, the investor is permitted to remit from Zimbabwe any dividends declared on shares held by that investor after deduction of any applicable withholding tax. There may in any given case be a requirement to establish the declaration of the dividend in question, or the availability of distributable profits, by the production of the local company’s accounts. That said, there are currently severe liquidity issues within the banking system which make remittance of US$ offshore extremely difficult at this point in time. The Government is committed to addressing this issue and is currently engaging with the international community to address this important issue.


We have worked on many transactions in Zimbabwe together with Gill, Godlonton & Gerrans, including some of the largest infrastructure projects in the country in the mining, energy, transport, infrastructure and commodities sectors.

The Inside Africa team would like to thank Peter Carnegie Lloyd, Partner, Gill, Godlonton & Gerrans, for his contribution to this blog post.


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