JOHANNESBURG (miningweekly.com) – A platinum export levy announced by the Zimbabwe government in 2013 remains mired in uncertainty, after the planned deferral of the tax to 2017, was not provided for in the country’s 2015 Finance Bill, gazetted on January 9.
Platinum majors Impala Platinum (Implats) and Aquarius Platinum – both of which have active platinum operations in the country – said in respective statements on Friday that the export tax, at a rate of 15% of revenue, was initially set to take effect from January 1, 2015.
The tax was aimed at encouraging platinum mining companies to invest in smelting and refining capacity in Zimbabwe.
However, Finance Minister Patrick Chinamasa announced in the 2015 National Budget statement in December that the government had deferred the export tax on unbeneficiated platinum to January 1, 2017.
Perplexingly, the recently promulgated 2015 Finance Bill did not provide for the deferral of the tax.
“It is not clear whether the export levy will be formally enforced and [Implats], in consultation with the Chamber of Mines in Zimbabwe, is presently seeking clarity from the authorities,” the platinum miner said.
Aquarius was also engaging with government to resolve the matter.
Advisory firm Liberum, meanwhile, emphasised that the tax would have a “disastrous” effect on the profitability of platinum mines in Zimbabwe, affecting those of Aquarius, Implats and Anglo American.
For Aquarius Platinum's Mimosa mine, the implied impact in its second-quarter results would be to reduce cash margins from $182/oz to $17/oz, it asserted.
Further, the export tax would not necessarily be tax-deductible against corporate tax.
“The tax comes at a time when platinum-group metal prices are [very low]. [Moreover,] if processing operations are built, it would also raise the risk of the assets being nationalised, as a final product is far easier to sell overseas,” the firm cautioned.
Meanwhile, Implats said it was committed to securing a conducive regulatory and fiscal framework for the mining industry in Zimbabwe, while Aquarius said it was hopeful that the matter would be resolved and the company remained committed to “building good working relations with the government of Zimbabwe,”.
Implats added that its Zimplats operation did not export unbeneficiated platinum concentrate and, as a consequence, would not be impacted by this levy.
“Implats is not in a position to provide further details due to the sensitive and confidential nature of these engagements. Further developments will be communicated in due course,” it stated.