London-listed Caledonia Mining says that revised proposals to changes in royalties in Zimbabwe should result in no change to the financial outlook for its portfolio of assets in the country, provided the gold price remains below $5 000/oz.
On December 1, Caledonia issued an announcement regarding proposed changes to the royalty and tax regimes, as they apply to gold miners, in Zimbabwe’s 2026 National Budget.
However, this week, the Minister announced certain changes to these proposals in the second reading of the 2026 National Budget in the Zimbabwe Parliament.
Specifically, the proposal to increase the royalty rate from 5% to 10% when the gold price exceeds $2 500 /oz will now only apply should the gold price exceed $5 000 /oz.
The proposed change to the tax treatment of capital expenditure, which would have spread the current 100% upfront deduction over the life of the project, affecting the timing but not the total amount of tax payable, has been withdrawn.
Additionally, the proposed change 15% withholding tax on interest payable on offshore loans has also been withdrawn.
While this provision would have had little effect on Caledonia’s existing operations, it would have had an adverse effect on the Bilboes gold project, which the company currently expects to fund with a large proportion of offshore debt.
The amendments, which have not yet been ratified by Parliament, are expected to be enacted before the end of the year.
CEO Mark Learmonth says that the company welcomes the revised provisions, believing they showcase the government’s support for the mining sector and the development of future mining projects in the country. – (Mining Weekly)
