11 January 2012 – According to the Zimbabwean Herald, on November 16, 2011, the Zimbabwean government issued a US$28 million garnishee order to Impala Platinum’s bankers in Harare to pay $28.3-million in outstanding royalty payments allegedly owed by Impala’s subsidiary Zimplats. However, Impala is disputing this order, but has lost its bid to have the High Court urgently quash the garnishee order and also has failed to force the Zimbabwean Revenue Authority (ZIMRA) to return the US$7 2-million the bank had remitted from Zimplats’ accounts shortly after the order was placed.
ZIMRA’s position is that, when the Ministry of Finance took over the setting of royalties in 2009, rates were increased from 2,5% to 3,5%.”¨In 2010, Zimra argues, the rates were increased to five percent, but Zimplats reportedly continued remitting royalties using the old 2,5% rates.
Now, as of January this year, Zimbabwe’s mining royalties have been raised to 10%.
From its perspective, Zimplats argues that the calculation of the royalties was not correct. It contests that in terms of the Mines and Minerals Act, the mining agreement should be used under the circumstances and not a garnishee order on the strength of provisions from the Finance Act.
This comes at a time when Zimbabwe’s mines have the threat of indigenisation hanging over them. In response to this, Zimplats is currently busy establishing a community share ownership trust as an integral part of its indigenisation implementation plan.