• Zimbabwe's 2025 gold exports in the first 10 months reached US$3.636 billion and on track for full-year earnings of at least $4.2 billion potentially up to $4.6 billion
• The government revised the proposed 2026 royalty reform after pushback, maintaining 1-2% for ASSM and 5% for LSM under normal conditions, with 10% only applying above $5,000/oz
• However, its not a full backtrack, as major bank forecasts suggest the threshold will likely be breached multiple times in 2026, activating higher rates

Harare- Zimbabwe's gold sector has continued its remarkable surge in 2025, building on the record 36.48 tonnes produced in 2024 (following a dip to 30.1 tonnes in 2023).

The country surpassed its annual production target of 40 tonnes early, with cumulative output reaching approximately 41.47 tonnes by the end of the first 10 months (October). Artisanal and small-scale mining (ASSM) has remained the dominant force, contributing around 75% of output, while large-scale mining (LSM) accounts for the remainder according to the data from Fidelity Gold Printers and Refiners.

This strong performance has been driven by sustained high global gold prices, which have held above $4,000 per ounce and reached new peaks (currently trading around $4,480–4,500/oz as of late December 2025), elevating gold to over 50% of total exports from 15% in 2015 and nearly 60% of foreign currency inflows.

As a result, in the 2026 National Budget presented on November 27, 2025, Finance Minister Mthuli Ncube initially proposed a harmonized tiered royalty structure applied uniformly as 3% for prices up to $1,200/oz, 5% between $1,201-$2,500/oz, and 10% above $2,501/oz. This aimed to address the inverted system where ASSM's dominance contributed little to the fiscus, despite the mining sector's high revenues and historically low capture rates (around 14% in prior years).

However, following intense parliamentary debates and industry pushback, the government revised the thresholds: maintaining 1-2% for ASSM and 5% for LSM under normal conditions, with the 10% rate only triggering when prices exceed $5,000/oz.

While some have interpreted this adjustment as a backtrack on the planned 10% royalty effective in 2026, it is far from a full retreat. The core intent of capturing windfall gains during extreme price rallies remains firmly in place.

Leading analyst forecasts for 2026 are robust.  J.P. Morgan projects an average of $5,055/oz by Q4 2026, rising toward $5,400/oz by the end, Goldman Sachs around $4,900/oz by December 2026 in its base case (with a 14% rise expected) while Bank of America up to $5,000/oz with an average of $4,400 (citing strong investment demand, fiscal deficits, and geopolitical factors).

HSBC and Société Générale also at $5,000/oz; Morgan Stanley $4,500/oz by mid-2026 or up to $4,800/oz; Citi Research around $3,400 average but with short-term targets adjusted lower to $3,250-$3,800, and broader consensus clustering around a $4,500-4,700 average, with meaningful upside risks from central bank demand, geopolitics, resilient investor demand, and other drivers.

These projections indicate that the $5,000/oz threshold is likely to be breached multiple times, if not sustained for periods, throughout the year. As a result, the 10% rate is expected to activate on a significant portion of output, meaning the government's policy shift is effectively a deferred but market-tied mechanism that will align with the original reform objective of reclaiming substantial revenue from ASSM dominance without immediate confrontation.

Geopolitical tensions are poised to propel gold prices beyond $5,000 per ounce in 2026, as forecasted by analysts like those at Tass Press, driven by persistent conflicts and economic disruptions that enhance gold's safe-haven appeal.

The Russia-Ukraine war shows no signs of resolution, with Russian forces continuing offensive campaigns and striking critical infrastructure in regions like Chernihiv Oblast as of December 2025, rejecting U.S.-proposed ceasefires and new peace plans that include demilitarized zones in Donbas, while Russia insists on retaining occupied territories including Crimea amounting to over 18% of Ukraine's land, and Ukraine remains unwilling to concede.

