Zimbabwe has abandoned plans to immediately double its gold royalty rate to 10%, following protests from miners and industry stakeholders, lawmakers confirmed on Wednesday. The move eases concerns over investment in the country’s gold sector, which has become a critical contributor to foreign exchange earnings.
Under a revised 2026 budget bill approved by the lower house of parliament after a protracted debate, the existing 5% royalty rate will remain in place for gold priced between $1,200 and $5,000 per ounce. Finance Minister Mthuli Ncube clarified that a 10% rate will only apply if gold prices surpass $5,000 per ounce. Small-scale miners will continue to benefit from reduced royalties of up to 2%.
The decision marks a significant rollback from Ncube’s earlier proposal, which had sought to impose the higher 10% rate on gold sold above $2,501 per ounce. Industry groups and major producers, including Caledonia Mining, had warned that the increase would erode profitability at operations such as the Blanket mine and could jeopardise development of its planned $500 million Bilboes project.
Zimbabwe’s gold sector has been a key driver of economic resilience, producing a record 42 tonnes in the 11 months to November 2025. Gold exports are a vital source of foreign currency in a country grappling with persistent liquidity shortages, high inflation, and currency volatility. Analysts say that maintaining a competitive royalty regime is essential to sustaining investor confidence, encouraging new exploration, and supporting long-term growth in the mining sector.
The reversal also underscores the balancing act facing the Zimbabwean government between raising fiscal revenues and maintaining an attractive investment climate. Higher royalties could have increased government income in the short term, but analysts warned they risked discouraging production, slowing expansion projects, and reducing overall export earnings. By moderating the royalty structure, the government signals a willingness to support private-sector growth while still capturing fiscal benefits from high gold prices.
Small-scale miners, who employ tens of thousands of Zimbabweans and play a significant role in rural economies, also stand to benefit from the decision. Maintaining lower royalties for these operators preserves livelihoods and encourages formalisation of artisanal mining activities, which have historically been informal and vulnerable to regulatory shifts.
Looking ahead, the sector’s performance will remain closely tied to global gold prices, operational efficiency, and government policy. Industry experts emphasise that a stable and predictable fiscal regime is critical for Zimbabwe to attract both domestic and foreign investment, expand production, and fully leverage its rich mineral endowment.
For the broader economy, sustained gold production provides a lifeline to the country’s foreign reserves, helping to stabilise the Zimbabwean dollar, support imports, and underpin fiscal planning. The government’s revised approach, by mitigating immediate investor concerns, could strengthen the sector’s contribution to national growth while maintaining room for future fiscal reforms.
