FINANCE and National Planning Minister Situmbeko Musokotwane says that although the Patriotic Front (PF) publicly opposes government’s revised policy on taxes in the mines sector, the opposition party is on record stating it prefers the current policy.
Dr Musokotwane has said that it is surprising and contradictory for the PF to give an impression in public that it opposes Government’s mining tax regime and yet this is what the party wanted.
Dr Musokotwane said this in Lusaka yesterday during a recording of ‘Culture Remodelling’, a television programme under the theme ‘Health Check on the Zambian Economy’.
He said that in 2008 the PF president Michael Sata wrote a letter to then Finance Minister Ng’andu Magande stating that the PF opposed the windfall taxes that Government had introduced.
Dr Musokotwane said that it was surprising and contradictory of the PF and its ally, the United Party for National Development (UPND), to now oppose Government’s decision to review the mine tax regime accordingly.
“The UPND/PF is amazing and surprising to condemn Government for removing windfall tax when there is evidence that Mr Sata had written a letter to my predecessor [Ng’andu Magande] opposing the decision.
It is strange that these people are on one hand making political pronouncements before people when it suits them and on the other they quietly support Government,” he said.
[pullquote]In the letter dated March 19, 2008 to Mr Magande, who was then minister of Finance, Mr Sata expressed concern at the introduction of the windfall tax, saying that this could stifle growth in the sector and cause job losses.[/pullquote]
Dr Musokotwane cautioned Zambians against taking such leaders seriously as they are showing inconsistence on matters affecting the nation.
He said the current taxation system is aimed at attracting more investment into the country and that it is in tandem with the global taxation methods applied in several mining countries across the globe.
Dr Musokotwane said that Government still collects windfall taxes from profit made by the mining firms in the country. In 2008 Government scrapped windfall taxes on revenue for mining companies following reduced copper prices on the world market.
In the letter dated March 19, 2008 to Mr Magande, who was then minister of Finance, Mr Sata expressed concern at the introduction of the windfall tax, saying that this could stifle growth in the sector and cause job losses.
Dr Musokotwane said it is, therefore, shocking that the same opposition party is now attacking Government for scrapping the windfall tax on revenue in the mining industry.
Meanwhile, Dr Musokotwane has said that Zambia’s economy is experiencing an unprecedented growth, which will soon have positive trickle-down effects to the country’s population.
He said Zambia’s economy has remained good and that global financial experts have cited the country as one that has emerged from the global financial crisis virtually unscathed.
He said the expansion of the economy is evidenced by the growth in the mining and construction industries, as well as in the recently announced all time bumper maize harvest.
“We are very confident that our economy will continue to expand,” said Dr Musokotwane.
Dr Musokotwane said the mining industry is this year expected to record higher production because of the newly opened Luanshya, Lumwana and Munali nickel mines.
He also said that the change in the national budget cycle effected last year has accelerated infrastructure development and other capital projects.
[Zambia Daily Mail]
There no need for any taxations in zambia since Chiluba will again steal it from the nation.Just make it a tax free nation…
Govt needs to look at the effects scrapping the windfall tax has on the average Zambian. Address that and they will win the next elections.
Wait… no… these people do not really care about the average Zambian, they are comfortable and eat 3 times a day with some in-betweens. Even their dogs eat a balanced diet every day.
Politics is from hell itself.
Our president is a chameleon, inconsistent and we do not where he is taking us. I did not not know that we were against the introduction of windfall tax, now that it is no more, we want it returned. We are indeed a very shameful bunch of directionless individuals, without principle, nor ideologies to stand by, our job is to oppose and oppose and oppose, am very embarassed by this revelation. Its barely three years ago we were against it, Mr inconsistency himself even wrote a letter, what a shame, today we are for it, really where do we stand. Am very disappointed in our party.
Ba Musokotwane mwagalafye! You mean up till now you dont realise that the only thing consistent about the poisonous cobra is his inconsistency? Another example – promises to drop all charges against Chiluba if elected in 2006, but when all charges against Chiluba dropped in 2010, his party is the first to protest at the outcome!
#2 Eagle, and if you thought that PACT will change the status quo, better think again. Ministers will always have three square meals a day, be they opposition PACT or TACT, ADD or SUBTRACT, or ruling MMD or DMM. If you want three meals a day for your family, do something for yourself rather than expecting manna from politicians.
