• Zimbabwe's gold sector achieved a record 46.7 tonnes in 2025, with export earnings of $4.6 billion, driven by a 44% increase in gold prices
• The government's fiscal framework, including a 10% royalty rate above $5,000/oz, may impact investment decisions for large-scale miners, who face a high tax burden
• To sustain growth, Zimbabwe should consider reforms, such as publishing royalty thresholds, introducing capital expenditure allowances, and exempting capital equipment from VAT

Harare- Zimbabwe's gold sector delivered its best year on record in 2025 with total output of 46.7 tonnes, exceeding the government's 40-tonne target by nearly 17% and surpassing Fidelity's own projection of 45 tonnes. Zimstat confirmed total gold export earnings of approximately $4.6 billion for the full year, finally crossing the $4 billion milestone that the government had originally set for 2023, arriving two years behind schedule but emphatically.

Gold now accounts for above 40% of Zimbabwe's total export base and delivers more than 30% of all national export earnings, and that is not a sector story, but an economy story.

The 2025 production record was powered by a historic price rally. Gold set 53 new all-time highs during the year, with the annual average price reaching approximately $3,431 per troy ounce, a 44% increase from the 2024 average of roughly $2,386, and the strongest annual price growth since 1980. Zimbabwe's $4.6 billion in earnings reflects both volume achievement and a powerful price tailwind.

That combination is analytically important because the fiscal framework performed under an exceptionally favourable price environment in 2025. The real test of its sustainability is what it does to investment economics in 2026, because the price environment has now crossed a threshold that changes the fiscal arithmetic dramatically.

Below $5,000 per ounce, the royalty rate for large-scale miners is 5% of gross revenue. Above $5,000 per ounce, the rate escalates to 10%. In 2025, with gold averaging $3,431 per ounce, the 5% rate applied throughout the year, generating approximately $57.5 million in royalty payments from the large-scale sector's $1.15 billion in earnings.

As of early 2026 to present March, however, that calculation has changed. Gold is currently trading above $5,000 per ounce, and the threshold has been breached activating the 10% royalty rate.

It is critical to understand what a gross revenue royalty means in practice, because it is structurally different from every other tax in the stack. It is levied on the top line, before wages, before energy costs, before reagents, before maintenance, before the capital repayment on the hundreds of millions invested in mine infrastructure, and before any consideration of whether the operation is profitable.

A mine running at a loss still pays its royalty. In a year when operating costs are rising, power supply disruptions, labour inflation, reagent cost increases, all flagged by Caledonia Mining in its 2025 results, a doubling of the gross revenue royalty at exactly the moment costs are climbing is a compounding of pressures, not a coincidence.

After the royalty is paid, large-scale miners face a 24.75% corporate income tax, also levied on gross revenues. This is the second sequential deduction from the top line. On $1.15 billion in LSM gross revenue for 2025, the 24.75% corporate income tax generates approximately $285 million in tax liability.

Together, the 5% royalty and 24.75% corporate income tax removed approximately $342 million from the large-scale sector in 2025,  nearly 30% of gross revenue, before any other obligation is considered.

The export surrender requirement adds a third layer that appears in no published tax schedule but functions as a material fiscal burden. Large-scale miners are required to surrender 30% of their foreign currency earnings into Zimbabwe Gold at the official interbank rate. With the ZiG trading at approximately a 30% discount to the parallel market rate, that conversion imposes an implicit economic cost of approximately 9 cents on every dollar surrendered.

 On $1.15 billion in 2025 LSM gross revenue, with 30% surrendered, approximately $345 million surrendered to ZiG, the implicit loss is approximately $104 million. This cost is real, it is absorbed silently, and it compounds the formal tax burden without appearing anywhere in the fiscal accounts.

Beyond royalties, corporate tax, and ZiG surrender, large-scale miners carry obligations with no equivalent in the artisanal sector. Mandatory corporate social responsibility contributions are material and non-negotiable. Employment obligations, including AIDS levy deductions at 3% of all PAYE, apply to formal workforces numbering in the hundreds or thousands. Environmental compliance requirements, including environmental impact assessments and post-mining rehabilitation bonds, add further cost and management complexity.

And VAT at 15.5% applies to the procurement of every piece of capital equipment, machinery, processing infrastructure, development assets, taxing investment in productive capacity at precisely the moment the sector needs to attract it most.

