Government has maintained that it will not re-introduce the Windfall tax on the mining sector as it will militate against levels of mineral exploration activities in the sector.
Mines and Minerals Minister Maxwell Mwale says explorations is the backbone of the Zambia’s future in the mining sector stressing that the introduction of super taxes of mines would lead a drop in explorations as witnessed when the windfall tax was introduced in Zambia.
The Minister was speaking at the presentation of a cheque of dividend, a payment worth $ 18.1 million, by Kansanshi Mining PLC a major holding of First Quantum Minerals FQM to Zambia Consolidated Copper Mining Investment holdings ZCCM-IH, a minority share holder of Kansanshi.
The Dividend is the first single largest payment ever received by ZCCM-IH from the firm which is the highest since it began its operation in the mining sector.
Mr. Mwale said the gesture by the firm is a clear demonstration of Government and the countries benefits from foreign investments in the sector as opposed to some sections and sectors of the country that Government is not benefiting from its investments.
And First Quantum Minerals FQM Resident Director Kwalela Lamaswala said that the payment follows a review of Kansanshi Dividend Policy by the board and comprises a special Dividend of US$ 15.6 million for the end the financial year of 2007 while the other US$ 2.5 million accounts for the end of the 2009 financial year.
He said the objective of the review of its policy is to ensure that its share holders receive an attractive return on their investments.
Speaking at the same function as he received the cheque ZCCM-IH Board Chairman Alfred Lungu said that the Dividend not only represents a valuable return on its investment but that it will also enhance opportunities of the Government holding to supplement its investment portfolio for the ultimate benefits of the Zambians.
He also said the Dividend will help ZCCM Holdings to offset the remainder of its Legal liabilities carried over from the old ZCCM Limited before the firm’s transformation into ZCCM in 2002.
Mr. Lamaswala called on other investment firms to emulate what Kansanshi has done in order demonstrate their investment worthiness in the sector.
QFM
Yes, Let them get our minerals tax-free, at no fee, so that the MMD can remain in power and the people of zambia can remain in poverty.
of course otherwise the choncholis will persecute movement of mad dogs(MMD) GRZ:d
see how they are stealig before they leave office and also gathering money to buy voters n rig elections? 2011 must be different, no cowards…a decent life where people who take our resuorces must be made to pay is what zambia wants…letz move this peoplle out asap..
$18.1m:-?:-?:-?:-? thats 88billion zmk, One Questionhow does the ZCCM-IH utilise this money anyone who knowz guyz?
Super taxes where recently introduced in Australia on minerals and some cadre is saying exploration works that will be affected,what nonsense is this?%-(%-(%-(%-(,thats the problem og letting Chocholi’s bankrolling the Party’s activities
” Speaking at the same function as he received the cheque ZCCM-IH Board Chairman Alfred Lungu said that the Dividend not only represents a valuable return on its investment but that it will also enhance opportunities of the Government holding to supplement its investment portfolio for the ultimate benefits of the Zambians. ”
In other words, they are going to return the dividends straight back to First Quantum and Equinox: they are going to buy more shares in First Quantum and Equinox with them.
Real shareholders of ZCCM-IH are not only not going to see a cent of these breadcrums, the real payments are to the MMD anyway – BRIBES.
People are dying in hospitals without medicine or operations, children are going without futures because they get thrown out of school.
Just to illustrate what breadcrums this $2.9 million for 2009 is:
Production 2008: 215,000 tonnes of copper
Production 2009: 244,000 tonnes of copper (estimated)
Copper price: $7,000 (average)
Turnover for 2009: $1.708 billion
Profits: $1.024 billion (at 60% of turnover, like Equinox)
Dividends: $512 million (at 50% of profits)
Actually paid out: $2.9 million
It would be more accurate if Kansanshi was actually open about their finances. But they’re not. We are being robbed blind.
Come on guys, please think if the masses who are suffering, please. KK would have never let this kind of practices go on. Those investors are laughing at you like no other! They cannot believe how thick you leaders are, I am so shamed to share my birth place with these people!!
I cry for my beloved Zambia. Just ask SA how they deal with foreign Mining Investors…..
Thanks MrK for you stats. How can we help our poeple please?: How much did these people pay initially for mining rights in Zambia? I would like to know please.
