Mthuli launches new gold royalty to cash in on market rally

STAFF WRITER

Zimbabwe has rolled out a new gold royalty regime as authorities move to capture more value from the metal’s record-breaking surge on global markets, positioning bullion at the heart of efforts to stabilise revenues and strengthen foreign currency buffers.

The royalty adjustment arrives at a time when gold is trading at historic highs, prompting resource-driven economies to reconfigure fiscal frameworks in response to the windfall. Harare says the redesigned royalty structure — now calibrated to fluctuate with international gold prices — is meant to “ensure the country fully benefits from exceptional market conditions”.

A senior government official involved in the policy formulation said the changes underline the state’s resolve to fortify its fiscal position. “Gold is our most strategic commodity at the moment, and we cannot afford to leave value on the table when prices are at historic highs,” the official said.

Under the revised approach, royalty rates will rise when global prices surpass a prescribed threshold and fall when markets soften. Treasury economists argue that this mechanism will help protect government revenue during downturns while amplifying earnings during commodity rallies.

But mining companies have warned that the sudden shift risks unsettling an already fragile sector battling power shortages, escalating production costs, and restricted access to capital. A mining executive, who asked not to be named, said the industry had hoped for broader consultation before the rollout. “We understand the government’s need to raise revenue, but stability is critical for planning and investment,” the executive said.

Gold remains Zimbabwe’s most valuable export, contributing a significant share to overall mineral earnings. Output has climbed in recent years due to expansion by large producers and increasing deliveries from small-scale miners.

Economists caution, however, that while the revised royalty regime may boost government income in the short term, its long-term success hinges on policy consistency and investor confidence. Sustained growth in the sector, they note, will require reliable energy supplies, infrastructure rehabilitation, and incentives that support production.