Does it matter whether PF opposed it or not, more over,is it only Sata who has been banging on about this tax! almost every learned Zambian who knows what tax is has voiced their concern,even the BOZ governor! what is important here is to do the right thing not finger pointing
Its so foolish for someone to came and tell us wthwer PF or UPND or whoever opposed then windful tax. Please continue makin noise. The windful tax is meant for us the poor people , i dont see any sensible person thinking otherwise that the investor will actually invest more when that invester will not be asked for windful tax. Many of us know our soil is our only benefit God has given us and we let the Muzungu or rather chinese to get most of it make profits so much on it and just pay us corp tax., and abit on royalties. please go learn the south african model or Ghanian model.
when God has blessed u with knowledge dont politic do the right thing or actually resign , God will count u a blessing. am sick and tired of people who know the way and decide to ignore what to do.
PF leader Michael Sata is an opportunist who plays to the gallery to gain political mileage. He can not be trusted to preside over Zambia. That’s the problem with people who talk too much and postulate that they know it all because in the end they contradict themselves. This is exactly what Sata did in 2006 when he promised to drop FTJ’s plunger cases which he said were meant to victimise FTJ by LPM. This country deserves better and we are not short of capable and veritable people.
Well spoken Dr Musokotwane. I vividly remember that hot debate when Sata opposed Levy’s introduction of the windfall tax. Please publish the letter as die hard PF cadres have short memories.
I think that Sata is also on record at the time as assuring the mining industry that he would withdraw the windfall tax when he assumed power. This was captured in the Post and I read it. Can someone please ask Mmembe to publish that article again, or LT to retrieve the article for us? It would be interesting to see the comments of the PF cadres on LT. Come on guys, we are waiting to see what you are made of: is it solid integrity or shameless inconsistency and political expediency?
#5 Some of you bloggers think think that everyone who speaks one word against the govt is an opposition cadre. That mentality is wrong – you are the types who encourage govts to oppress its people. If you are gaining something from govt for that attitude my friend, then all power to you. I am an independent human being and have worked my way up to where I am now – no hand-outs, no b.u.t.t. licking.
By the way, yes, I am able to support my family and extended family without groveling at the feet of some political retard.
Nshiku tukile mune, ayo yonse mapalo **==
#6, I did not see your post. So you have already started your defence?
#7, the downside of windfall tax has been ably explained by government. After weighing the pros and cons, our government (yours and mine) has decided on the best approach to this matter. If you do not like it, wait for 2011, but if Sata (or HH as in PACT) wins that election then you will have to wait for 2016.
#10:
I am with you all the way!!!
The George Bush mentality has gripped Zambia by the neck to the extent that its about to cut off oxygen to the brain. Why is not okay to be independent in Zambia? You can’t point out the wrong before some yoyo, some patz, surfaces and stick a ‘cadre’ label on you like thy know squat about you. What a bunch of shmacks!
Manna from politicians?! No! Politicians should not be allowed to get manna on the backs of Zambians. That’s what has been going on for decades and that’s gotta stop. It matters not who is in office. People First!
That means, no allowances, servants, multiple cars, hefty gratuity, big loans, Morningside/Milpark clinics, smaller entourage, free delivery of newspapers on weekends, deputy ministers, ….
UBUTUTU MULEKE!
Even if the claims made by the Finance Minister were true, what matters is that the PF is for the reinstatement of the Windfall Tax now.
And does the Windfall Tax even go far enough? I say cap 100% of profits just above the cost of production and when they leave, nationalize. Let’s have some clawback for the over $10 billion lost to the Zambian economy since about 2004.
Well said #10
looks like anyone who says anything against mmd is PF kaponya
The only explanation i have read from government is that they couldnt re-introduce this tax for fear of losing popularity,thats according to mines minister,is this what you can call pros and cons. two wrongs cannot make a right,if Sata said he was not in support,does it mean that even mmd should think in the same lines
Katie my friend. Its Govts ploy to use the money they were supposed to tax the mining firms to their own advantage i.e use it to beef MMD for 2011 elections. Do u realise that Govt has finished contructing alot of schoolsand hospitals , do u know that thats part of the windful tax we got from the mining firms. My dear Magande has been Finance minister for a very long time and if at this moment windful tax was really not an issue he wouldnt have been talking.
its not reallly that his politiking, we should know better…..i know Musokotwane proposed this he was in Finance….i strongly beileve if it was wrong govt would not have introduced it. The firms that run away are not true investors …..let the govt do the right thing let them tell how much wed get from windful tax and how much and
PF can oppose anything and everything!! Sata has no long tern vision except offering oppositon ( he is more useful as an opposition leader than been the incumbent president). Just like Bwezani, he can’t have a 30 year strategic plan for the country…both are too old for that, they had their time.
