New Levy on Lithium
Zimbabwe’s government, as part of its national budget for 2024, has introduced a new tax regime affecting the lithium mining sector. Finance Minister Mthuli Ncube announced a 1% levy on the gross proceeds from lithium mining. This tax is part of a broader initiative to bolster the country’s economy.
Funding Urban Infrastructure
The revenue generated from the lithium levy is earmarked for urban infrastructure development, including roads, water systems, sewers, and community health centers. This decision reflects the government’s commitment to reinvesting in critical public services and infrastructure.
Mandatory Beneficiation Plans
In a significant move, lithium miners in Zimbabwe are now required to submit beneficiation plans by March 31, 2024. These plans should detail the processing of lithium to enhance its value. Minister Ncube emphasized that no licenses would be granted to lithium companies without an approved plan.
Penalties for Non-Compliance
Companies that fail to comply with these new requirements or fail to undertake value-addition processing of lithium will be subject to an export tax. This measure is part of the government’s strategy to encourage local processing and value addition within the country.
Focus on Lithium Carbonate Production
The Finance Minister specifically noted that lithium value addition processes must lead to the production of lithium carbonate to be considered beneficial. This directive underscores the government’s focus on promoting specific methods of mineral processing.
The introduction of these taxes comes at a time when Zimbabwe’s economy is expected to experience moderate growth. The Finance Minister projects a 3.5% expansion in 2024, adjusting from a higher forecast in the previous year. This change is partly due to fluctuating global demand for commodities and potential agricultural challenges linked to El Niño weather conditions.