Western sanctions against Russia have proven ineffective, as China has ramped up energy imports, with Russian pipeline gas exports to China surging 25% to 38.7 billion cubic meters in 2025 and LNG deliveries doubling to 1.6 million metric tons in November alone, filling Moscow's coffers and enabling prolonged military efforts despite Russia's oil export revenues dipping to $11 billion in November due to weaker prices.

Compounding this, President Trump's escalating confrontations, including a total naval blockade on Venezuelan oil tankers since mid-December 2025, airspace closures, and threats of military force to reclaim expropriated U.S. oil assets amid regime change rhetoric against Maduro, alongside renewed trade wars with China and additional duties on semiconductors delayed to June 2027, are stoking inflation fears, supply chain disruptions, and investor flight to gold, which has already hit records above $4,500 per ounce in late December 2025.

Thus, the 10% royalty was just deferred to a later date of the same year. However, even with this structure, a 10% rate at extreme highs risks positioning Zimbabwe as having one of Africa's steepest royalties, potentially deterring investment in a high-cost environment with elevated all-in sustaining costs. Regional peers offer benchmarks.

Côte d'Ivoire at 8%, Ghana and Tanzania up to 6%, and others blending royalties with profit-sharing or incentives to balance revenue capture and sector growth.

For LSM, the potential hike compounds existing burdens, threatening profitability as highlighted by warnings from operators like Caledonia Mining regarding projects such as Blanket Mine and Bilboes.

A more aligned 6-7% range would better support formal employment, skills transfer, and investment while securing fair windfall value. For ASSM, which drives most production but delivers limited state benefits, a nuanced, gradual approach is essential, starting at 3-4% to 6-7% with compliance incentives like rebates, bonuses for delivery targets, equipment subsidies, or streamlined permitting, as seen in Ghana and Tanzania to encourage formalisation without sparking resistance or diversion.

FY 2025 projections

Meanwhile, in the first 10 months of 2025, gold export earnings reached US$3.636 billion, a significant increase from 1,87 billion last year during the same period. The current trajectory now points to full-year production of 44-46 tonnes and export earnings of at least $4.2 billion, with potential upside to $4.5-4.7 billion depending on prices and momentum.

The monthly average earnings in the first 10 months stood at $363.2 million. Projecting this forward for November and December, the lower limit (assuming a conservative slowdown) comes to about $350 million per month, adding $700 million and bringing full-year earnings to approximately $4.336 billion.

The upper limit (factoring in continued strong months) ranges from $400-500 million per month, adding $800-1,000 million and pushing full-year earnings to $4.436-4.636 billion. The average estimate (mild uptick based on ongoing momentum) is around $380 million per month, adding $760 million and resulting in full-year earnings of approximately $4.396 billion.

These projections align with November's high average gold prices (around $4,088/oz amid the rally) and December forecasts (in the $4,400-4,500/oz range, supported by bullish analyst sentiment and sustained demand).

This production and earnings boom has highlighted deep fiscal inequities in the royalty regime. ASSM operators pay a low 1-2% royalty (averaging around 1.5%), while LSM faces 5% plus additional burdens including 24.72% corporate tax, PAYE, environmental levies, and more—often resulting in an effective tax load exceeding 40%.

From the approximately 41.8 tonnes produced in the first 10 months (valued at about $3.636 billion), a moderate uniform royalty of 5-6% could have generated $182-218 million for the government.

In reality, the dominant ASSM segment contributed far less (roughly $27-55 million at 1-2%), while LSM's 5% rate yielded approximately $45 million—leaving overall collections minimal relative to volumes and underscoring opportunities lost to potential smuggling and low compliance.

Ultimately, Zimbabwe's royalty adjustment represents a calculated evolution rather than capitulation, with higher rates poised to activate in 2026 amid projected price surges. Yet true success requires equilibrium: capping at 6-7% for LSM to preserve investment, and incremental, incentive-based hikes for ASSM to build buy-in.

Recalibrated holistically, this policy could convert the gold boom into sustainable national gains, funding infrastructure, services, and broader development, rather than leaving potential untapped in one of Africa's most resource-rich stories.

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