How Mthuli Ncube’s 2024 budget will hit your pocket

If you are a lithium miner

There is a major policy change on lithium. Currently, large lithium investors in Zimbabwe are processing and exporting concentrates. Now, they will be compelled to process lithium into carbonates, which is some two stages further up the processing chain. Concentrates are no longer seen as “beneficiation”, and would attract an export tax.

Lithium miners have until March to submit their processing plans. No new lithium licences will issued without this plan. Lithium miners were already hoping for a cut on their 5% royalty fees, to give them relief from a sharp fall in global lithium prices. A new tax may force them to scale back on new investment.

This rule means that lithium miners must now go beyond just the concentrator plants they have built to process ore. They now need to install converters for further processing of the concentrate to produce lithium carbonate.

More on miners

Ncube is imposing a 1% levy on revenues from lithium and granite miners and producers of quarry stones. This is necessary, he says, “to improve conditions within these (mining) communities”.

If you are a driver

There’s bad news, and more bad news. First, fuel will become more expensive. Mthuli is increasing the Strategic Reserve Levy by US$0.03 and US$0.05 per litre of diesel and petrol, respectively, with effect from January.

There is more: So, you liked the recently resurfaced Beitbridge-Harare highway? You now have to pay for it. Ncube proposes to increase toll fees from the current US$2 to US$5 or equivalent on what he calls “premium roads”. These include the Harare-Beitbridge highway and the Plumtree-Mutare road.

This means you now need to budget US$50 or the equivalent in Zimdollars for toll gates when you drive from Harare to Bulawayo and back, or US$60 from Harare to Beitbridge and back. How does this compare? Driving a passenger car between Johannesburg and Durban, just about the same distance as Harare-Beitbridge, will cost up to the equivalent of around US$33 return.

Without external funding, the government relied on the budget to fund the Beitbridge highway, but has struggled to pay contractors. The Plumtree-Mutare road was built using a loan from DBSA. We reported last year that this money was supposed to be repaid by 2022, but the government had defaulted. A restructured deal, at a lower interest rate of 5% from the previous 6.18%, would see an outstanding US$165 million being paid over a further 15 years.

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