By Nyasha Chingono
HARARE (Reuters) – Zimbabwean miners, among the country’s top export revenue earners, are likely to see profits drop almost 15% next year, with half expected to report a loss, according to a report released on Monday.
The Southern African country is known for abundant deposits of platinum group metals (PGMs), gold and lithium. But a confluence of global and local factors will eat into the mining industry’s revenue and profit in 2024, the Mining Prospects for 2024 report by the Zimbabwe Chamber of Mines said.
“Executives are generally pessimistic,” the report said, noting they had expressed concern over the investment outlook next year and called on the government to revise royalty payments and adjust foreign exchange retention rules.
The industry is one of the highest foreign currency earners, alongside tobacco and horticulture.
Last year Zimbabwe tripled the royalties platinum miners must pay the government to 7% and more than doubled those for lithium to 5%.
Miners said these hikes alone would drive costs up by 5%, and when the impact of higher taxes and tariffs are added the cost of production would spike by almost 10%, the report said.
Mining companies also want to retain up to 90% of their foreign currency earnings, up from 75% currently, according to the Chamber of Mines.
The local issues are compounded by global mining infrastructure bottlenecks and subdued commodity prices, mostly for PGMs and base metals.
Mineral revenues for the current year are likely to fall by approximately a fifth and by another tenth in 2024, the report said, with the Chamber of Mines only expecting gold miners to remain profitable.
(Reporting by Nyasha Chingono; Editing by Promit Mukherjee, Kirsten Donovan)