Zimbabwe’s gold mining sector has welcomed a reprieve after Parliament withdrew three proposed measures, from the proposed 2026 National Budget, that would have significantly impacted earnings and investment.
Under the revised approach, the gold royalty rate will remain at 5% for now, with an increase to 10% only triggered if the price of gold exceeds US$5,000 per ounce, a level well above the current price of US$4,318 per ounce.
Analysts have forecast that gold could reach the US$5,000 mark by late 2026. Higher royalties had been expected to reduce profitability for large-scale producers and encourage smuggling among small-scale miners.
In addition, Parliament scrapped an upfront tax on mining capital expenditure, a provision that would have made new mining projects more costly to develop. Lawmakers also withdrew a proposed 15% withholding tax on interest payable on offshore loans, which would have increased the cost of servicing external debt for mining companies.
Among other local mining companies, Caledonia Mining expressed relief at the changes, stating that the revisions should maintain the sector’s attractiveness to investors and preserve the financial outlook for existing and future operations. Caledonia’s Chief Executive Officer (CEO) Mark Learmonth welcomed the revised provisions, describing them as a positive signal of the Government’s support for the mining industry and the development of future projects in Zimbabwe.
“The 2026 National Budget of Zimbabwe is yet to be enacted into law. However, we welcome the revised provisions announced this week, which we believe demonstrate the Government of Zimbabwe’s support for the mining sector and the development of future mining projects in the country,” Learmonth said.
Industry analysts also said that the concessions could help promote stability in Zimbabwe’s gold mining environment and support ongoing and planned projects, including large-scale investments that rely on offshore financing.
The revised budget measures currently await final approval in Parliament but are expected to be enacted before the end of the year.
