• Zimbabwe raises gold price threshold for 10% royalty to $5,000

• Revision follows industry backlash over profitability and investment risks

• Government may still gain if gold prices exceed forecasts

Zimbabwe revised its gold royalty regime in a 2026 budget update released on Wednesday, Dec. 17. A 10% tax rate, initially set to apply when gold prices reached $2,501 per ounce, will now only apply above a raised threshold of more than $5,000. The adjustment could still prove favorable for Harare, given analyst forecasts for gold prices next year.

The revision follows opposition from industry stakeholders. In late November, the Zimbabwean government announced a new gold royalty system aimed at capturing more revenue from rising gold prices, which are currently trading around $4,330 per ounce. The reform was based on a progressive scale, with a 3% rate when gold prices are below $1,200 per ounce, a 5% rate between $1,201 and $2,500, and a 10% rate above that level.

The move prompted concerns among gold producers, who had previously been subject to a flat 5% royalty for gold prices above $1,200 per ounce. Caledonia Mining warned that the change could affect the profitability of its Blanket mine, while the Zimbabwe Miners Federation (ZMF) said the introduction of a 10% rate could deter investment.

Against this backdrop, the government revised the measure. A 5% rate will now apply to gold prices between $1,201 and $5,000 per ounce, with the 10% rate reserved for prices above that threshold. While the update addresses some industry concerns, Zimbabwe could still benefit from the higher rate if prices continue to rise.

Analysts at U.S. bank JPMorgan forecast that the gold bull market could extend into 2026, with prices averaging $5,055 per ounce by the end of the fiscal year. Similar projections have been made by Bank of America and consultancy Metals Focus, both of which expect gold prices to surpass the $5,000 per ounce mark next year.

“While this rally in gold has not, and will not, be linear, we believe the trends driving this rebasing higher in gold prices are not exhausted,” said Natasha Kaneva, head of commodities strategy at JPMorgan. “The long-term trend of official reserve and investor diversification into gold has further to run. We expect gold demand to push prices toward $5,000/oz by year-end 2026.”

If these forecasts materialize, Zimbabwe’s reform could prove effective, allowing the country to capture up to 10% of the market value of gold sales by industrial producers operating domestically. It remains to be seen how the market responds in the early months of 2026, particularly how mining companies adapt to the revised royalty structure.

Rising gold prices above $5,000 per ounce would not only benefit Zimbabwe. Other African producers could also see higher revenues, including Burkina Faso, which has introduced an additional 1% levy for every $500 per ounce increase in gold prices since last April.

Aurel Sèdjro Houenou