Amplats unit sues Zimbabwe Revenue Authority over $24m royalty dispute

HARARE, September 15 (Reuters)Anglo-American platinum AMSJ.J The Zimbabwean unit has sued the Zimbabwe Revenue Authority (ZIMRA) over a $24 million royalty dispute, according to court documents seen by Reuters.

The Unki Platinum mine filed an urgent application with the High Court of Zimbabwe on September 9 to stop the Revenue Authority from seizing money from the miner’s bank account, which ZIMRA says is the value of royalties owed to it. owed by the 100% subsidiary of Amplats.

In its lawsuit, Unki said it paid the disputed outstanding royalties in Zimbabwean dollars on July 29, but ZIMRA insisted that payment must be made in foreign currency.

A ZIMRA spokesperson said they were unable to provide an immediate comment.

Zimbabwe currently allows foreign currencies to flow through the economy alongside the local dollar.

In 2020, the government ordered miners to pay royalties in foreign currency. Although this rule was relaxed in February 2022 to allow mining companies to pay 50% of their royalties in local currency, Unki says the Zimbabwe dollar should be able to be used to pay all taxes and royalties.

The Amplats unit said ZIMRA’s move was “illegal” and threatened its business because it is unable to trade, pay suppliers and purchase raw materials.

“The consequence is that the plaintiff has been locked out of his bank accounts with devastating consequences,” Unki said in his application.

Unki and ZIMRA have been embroiled in a royalty dispute since 2018, when a special mining agreement with the government allowed it to calculate its royalties net of expenses.

The two sides have argued over the calculation of the royalties, with ZIMRA insisting that Unki pay royalties on the gross value of the ores refined. Unki, however, says it only produces concentrates, not refined metals, and sells them to refiners in South Africa.

The $24 million claimed by ZIMRA in royalties underpaid by Unki resulted from different interpretations of tax regulations by the two parties, leading to different calculations.

(Reporting by Nelson Banya; Editing by Elaine Hardcastle)

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Esther L. Steinbach