• Zimbabwe achieved an all-time high gold output of 46.7 tonnes in 2025 from 2024's 36.48 tonnes), with ASSM dominating at ~75%
• Gold now accounts for 40-50% of total exports, driving foreign exchange inflows with earnings projected to exceed $4.4 billion, already surpassed $4bn in 11 months
• Stark tax inequities burden large-scale miners compared to lighter burdens on ASSM, potentially encouraging circumvention and smuggling

Harare- Zimbabwe's gold production reached a historic milestone in 2025, with a total output of 46.7 tonnes. This figure exceeded the government's target of 40 tonnes and Fidelity's projection of 45 tonnes, while aligning closely with Equity Axis projections, which estimated between 44 and 47 tonnes, with a midpoint range of 45.5 to 46.5 tonnes, (https://equityaxis.net/post/18662/2025/12/hidden-potential-zimbabwe-s-100-tonne-gold-horizon-within-reach). 

This achievement reflects the sector's resilience and growth potential, positioning gold as a cornerstone of Zimbabwe's economy.

From around 15% in 2015, gold exports now accounts for between 40% to 50% of  of total exports, contributing one-third to total export earnings. The structure is dominated by Artisanal and Small Scale Miners now contributing 75% and Large Scale Miners 25%.

The surge in production is poised to boost export earnings significantly, projecting between 4.4 and 4.6 billion USD for the year. This marks the surpassing of the delayed realisation of the 4 billion USD gold industry target originally set for 2023, now achieved two years later. In the first 11 months of 2025, exports already surpassed 4 billion USD to 4.093 billion with an 11 month-average of 372 million.

December is projected to fetch no less than 400 million, playing in the range of 440 to 470 region, or slightly over 500 million USD based on record high gold prices. This could enable Zimbabwe has already  hit another 1 billion USD in exports for November at 1.046 billion,  the second time in history, highlighting gold's role in driving foreign exchange inflows. 

Of the 46.7 tonnes delivered to Fidelity, artisanal and small-scale miners (ASSM) contributed 35.1 tonnes, accounting for 75% of the total, while large-scale miners (LSM), led by major players like Freda Rebecca, Padenga Holdings, and Caledonia Mining Corporation, delivered the remaining 11.68 tonnes, or 25%.

This distribution reflects a dramatic shift since 2017, when ASSM began leading output until 2020, after which LSM briefly regained dominance. However, ASSM's share has since risen sharply from 60% to 75%, often at the expense of formal players due to systemic challenges. 

The disparity stems from multifaceted issues burdening LSM, such as high taxation including a 5% royalty rate potentially rising to 10% in the second quarter of 2026 alongside 25% corporate tax, corporate social responsibility (CSR) obligations, and various other levies. Compounding this is the 30% export surrender requirement, where miners forfeit 30% of earnings in the overvalued ZiG currency, leading to significant losses.

Unverified reports suggest that some LSM operators channel portions of their output through ASSM channels to receive full USD payments. This practice undermines the government's efforts to collect foreign exchange from LSM and highlights the need for reforms to prevent such circumvention. 

Examining the tax structure reveals stark inequities. For the first 10 months to October 2025, gold exports totalled 3.6 billion USD from 37 tonnes produced, with LSM contributing 9.47 tonnes (25.48%) and ASSM 27.7 tonnes (74.52%). This translates to ASSM earning about 2.68 billion USD and LSM 917.19 million USD. However, royalties alter the picture, ASSM pay just 1-2% (26.82 to 53.66 million USD), retaining 2.61 to 2.66 billion USD, without obligations like CSR, corporate tax, or employment creation.

In contrast, LSM pay 45.86 million USD in royalties (5%), retaining 871.33 million USD, from which 25% corporate tax deducts 217.83 million USD, leaving 653.50 million USD. Further deductions for employees, CSR, supply beneficiation, and additional taxes leave LSM with minimal net benefits despite their contributions to economic stability. 

Imposing a 10% royalty on LSM amid potential price surges beyond 5,000 USD per ounce would be counterproductive and insane, deterring investment. Instead, taxes should be remodelled for economic sense, such as reducing royalties to 6-7% overall, allowing LSM breathing room for capital expenditure (capex) reinvestment while encouraging ASSM to contribute more fairly.