The contrast with the artisanal and small-scale sector makes the asymmetry concrete. ASSM miners delivered 35.025 tonnes worth approximately $3.45 billion in FY2025. Following the February 2026 Monetary Policy Statement, small-scale gold miners now receive 90% of their payment in US dollars and 10% in ZiG, replacing the previous 100% USD arrangement.

This is a meaningful step toward fiscal symmetry, the first time artisanal miners have been brought partially into the ZiG framework, and it carries an implicit cost comparable to the LSM surrender loss. On $3.45 billion in ASSM earnings, the 10% ZiG component amounts to approximately $345 million converted at the official rate; at a 30% parallel market premium, that represents an implicit cost of approximately $103 million.

Even with this adjustment, ASSM miners still pay royalties of only 1% to 2%,  generating between $34.5 million and $69 million on $3.45 billion in earnings. They pay no corporate income tax. They carry no CSR obligations, no employment reporting requirements, no environmental bonds, and no AIDS levy.

Their estimated net retention after royalties and the ZiG payment adjustment is still approximately $3.2 to $3.3 billion on $3.45 billion in gross earnings, compared to large-scale miners retaining approximately $700 to $800 million on $1.15 billion in earnings in 2025, and likely less in 2026 as the 10% royalty bites.

The fiscal stakes become most acute when examined against the investment pipeline that represents Zimbabwe's path to 100 tonnes. Caledonia Mining's Bilboes project, a $584 million development targeting 200,000 ounces per year from 2029, would be the largest gold mine in Zimbabwe.

When the 2026 budget initially proposed the 10% royalty at a $2,500 threshold, Caledonia's shares fell 14% in a single session. When the threshold was revised to $5,000 per ounce following industry engagement, shares recovered 12%. The Bilboes investment was modelled on specific fiscal assumptions, those assumptions have now materially changed. The same applies to Namib Minerals' proposed restart of Mazowe (1.2 million ounces at 8.4 g/t) and Redwing (2.5 million ounces at 3.07 g/t) requiring $300 to $400 million in committed capital, and to Ariana Resources' Dokwe project at 1.42 million ounces, the largest undeveloped gold deposit in the country.

These are Zimbabwe's 100-tonne assets. Their development is not guaranteed by geology. It is contingent on whether the fiscal framework, as it operates today, makes the investment rational.

The path to a sustainable gold fiscal framework requires four specific actions.

First, the government should publish a formal commitment to the current royalty thresholds, 5% below $5,000 and 10% above, with a minimum review period. The market's concern is not primarily the rate, it is the demonstrated willingness to move the threshold when prices rise. Legislative certainty restores the predictability that twenty-year mine investments require.

Second, capital expenditure allowances should be introduced, allowing full upfront deduction of development costs against taxable income would reduce the effective burden on new projects precisely when they most need capital. Third, the ZiG surrender mechanism should be reformed for large-scale miners. The implicit $104 million cost in 2025 is a hidden levy that does not build ZiG confidence and actively deters the investment that generates the foreign currency the ZiG depends on. Reducing the surrender rate for LSM, or introducing a market-rate compensation mechanism, would remove a structural disincentive without undermining the government's currency policy objectives.

Fourth, capital equipment should be exempted from VAT. Zimbabwe cannot attract large-scale mining capital while charging 15.5% on the machinery required to mine.

None of these reforms require Zimbabwe to abandon its legitimate fiscal interest in the gold sector. Gold at $5,000 per ounce is generating a windfall for everyone in the value chain. The question is not whether the government should participate in that windfall,  it should, and it does. The question is whether the fiscal structure, as currently designed, also builds the investment base that sustains that participation when gold prices eventually normalise.

A royalty that doubles automatically at $5,000, combined with a 24.75% corporate income tax on gross revenues and a hidden ZiG surrender cost, removes more than 40% of gross revenue from large-scale miners before a single community obligation, wage bill, or piece of capital equipment is paid for. That is a structure built for extraction, not for growth.

A fifth reform deserves serious consideration, one that is notably absent from Zimbabwe's current fiscal architecture but well established in mineral-rich economies that have successfully scaled formal mining output, production-linked tax relief. The principle is straightforward. A company that produces one tonne of gold carries a different risk profile, capital commitment, and employment footprint than one producing three tonnes, and both are fundamentally different from an operation at five tonnes and above.