Just to illustrate what breadcrums this $2.9 million for 2009 is:
Production 2008: 215,000 tonnes of copper
Production 2009: 244,000 tonnes of copper (estimated)
Copper price: $7,000 (average)
Turnover for 2009: $1.708 billion
Profits: $1.024 billion (at 60% of turnover, like Equinox)
Dividends: $512 million (at 50% of profits)
Actually paid out: $2.9 million
It would be more accurate if Kansanshi was actually open about their finances. But they’re not. We are being robbed blind
4 Kashman,
” how does the ZCCM-IH utilise this money anyone who knowz guyz? ”
It’s in the article.
” the Dividend will help ZCCM Holdings to offset the remainder of its Legal liabilities carried over from the old ZCCM Limited before the firm’s transformation into ZCCM in 2002. ”
And…
” ZCCM-IH Board Chairman Alfred Lungu said … it will also enhance opportunities of the Government holding to supplement its investment portfolio for the *ultimate* benefits of the Zambians. ”
In other words, they are going to pay debts and buy more shares – from the company that gave them the dividend – they’re giving it back.
Sorry ZCCM-IH shareholders, you get shafted again.
This is a criminal operation that should be investigated by the ACC and Task Force.
That is what corruption does, if these guys were not corrupted they would have acted , but these crooks have sold us for their own pockets. who will deliver us from this syndrome, yes it noone but if good laws are put into place
Don’t have the nuts to tax miners. Go and borrow a pair from either Hugo Chavez or Evo Morales.
Short sighted, myopic and selfish policies by an inept, corrupt and visionless bunch in govt.!! Iwe Mwale, fwala ichimpompo kuli bongobongo yobe iwe chi colour!! Exploration is about developing new mines, its about the future and incentives can be formulated to attract such, but what about the already developed and productive mines which were developed with tax-free machinery, and are now churning out super profits? Do these still fall under exploration? What nonsense is this????
9 Kuomboka ne nsaka,
” How can we help our poeple please?: How much did these people pay initially for mining rights in Zambia? I would like to know please. ”
People have to become aware that the source of their poverty is this corrupt treatment of the mines. Every time a minister says ‘we don’t have the money’, they should be reminded that they have a source of hundreds of millions of dollars at their fingertips.
There should be demonstrations against this non-taxing of the mines. The Unions should get on board.
And of their non-payment of dividends (I do not consider these $18.1 million anything like dividends even if it was all for the year 2009, which should be at least 50% of profits).
but these quacks we have fo leaders!!! really do they believe in what they do??
i believe even the speeches are wriitten by the chocholees?/
What a life and what a legacy!!
Only in Zambia can this happen. I don’t know anywhere including China where they do have mines can this be tolerated…
I am thinking, maybe this investors are channeling all the money meant for tax (say 20% of it) back to the MMD coffers. What a shame for our people. Why do these M.U.T.H.A tombelas so think? Anyone in Zambia with internet should educate the common man and rise up to these thieves. The things, there is no shame in it now the FTJ is back on the scene. President is set; steal and maintain MMD in power at all costs. I would rather Zuma (from SA with all his wives) is our leader. I know how much he is hated in SA but at least he understands that the economy is best left to people who understand!
And what do the opposition parties say about this? PF, UPND etc? Anyone know their stand on windfall tax?
scandalous, this is a scandalous situation
18 M$ dividends while in the same time 2.4 Billions $ of profits !
ZCCM-IH received only 0.5 % of its profits !
and MWALE said that zambia won’t reintroduced windfall taxes because zambia received dividends loll
winfalls taxes near 400 M$
dividends 18 M$
who receive money ?
why this hypocrisy?
16 Abwenzi, ” Only in Zambia can this happen. I don’t know anywhere including China where they do have mines can this be tolerated… ”
Actually with the massive rights that have been given to corporations, in the US they don’t pay taxes either. They pay an effective tax rate of between 5% and 0%. They do this by hiding profits through offshore accounts and tax havens, and hiring entire legal departments that help them evade and avoid taxes.
This is why we can’t depend on foreign corporations to develop the country. They will maximize profits an any way they can – tax evasion, underpaying workers, corrupt practices like bribing government officials.
Either we tax them 20% of their turnover, or they need to be nationalized. There is no other way we can benefit.
