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Hedge funds and other large speculators boosted net-long positions by 11% to 197,362 as of Nov. 12, the lowest in 14 weeks.
Zimbabwe’s Parliament is reportedly about to revoke mining fee regulations enacted by Mines and Mining Development Minister Obert Mpofu earlier this year, which could see the resource industry paying up to $1 billion more than in 2012 in exploration and exploitation levies.
According to the Mail & Guardian, the congress’ legal committee will present a report saying Mpofu’s new set of rules are unconstitutional and should be opposed.
The team members believe the rules not only set taxes overly high, but they also are not in line with the Constitution or the Mines and Minerals Act and will discourage investment in the country’s mining sector.
For instance, under the regulations, registration of ordinary platinum claims have been set at $2.5-million from $500, and application fees for diamonds have been pegged at $1-million from $300. The funds are non-refundable, even where an application is unsuccessful.
The Parliament’s move comes on the heels of a report from the African Development Bank (AfDB), published Monday, which said that despite having been reviewed downwards in March, Zimbabwe’s mining fees were still too high.
In its latest economic monthly review, the AfDB warned tariffs could be reduced further to help the sector attract more investors.
Application fees for registration as a prospector were increased 233%, in January last year from $ 1,500 in December 2011 to $ 5,000.
In March this year the government reduced some licensing costs again. For instance, application fees for registering as an approved prospector went down 20% from $ 5,000 to $4,000 for five years, reports New Zimbabwe.
“However the final amount is still above the $3,000 the Chamber of Mines of Zimbabwe recommends, thus acting as a barrier to companies entering the mining sector and reducing the profitability of those companies already in operation,” AfDB said.
The payments are non-refundable, even if an application is unsuccessful. And, for some commodities, the minister of mines actually increased its fees. Registration of ordinary platinum claims were set at $2.5 million from $500, and application fees for diamonds were increased to $1 million from $300, reports the Mail & Guardian.
The situation for the industry in the African country could eventually become unsustainable if a draft bill leaked to the media in April comes in effect any time soon. That rule would continue to force foreign-owned mining firms to cede 51% ownership to black Zimbabwean investors, but will then receive no compensation for their relinquished stakes.
Photo: Mpofu at Zimbabwe Diamond Conference 2012, via You Tube.
