• Zimbabwe plans to introduce a 10% top-tier gold royalty from 2026, replacing the current 5% ceiling and targeting high-price conditions above $2,501/oz.

• Caledonia Mining and the Zimbabwe Miners Federation warn that the reform may reduce profitability, stall investment and increase gold smuggling.

• Gold prices have surged to around $4,100/oz in 2025, up 60% year-to-date, prompting the government to seek higher revenue capture.

Zimbabwe plans to impose a 10% royalty on gold producers from 2026 as part of its new budget proposal, aiming to maximise revenue amid a prolonged price rally. The government submitted the measure to Parliament for approval.

The move comes as authorities attempt to capitalise on a sector that remains one of the country’s main foreign-exchange earners.

The Zimbabwe Miners Federation (ZMF), which represents artisanal and small-scale miners, urged the government to drop the 10% rate. Local and international media reported the appeal on December 4, days after Caledonia Mining also voiced concerns.

Zimbabwe currently applies a progressive royalty system introduced in 2022. Producers pay 3% when the gold price trades below $1,200/oz and 5% when it exceeds that threshold. The reform keeps the 3% rate intact but adjusts the 5% bracket to apply between $1,201/oz and $2,500/oz. The new 10% royalty would apply at $2,501/oz and above.

Caledonia Mining says the higher rate would “reduce profitability and cash generation” at its Blanket gold mine. The company also plans to reassess the financial outlook for its $484 million Bilboes project, which it aims to commission by the end of 2028.

ZMF warns that the reform could deter investment and fuel gold smuggling among small-scale miners, who account for about 65% of national output. The federation reportedly told the Presidency and the Finance Ministry that “new investments in exploration and mine development will stagnate […]. We anticipate a sharp rise in smuggling as miners seek better returns in neighbouring countries with lower fiscal pressure,” according to Bloomberg.

The government’s push occurs as gold prices trade near record highs. After rising roughly 30% in 2024, gold now trades around $4,100/oz, up 60% since January, according to Trading Economics. This backdrop gives Zimbabwe fiscal room to capture more revenue through a 10% rate.

Analysts, including Morgan Stanley, expect the upward trend to continue through 2026, further supporting the government’s position.

Parliament continues to examine the 2026 budget, leaving uncertainty over whether lawmakers will approve the reform and how authorities will address industry concerns. Several African producers, including Mali and Burkina Faso, have already adjusted their royalty systems in recent years to benefit from high prices.

The debate in Zimbabwe now centres on whether the fiscal gains outweigh the potential impact on investment and formal production.

This article was initially published in French by Aurel Sèdjro Houenou

Adapted in English by Ange Jason Quenum