I have just to laugh. What is $18 million after 10 yeras? You Zambians, what is going on? These people make big money and you say $18 million after 10 years is a lot of money? owee ubupuba mu Zambia. When Australia wants to put a 40 % tax , you guys are saying no tax!!!! I an really annoyed let me be off here….you dull selfish creatures.
And another thing. We may have real crimes here. In the US, it is ILLEGAL for US corporations and nationals to bribe foreign officials. So if we can find evidence of US citizens bribing Zambian ministers, they can go to jail. In case of a trial, there would be disclosure, which means a lot of details will come out.
What we need to do, is contact former Union members who may have sit in on meetings, who have inside information into who bribed who, when and for how much. Disgruntled miners, trade unionists, former ministers could be crucial in gathering information.
The Post should take this up – there are huge stories here, because Zambia is losing out on hundred of millions of dollars a year in taxes, let alone dividends.
A bunch of I D I O T S who have gone in politics to serve themselves, and everyday there are going around the country preaching that there are a listening govt, whom do they listen from? People have spoken that they want the windfall tax back……honestly sometimes you wonder what these so called ministers discuss in cabinet meetings…….
For a song, they continue to sell the country’s finite resources….for a few pennies to themselves they let the country’s minerals go while the majority wallow in poverty….cry the beloved country….:((:((:((:((
# 10
MrK,
unfortunately former chairman Maxwell Nkole was sacked and his Task Force on corruption has been disbanded in september 2009 to clear Chiluba 🙁
and ACC is a puppet 🙁
# 14
MrK,
the purpose of the govt is to hide as possible every embarrassing thing about taxes, corruption, despoilment
it gives only hot air, lies or distorted truth
so how to call up people ?
How many people read accounts of FQM to know how much Kansanshi mining really earn ?
How many people know that windfall taxes are not harmful to mines and jobs ?
How many people know that $18m is a crumb ? the amount of minority interest due to zccm-ih by kansanshi is overtaking $300 million !!
How many people know that former chairman Maxwell Nkole was sacked and his Task Force on corruption has been disbanded in september 2009 to clear Chiluba ?
How many people read the very interesting Maravi blog ?
I now see why in the US, industrial Unions in the fifties were infiltrated by mafias. They saw the corporations hiding from govt and the their employees. But in in our own case the mafia appears in the name of MMD. PIPO! shibukeni or mwafa njala iyo!!!
cont. from #26
How many people know that 100 million dollars were swindled from ZCCM ? the govt knows WHO play dirty trick, and WHERE is money !! but nothing was done…
How many people know that the govt refuse to answer to questions posed by a member of the parliament (MP Simuusa) ? Unheard of in a republic, unless zambia is banana republic!
How many people know that Mines Ministry Permanent Secretary G. Beene pressured and sacked Secretary to the Treasury James Mulungushi in 2009 because his report left out key details of the proposed windfall tax on copper ?
How many people read the report “For whom the windfalls ? Winners and losers in the privatisation of Zambia’s copper mines” from John Lungu and Alastair Fraser ?
If people knew this, MMD would be swept…
# 27
Nakabalika, just an example…
mines minister Maxwell Mwale paid the union officials (MUZ) K1 million each when he addressed them in Luanshya.
“The money was given to the union leaders so that they could not allow miners go ahead with the planned peaceful demonstrations regarding the opening of the mine.
Tuesday, April 21, 2009 Ex-miners accuse govt of compromising MUZ
full article on maravi blog
So becoz of mafia grz,the only way is to remove them by right of franchaise and then, only then can they be persecuted. As the state of affairs is today, the dark activities are so deep rooted in grz such that even honest citizens will fight you to death once they become benefactors from these activities, without really undstanding the matrix what really goes on
A good and well planned civil education of the masses of what their rights are in all sectors of the state economy is the best way to shake the heavy bellied ministers off their couches. For instance sensitisation of the masses on what benefits are expectd from state revenue. Once the masses are aware of what is rightfully theirs, they will take responsibility in demanding the provision of goods and services and also ensure the fulfilment of such provisions. Currently The mindset of a layman is set to believe that only when you are a bigshot do you get to eat from the national cake. WRONG, WRONG,WRONG.
this is utter nonsense..you chaps are stealing our resources..we need to benefit ..ka mwale kuyipa!!
Conflicting statements both come from Max Mwale and his Deputy Boniface Nkata.
