Investing in Zimbabwe

In Zimbabwe the mining industry earns 40% of the country’s foreign exchange earnings, contributes approximately 4% towards Gross Domestic Product and employs in excess of 55 000 people thereby creating a livelihood for a quarter of a million Zimbabweans.

Most of the output comes from a few large mining groups comprising internationally known multi-nationals complemented by a growing number of locally owned enterprises being developed by indigenous entrepreneurs.  In the formal mining sector there are approximately one thousand properties, mainly gold, worked by companies, syndicates and individuals classified as operating mines.

The main mineral and mineral related exports produced by the Zimbabwe mining industry are gold, ferrochrome alloys, asbestos, nickel and platinum.  Other exports include dimension stone (black granite), graphite, lithium minerals and emeralds.

AN AREA FOR INVESTMENT
The reason for Zimbabwe’s success in attracting the attention of mining investors is that access to prospecting and mining ground may be readily obtained, either by pegging or registration of claims, by purchase or lease of existing properties or by entering into joint ventures with going concerns. 

Some of the more significant investor incentives within the mining industry are:

• Remittability of 100% of after tax profit
• Secure mining title
• Corporate Tax of 25%
• The immediate write-off of all capital expenditure
• Operating losses can be carried forward indefinitely
• An active stock market and a favourable geological environment.

An investor wishing to invest in the mining sector should, in the first instance, consult with the Chamber of Mines or the office of the Mining Commissioner.

SPECIAL MINING LEASES
A Special Mining Lease entitles the holder to specific incentives negotiated individually with the Ministry of Mines. The holder or tributer of a special mining lease is entitled to a refund of VAT and import tax on any building or structure constructed from eligible goods in terms of a contract with government and other goods of a capital nature.

TERMS AND CONDITIONS
An investor wishing to apply for a special mining lease must invest in excess of US$100 million in foreign currency in a mine whose output will be mainly for export, be the holder of one or more contiguous registered Mining locations and must be either a citizen of Zimbabwe, a body corporate or two or more persons, provided they are citizens of Zimbabwe.  Their  obligations under the lease shall be joint and several.

Only one mine can be established and developed by the holder of a special mining lease in a specific area. A special mining lease will be issued for a maximum period of twenty-five years after which it can be renewed for a further ten years.

APPLICATION PROCEDURES
An application for a special mining lease must be made to the Mining Commissioner for the mining district concerned.  The application must be accompanied by:

• Particulars of the minerals to be mined
• A sketch plan identifying the position of the area applied for specifying any registered mining locations situated in the area
• A list of all registered mining locations for which the applicant is the sole or joint holder situated within the area applied for with certificates of registration of such locations
• A work plan for the development and operation of the proposed mining including a feasibility study, a financing plan, a marketing plan and an economic evaluation
• A comprehensive report on the mineral deposits to be mined which should include an environmental study, details of infrastructure requirements and proposed developments.

On receipt of an application the mining commissioner will reserve the area of the proposed mining lease against prospecting and pegging and will refer the application to the Mining Affairs Board for preliminary assessment.