Finance Minister Mthuli Ncube has abandoned plans to double the gold royalty rate to 10 per cent, according to the new 2026 budget bill released on Wednesday, following protests from miners and industry groups.
Under the revised bill, a 5 per cent royalty will continue to apply for gold priced between $1,200 and $5,000 per ounce.
The bill was approved by the National Assembly in the early hours of Wednesday after a lengthy debate. Said Ncube:
“I’ve been persuaded by contributions from MPs and the public. We also received representations from the mining companies and a federation comprising the small-scale miners, that we need to amend these royalty proposals for gold.
“We should accept, though, that we have a situation of arbitrage. We think that as much as 50 per cent of the gold being delivered by small-scale producers is actually from large-scale producers because they realise that there is a lower royalty, and they make arrangements to deliver through the small-scale mines.
“Of course, we are happy that gold is being delivered, but this arbitrage is a source of discomfort.”
In his budget speech last month, Ncube had proposed doubling the gold royalty rate to 10 per cent for gold sold above $2,501 an ounce.
However, during the late-night budget debate, he told lawmakers that the 10 per cent rate would now only apply if the price of gold exceeded $5,000 an ounce.
He also announced that small-scale miners would continue to pay lower royalty rates of up to 2 per cent.
More: Reuters
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