Yesterday’s story IN THE RELATED NEWS above -State reveals abolition of windfall tax.Boniface nkata
says if Govt had continued to charge windfall tax on excess profits in the mining sector amid the Global financial crisis the affairs of the country would have become ungovernable.
Today Maxwell Mwale is telling the nation – State wont re-introduced the windfall tax bcoz introduction of super taxes on mines would lead a drop in explorations.Who is giving us a proper Answer. :-?I smell a rat:-s
Only a FOOL will let these Infestors reap you off your money’s and use part of those profits to bollow you as a loan. Instead of this OLD STATE HOUSE caretaker going to China to bollow money’s to construct his Roads, he should try and mobilise these funds locally through taxes to the Mine. Why can’t these fools understand that we can only develop with our own local resources and not borrowed funds. I would be ashamed t make such a statement if I were Maxwell Mwale.
First they asked the mine owners whether it is nice & acceptable to make them “pay” Windfall Tax, which naturaly they rejected. Since the Investors are the main financiers for the MMD campaign, the MMD oblidged.
WE need to kick out MMD from power for us the citizens to enjoy the wealth God gave us. Now we have surrendered it to foreigners. Zambia sometimes makes me weep. The leaders are our servants but they rule over us. This is a mockery. Let us democratically reject them, if they refuse we violently take over. Thats the language they will understand.
These profits made by the foreign investor is what is used to pay back for all the poor decisions you people make in your country. You elect uneducated leaders who mess your country up and then come running to us for help.
The West has to fund you with donor aid, it has to care for your illegal immigrants, it has to give jobs meant for its own people to your people, it has to help you sort out your govt policies, it has to build capacity for you, it has to give you money to build infrastructure, etc… and now you complain with greed because you dont want them to make a bit of money in your country.
What an ungrateful bunch you are!
36 John James,
Blaming the mark, the characteristic of every conartist.
Clearly our government has no heart for the little paid Zambians they get half PAYE tax from and yet it has one for the mining companies whose one year profits can finance our total national budget twice or more. we don’t need a government that thinks with its pockets MMD enough is enough.
1,000 investors are on their way to Zambia… RB said.
I support the minister. We can not be thinking of re-introducing the windfall tax. It will be a disaster.The junior mining companies and exploration companies will not cope and they ultimately leave the operations in Zambia. The mining companies in Australia are are leaving the country after the government has introduced the windfall tax.Let these foreign companies do the exploration work, identify the mineral resources and open mines in the whole country and that would be ok for Zambia. Introducing other taxes will just frustrate them and that would be the end of exploration activities and the end of the possibility of opening new mines.Some of us have worked with these guys in exploration and we know their thinking as far as the issues of taxation are concerned
Godfrey,
What is the use for foreign corporations opening mines in Zambia and keeping all the profits, and not paying any taxes, while paying 58,000 miners wages that do not cover the cost of living?
How is that a good thing?
And even though the price of copper is at historic highs, how come the Kwacha is at historic lows?
Do you think there is a connection between the fall of the Kwacha and the fact that Zambia is not benefiting from the foreign owned mines?
Hi, I live in Australia and regards to the ‘super profit’ tax (40%). This tax had only been proposed by the government one week before our Federal Budget which came down last Tuesday.
It doesn’t exist yet, and may never exist.
So far we have seen a drop in mining shares which has wiped out billions of dollars in Australians superannuation funds. Mining companies have canceled new exploration projects as well as downsizing personnel and are preparing to ‘wait out’ the current government.
As basically the resources aren’t going anywhere and no-one else is willing to go find and dig them up.
Remember this tax doesn’t even exist yet, it’s cost us billions and the mining companies (who are our golden goose) are looking at laying elsewhere, like say Zambia.
ps: good luck…
All of a sudden all the mine apologists come out of the woodwork. Guess what – there is no point to having a mining industry that does not benefit the economy. I guess they really don’t like paying taxes, right? Well guess what – everyone else has to, what makes them so special?
The mines will always threaten to leave of put of new exploration, or whatever.
Zambians would not threaten to leave. The mines should be in Zambian hands again.
am relly tired of this,2011 i will fish them out like the way a dog is chased
44 father walya,
One of the good things about democracy is that every 5 years, the old order can be turfed out, and all the cozy agreements can be disrupted. It is time that there is a new party in power, if only to upset all these corrupt agreements with the mines.