Amplats unit takes Zimbabwe Revenue Authority to court over $24m royalty dispute
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.
(By Nelson Banya; Editing by Elaine Hardcastle)