Gold price extends loss as Fed cuts rates, signals less easing
New forecasts showed several officials penciled in fewer rate cuts for next year than estimated.
The Zimbabwe Chamber of Mines says the government’s hike of pre-exploration fees for the majority of minerals – by as much as 8,000% – will cripple the industry.
According to Reuters a raft of other charges include “registration of platinum and diamond claims going up to $2.5 million and $5 million” and “annual ground rentals ranging from $500 per hectare for chrome to $3,000 per hectare for diamonds.”
NewsDay reports the industry estimates the hikes in fees could cost the mining sector up to $1 billion:
“It’s estimated that 60 percent of every dollar earned in revenue goes to the government, making Zimbabwe one of the most expensive countries to mine.”
The country’s 2012 budget also calls for royalty increases of 7.5% for gold and 10% for platinum.
Businesslive quotes one analyst as saying the hikes will make it “impossible for small scale miners to regularise their activities” and make foreign investment in the county very difficult to attract:
As a point of reference the Ministry of Mines’ statistics released by the Permanent Secretary recently indicate that the mining sector needs US$6 billion in investments. This amount cannot be raised from domestic financial markets. Zimbabwe’s entire banking system has US$3 billion in deposits.
Over 50% of the value of Zimbabwean exports in 2011 came from the mining sector primarily from diamonds, platinum – Zimbabwe has the largest platinum reserves outside number one producer South Africa – gold and iron ore.
Foreign-owned mines operating in the country must cede 51% of their operations under the country’s so-called indigenization laws.
