Zimbabwe Shelves Gold Royalty Increase, Keeps 5% Rate Amid Miner Protests

Zimbabwe has abandoned a plan to double its gold royalty rate to 10%, bowing to pressure from mining firms and industry groups that warned the hike would erode profitability and deter investment. The revised 2026 budget bill, approved by the country’s lower house of parliament early Wednesday, keeps the existing 5% levy for bullion prices between $1,200 and $5,000 per ounce.

Finance Minister Mthuli Ncube had originally proposed doubling the royalty for gold sold above $2,501 per ounce in his November budget speech but told lawmakers during the late-night debate that the 10% rate would now only apply if global prices exceed $5,000 per ounce. He also confirmed that small-scale producers would continue paying lower royalties capped at 2%.

The policy U-turn follows intense lobbying by miners, including Caledonia Mining Plc, operator of the 80,000-ounce-a-year Blanket mine in southern Zimbabwe. The London-listed company had warned that higher royalties would threaten project economics and stall development of its planned $500 million Bilboes gold mine, expected to become the nation’s largest once operational.

Zimbabwe produced 42 metric tons of gold in the eleven months to November 2025, surpassing the previous annual record of 37 tons in 2024. The government has been courting new investment in large-scale extraction to re-establish the country among Africa’s leading gold producers and strengthen foreign exchange inflows.

Industry associations argued that the proposed tax increase risked undermining those gains by raising operating costs and weakening Zimbabwe’s competitiveness against regional peers. The revised thresholds, they said, strike a balance between government revenue ambitions and maintaining investment in the sector amid high international gold prices.

‍