The Chamber of Mines of Zimbabwe has proposed reducing royalties on lithium sulphate and lithium carbonate from the current 7% to 3%, while retaining the 7% rate on unbeneficiated lithium concentrates, arguing that the existing flat rate undermines investment in downstream processing.

The proposal was submitted to the Ministry of Finance, Economic Development and Investment Promotion as part of the Chamber’s Mining Industry Priority Areas for the 2027 National Budget, according to Mining Zimbabwe.

Under the current framework, a flat 7% royalty applies to all lithium products, including concentrates, lithium sulphate and lithium carbonate.

The Chamber argues that this approach fails to account for the additional value created through chemical conversion and beneficiation.

“Applying the full 7% royalty to the final value of lithium sulphate and carbonate would effectively impose the mining royalty not only on the underlying mineral value, but also on the substantial value added through processing,” the Chamber said.

Lithium sulphate and carbonate require significant additional capital and operating expenditure beyond concentrate production. The Chamber contends that a differentiated structure would balance government revenue needs with the country’s value-addition objectives.

The Chamber’s proposal is straightforward:

· 7% royalty retained on unbeneficiated products, such as lithium concentrates.

· 3% royalty applied to lithium sulphate and lithium carbonate, which undergo further chemical processing.

The Chamber said the reduction would recognise the value created through beneficiation and encourage producers to pursue further downstream processing in Zimbabwe, while ensuring the government continues to receive revenue from the underlying resource.

The proposal comes amid longstanding concerns among lithium producers over Zimbabwe’s tax regime, with companies previously raising issues about the cumulative burden of taxes and statutory charges. The Chamber has made specific representations on royalty calculation methods in the past, including concerns that royalties were being assessed using the price of lithium carbonate rather than the lower-value concentrate actually produced in the country.

Zimbabwe has been pushing to capture more value from its lithium resources, with the government moving to restrict exports of raw concentrates and encourage local chemical processing. The Chamber’s proposal is intended to reinforce that policy by making beneficiation economically more attractive than exporting less-processed material.

The submission forms part of the Chamber’s broader budget representations ahead of the 2027 fiscal year, and it remains to be seen whether the Ministry of Finance will adopt the differentiated royalty structure in the final budget.