Unki Platinum mine filed an urgent application in Zimbabwe’s high court on Sept. 9 to stop the revenue authority from seizing the money from the miner’s bank account, which ZIMRA claims is the value of royalties it is owed by the wholly owned Amplats subsidiary.
In its court application, Unki said it had paid the disputed outstanding royalties in Zimbabwe dollars on July 29, but ZIMRA has insisted the payment should be in foreign currency.
A ZIMRA spokesperson said they were not able to provide an immediate comment.
Zimbabwe currently allows foreign currencies to circulate in the economy alongside the local dollar.
In 2020, the government ordered miners to pay royalties in foreign currency. Although that rule was relaxed in February 2022 to allow mining companies to pay 50% of their royalties in local currency, Unki argues the Zimbabwe dollar should be able to be used to pay all taxes and royalties.
The Amplats unit said ZIMRA’s move was “unlawful” and threatened its business as it is unable to trade, pay suppliers and purchase raw materials.
“The consequence is that the applicant has been locked out of its bank accounts with devastating consequences,” Unki said in its application.
Unki and ZIMRA have been embroiled in a dispute over royalties since 2018, when a special mining agreement with the government allowed it to calculate its royalties after deducting expenses.
The two parties have sparred over the calculation of royalties, with ZIMRA insisting that Unki should pay royalties on the gross value of refined minerals. Unki, however, says it only produces concentrates, not refined metals, and sells these to refiners in South Africa.
The $24 million which ZIMRA claims as underpaid royalties by Unki arises from the two parties’ different interpretations of the tax regulations, leading to different calculations.