Drawing from tax reform case studies, such as Colombia's 2010 reform that reduced the share of tax revenues allocated to mining municipalities, leading to a dramatic drop in local tax evasion and more efficient revenue collection without stifling production, Zimbabwe could implement similar adjustments to curb circumvention and smuggling. 

In Africa, however, many reforms highlight pitfalls: Sierra Leone's corporate income tax holidays from 2014-2016 resulted in 131 million USD in foregone revenues, equivalent to the country's annual budget deficit, failing to attract sustainable investment and reflecting the risks of overly generous incentives.

Similarly, Malawi's royalty reductions for uranium mining between 2009 and 2014 cost 43 million USD, which could have funded critical health services, demonstrating how poorly designed incentives exacerbate poverty rather than promote growth.

Lessons from these cases emphasize the need for time-bound, performance-based incentives tied to measurable outcomes like local employment or environmental compliance, with regular cost-benefit analyses to avoid revenue leaks and illicit financial flows. 

To avoid deterrence and side-marketing, increases on ASSM should be paired with incentives. The government could offer tax credits for ASSM adopting environmentally responsible practices, subsidies for modern equipment to improve efficiency and safety, training programs in sustainable mining techniques, low-interest loans for formalisation, or grants for community development projects.

These measures would promote compliance, reduce smuggling, and ensure that over 2 billion USD from ASSM isn't solely used for personal gain but contributes to national building. South Africa's mining incentives provide a relevant model: under its Income Tax Act, upfront capital allowances allow full deductions for prospecting expenditures like surveys and boreholes against mining income, though limited to successful operations and often favoring established firms.

Additionally, in Special Economic Zones, incentives include a reduced 15% corporate income tax rate, VAT exemptions on imports, and payroll rebates for projects in critical minerals or hydrogen, as seen with companies like Vedanta's zinc mine expansions. However, South Africa faces ongoing pressures for fairer rules, with criticisms of these incentives enabling tax evasion through havens like Mauritius, leading to calls for reforms that link taxation to climate justice and prevent revenue losses from profit shifting.

Zimbabwe could adapt similar cost-based incentives, such as investment allowances or customs duty exemptions on equipment, while incorporating safeguards against abuse as highlighted in African case studies like Zambia's unstable regime with frequent changes and long stabilisation clauses that locked in harmful concessions for decades.

No rational government would tax a sector that bolsters the economy (like LSM) more heavily than one with fewer obligations (ASSM). Smuggling persists partly due to policy gaps, but the government has resources such as enhanced policing, digital tracking systems, and border controls to narrow it.

For FY2025, gold earnings will exceed 4.4 billion USD, with a lower end of 4.326 billion USD based on a 363 million USD monthly average over 10 months based on historical data.

However, with prices averaging 4,000 USD per ounce in November and 4,300 USD in December, and earnings surpassing 400 million USD monthly since July, November and December could add 950 million to 1 billion USD, pushing totals to 4.5-4.6 billion USD.

 Looking to FY2026, the government must ease the business environment for miners, particularly LSM, by reducing corporate taxes, streamlining obligations, and removing VAT on sophisticated capital equipment to incentivize large-scale production and value addition. For ASSM, maintaining a 2% royalty without broader responsibilities lacks economic logic, as deliverers to Fidelity reap disproportionate rewards with unclear societal benefits, unlike LSM's investments in communities, wages, and taxes.

Adjusting royalties to be paid by Fidelity deliverers, combined with incentives like those mentioned such as equipment subsidies or training grants would balance benefits for government and miners alike. Incorporating insights from global reforms, such as the OECD's guidelines on minimizing risks from mining tax incentives and the push for a 15% global minimum tax that reduces the appeal of rate-cutting holidays, could help Zimbabwe avoid the failures seen in Tanzania's capital allowance uplifts, which deferred taxes indefinitely and capped local revenues.

Without these reforms, Zimbabwe will continue posting production records without improving citizens' lives, delaying the 100-tonne milestone. By fostering a fair, incentive-driven system informed by successful case studies like Colombia's evasion-reducing measures and cautious adaptations of South Africa's targeted allowances, while heeding warnings from African failures in unchecked holidays and reductions, the gold sector can drive sustainable growth, curb illicit practices, and maximize national prosperity.

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