Contradictions and going round in circles is the order of the day in Zambia. Both the government and the opposition are guilty of this scourge. This story confirms this assertion. I urge bloggers to read it with an analytical mind.
You read it in the post,then its there somewhere in the archives,look for it yourself,why should the Post or even LT do it for you,its simple,just google it or send an email to Mmembe,if you want to argue a point have facts ready in your hands,not asking other people to get them for you
# 16 Aisha,
I agree with you and with some posts above. Mr Sata is a short-termist and that is why he would fix Zambian problems in 90 days. I believe some of the immediate issues he focus on will include removal council collections from the markets and bus stations, and may be amend that fine of K50 which he introduced for anyone found urinating in public. And people will be saying he is a man of action.
#13 That is wishful thinking you will end up like your Southern neighbors. The question we should be asking is: Aren’t the current taxes too low? Shouldn’t we increase them? May be not to the level of “windfall” but increase for increased revenue for GRZ. Another issue is: Are the mining companies honest in their reporting of profits? This worries me a lot because I believe there is tax evasion. As for the PF leader – to take this man and his chola boy seriously would actually be a grave mistake. The Post should remind us – they reported it when he opened his mouth in 2008.
#21 Adviser
You are very right that we are not collecting as much because our systems are porous. For example, we do not know what system we have for mine companies to declare the quanitities of gold or diamonds they mine apart from whatever is their main ore under the appropriate licence. So, the question to add to yours is “are the figures of contribution to GDP by mining activities accurate?”. The answer is a big NO, and I feel this is where ZRA needs to innovate to capture a true reflection of what these mine companies are amassing from Zambia’s mineral resources.
# 3 You Yourself is a Chameleon hiding under the PF umbrella as a cadre to try and cheat the true PF supporters..Changing your mind is one of the virtues of leadership if your neck is stiff then you don’t deserve to be a leader. If sata has changed his position then at least you are assured that you are dealing with a human being who accepts when he has erred.
Now #3 listen, you are truly a cadre that is why you follow aimlessly. let the real PF supporters make their own informed decisions without being disturbed by your cadre mentality.
what is the right thing to do ?look at chingola and the roads .and when we say fix the roads .you say u have no money .and when we say introduce windfall taxes ,u say even sata opposed them .what is the role of govt kanshi .
`Let the economists speak against Musokotwane who is also an economists yet different views. This is how far economists can be inconsistent. Even the accountants like Mutati may have a different view. yet with science, the view by one scientist is consistent with the view of the other.
UBUTUTU BA ECONOMISTS!
I told you Mr. Sata is a flip flopping artist. I have told you when he is around crowd A he says one thing and when he is around crowd B, he will say something completely contradictory to what he said to crowd A.
Mr. Sata is very inconsistent on many issues. Wasn’t he the same one who said he will drop charges against Dr. Chiluba only to change it when Dr. Chiluba is actually acquitted.
And this is the man some people want to form govt.
May I remind dr. Musokotwane of the Post’s headline “Musokotwane links economic volatility to excessive dependence on copper”. (Wed 17 Feb. 2010.)
And yet here he is again defending the non-taxation of the mines on the grounds of future investment in mining.
So how and when is Zambia supposed to move away from depedency on copper?
” He said the current taxation system is aimed at attracting more investment into the country ”
Low taxes for the mines will only help to attract more investment in mining. So when are we supposed to end this economic volatility by diversifying, and what money is going to be used for it?
It is PF again,this man(Mr. Sata) is very inconsistent on many issues.
(1)Support me i will drop charges against Dr. Chiluba only to change it when Dr. Chiluba is actually acquitted
(2)Zambian never be fooled by Sata,more money in your pockets without TAXATION.
