Caledonia Mining (LSE:CMCL) said changes to Zimbabwe’s proposed 2026 national budget have materially reduced the potential impact of higher taxes and royalties on its gold operations. The government has revised earlier plans, easing concerns across the mining sector.
Under the updated framework, the proposed increase in the gold royalty rate to 10% will only apply if gold prices rise above US$5,000 per ounce, compared with the earlier threshold of US$2,500. In addition, proposals to restrict the upfront deductibility of capital expenditure and to introduce a 15% withholding tax on interest payments linked to offshore loans have been dropped.
These revisions are particularly relevant for Caledonia’s debt-funded Bilboes Gold Project, where the removal of the interest withholding tax improves funding certainty. With the amended measures expected to be legislated before the end of the year, the company said it does not anticipate any change to the financial outlook for its Zimbabwean assets at current gold prices. Management added that the government’s shift signals ongoing support for the mining industry and future project development.
More about Caledonia Mining
Caledonia Mining Corporation Plc is a gold producer and developer with a portfolio of assets in Zimbabwe. The group focuses on the operation and advancement of gold projects in the country, including the Bilboes Gold Project, and is listed on the NYSE American, AIM and the Victoria Falls Stock Exchange.
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