According to a survey published on Monday, Zimbabwean miners, who are among the leading producers of export earnings for the nation, are forecast to face an almost 15% decline in profits next year, with half of them predicted to declare a loss.
The nation in Southern Africa is well-known for having large reserves of gold, lithium, and platinum group metals (PGMs). In 2024, however, a combination of domestic and international variables would reduce the mining sector’s earnings, according to the Zimbabwe Chamber of Mines’ Mining Prospects for 2024.
According to the study, “executives are generally pessimistic,” noting that they had voiced concerns about the investment outlook for the upcoming year and urged the government to modify the regulations governing foreign exchange retention and royalty payments.
The sector earns more foreign exchange than tobacco and horticulture combined.
Zimbabwe increased the royalties that platinum miners were required to pay the government last year by thrice to 7% and more than twice to 5% for lithium.
According to miners, these increases by themselves would raise expenses by 5%, and the research stated that the cost of production would increase by over 10% when increased taxes and tariffs are taken into account.
According to the Chamber of Mines, mining companies also wish to keep up to 90% of their foreign currency revenues, an increase from the existing 75%.
Commodity prices have been muted, mainly for PGMs and primary metals, and global mining infrastructure constraints have made the local problems worse.
According to the analysis, mineral income is only expected to stay lucrative for gold miners; they are expected to shrink by around a fifth this year and by another tenth in 2024.