The current framework treats all of them identically, creating no fiscal incentive to invest in expanding production and no reward for operators who do. A graduated structure tied to annual output milestones would change that calculus materially. A large-scale miner reaching three tonnes of annual production could see their effective corporate income tax rate reduced from 24.75% to 20%, recognising the additional capital deployed and the broader economic contribution of a growing operation. A miner reaching five tonnes and above could qualify for a further reduction to 15%, aligned with the reduced corporate rate already available in South Africa's Special Economic Zones for critical minerals investment.

Applied to Zimbabwe's current LSM landscape, such a framework would directly incentivise the expansion investments at Bilboes, the restarts at Mazowe and Redwing, and the development decisions at Dokwe, precisely the projects that carry Zimbabwe from 47 tonnes toward 100 tonnes.

The same logic applies to the ZiG export surrender requirement. Rather than applying a flat 30% conversion obligation regardless of a company's output scale or investment commitment, a tiered surrender structure tied to production milestones between 2026 and 2030 would create measurable incentives for formal sector growth. A large-scale miner producing below three tonnes annually would remain at the current 30% surrender rate. Between three and five tonnes, the surrender obligation would reduce to 25%, a modest relief that meaningfully improves working capital for an operator in active expansion mode. Above five tonnes, the surrender rate would fall to 15%, recognising that an operation at that scale is generating the sustained foreign currency inflows the ZiG reserves depend on, and that retaining a larger portion in hard currency is what funds the next phase of capital expenditure.

The corridor of 2026 to 2030 matters because it aligns the incentive window with the development timelines of Zimbabwe's major pipeline projects,  Bilboes targets first production in late 2028, Mazowe and Redwing require 18 to 24 months from funding to production, and Dokwe's development decision is imminent. A production milestone framework operative for five years gives the sector a planning horizon and gives government a measurable outcome to hold the incentive accountable against.

Beyond direct tax and surrender adjustments, two structural interventions would significantly improve the operating environment for large-scale miners without requiring the government to reduce any headline rate. The first is a dedicated mining reinvestment reserve facility, a mechanism that allows large-scale miners to set aside a defined proportion of annual taxable profit into a ring-fenced reinvestment account, exempt from corporate income tax for a specified period, provided the funds are deployed within four years into qualifying capital expenditure, new shaft development, processing capacity expansion, renewable energy installation, or community infrastructure. This is not a tax holiday, it is a deferral tied to performance. The company gets tax relief only if it actually invests,  the government loses no revenue on profitable mines that distribute earnings rather than reinvest them, and gains a larger future tax base from the expanded operations the mechanism incentivises.

Australia's Exploration Development Incentive and Canada's flow-through share regime both operate on comparable principles and have demonstrably increased exploration and development investment in their respective jurisdictions without creating the revenue leakage that blanket tax holidays produce.

Another measure will be the establishment of a Minerals Beneficiation Credit, a reduction in the effective royalty rate, applied to large-scale miners who process their gold beyond the doré stage within Zimbabwe, rather than exporting semi-processed material for refining offshore. At present, Zimbabwe's royalty structure makes no distinction between a company that exports raw concentrate or doré and one that operates a full refinery or value-addition facility domestically.

Creating a royalty differential, for example, a 1 to 2 percentage point reduction for operators who beneficiate to a defined standard within the country, would provide a direct fiscal incentive for the downstream investment that generates employment, skills transfer, and retained value far beyond what raw material export achieves. Several African gold producers have lost billions in value-added processing revenue to South African and Swiss refineries not because their geology was inferior but because their fiscal structures gave operators no reason to invest in domestic processing capacity.

A Beneficiation Credit corrects that structural gap, aligns fiscal policy with Zimbabwe's stated industrialisation objectives, and costs the government only the royalty differential on the subset of production that earns it by meeting the domestic processing standard.

Zimbabwe's gold sector proved in 2025 that the production ambition is real and the foreign currency benefit is transformative. 46.7 tonnes and $4.6 billion at the strongest gold price since 1980 speak for themselves. The question for 2026 and every year that follows is whether the fiscal framework is designed to reproduce and expand that performance, or to consume the windfall of an extraordinary price cycle without building the investment base for what comes next.

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