Sata will never appreciate anything GOOD,please learn to give CREDIT were it is due.Your ARRONGANCE will cost you again,if you are standing in 2011 elections.Be consistent.
Zambian Opposition Urges Cancelation of Mine Taxes, Post Says
March 29 (Bloomberg) — Zambia’s opposition Patriotic Front party urged the government to abandon planned windfall and variable-profit taxes for the mining industry because of the impact they may have on employment, the Saturday Post reported.
The proposed tax regime may place current jobs at risk and threaten future expansion plans by mining companies, the Lusaka- based newspaper said, citing Michael Sata, the party’s leader.
Finance Minister Ng’andu Magande challenged the Patriotic Front to hold rallies in Zambia’s copper-rich northern region to explain how the new tax regime will affect the companies, the newspaper said.[tbc
cont.
Magande said yesterday that lawmakers have rejected proposals by mining companies to change the proposed taxes, which become effective on April 1.
Source: Bloomberg dot com
Well he has been caught with his pants down. How he will spin this will be interesting to read.
From “Quote of the week” by Zambian Economist
“….We are not in favour of variable tax or windfall tax based on gross revenue. We therefore suggest that these two taxes be abandoned…..”.
– Michael Sata (Post 29/03/2007)
Further evidence of Mr. Sata’s flip flopping. By the way, can someone please remind the PF that we are still waiting for the PF report on PF led councils.
Does Musokotwane imply that government policy is based on the PF pronouncements of 2008?
This is cheap politics and the people of zambia will not have their livelihoods improved by such type of reasoning.
The conditions of 2008 are very different to the conditions of 2010 as world economies emerge from the economic down-turn leading to massive increases in the prices of copper and hence super-profits by the mining companies.
It is with this in mind that any right-thinking Zambian should be calling for a “windfall” tax before our minerals run out.
Surprisingly, in the Post newspaper of March 19, 2006, Sata reversed the position of the Patriotic front asking the MMD government to abandon the windfall and variable taxes. Apparently Sata stated that PF was concerned that if mining companies were not allowed to build up enough capital for
reinvestment and if the international community perceived Zambia as a country that could not honour its agreements, jobs would be in jeopardy, as expansion plans and new investment projects would be shelved.
The Finance Minister Ngandu Magande was surprised by the Patriotic Front’s ‘u- turns’ stating that “It is surprising that Mr Sata today is telling us not to implement the windfall and variable taxes imposed on the mining companies.
Friday, January 25, 2008: BUDGET SPEECH by the Finance Minister Ngandu Magande
Government will introduce a windfall tax on base metals at a minimum rate of 25 percent and increase mineral royalties to 3 percent from 0.6 percent effective from April 1, 2008.
“For copper, the windfall tax shall be 25 percent at the copper price of $2.50 per pound but below $3.00 per pound, 50 percent … for the next 50 cents increase in price and 75 percent … above $3.50 per pound,”
He said the new taxes were aimed at ensuring Zambia benefited from its vast copper and cobalt mines, the country’s economic lifeblood.
Magande said the new revenue from the copper mines would allow the government to increase investments in education, health and other social sectors.
The biggest problem we have in Zambia today is that we are all experts. In serious economies tax, labour, investment etc experts would have analysed the situation and advised leadership which way to go in the interest of all parties that is Investors and citizens, I think LPM tried that because the same companies did agree to pay. The price is even better today, but lets first wait for the EU crisis to heal.
Correction, Post newspaper of March 19, 2006 should actually read March 19, 2008
Thursday, January 07, 2010
And economic consultant Professor Oliver Saasa has asked the government to quickly revisit its revenue policy for the mining sector as benefits of the recovering copper prices are only accruing to mining companies.
Commenting on the current high copper prices, Prof Saasa predicted a further rise in copper price, saying this would only benefit mining companies at the expense of the country.
Prof Saasa said it was incumbent upon any responsible government to ensure that any benefits that accrued in its most important sectors such as mining benefited the country through improved cash flows into the Treasury.
“This current price places good state those opposing government reluctance to revisit revenue earnings from the mining sector…….”continued…
even this excitement about the high copper prices is only accruing to the mining companies. They are the ones feeling the benefit because with the higher the price, the higher they (mining companies) maximise the profit benefits and very little true accrue to our treasury.”
Musokotwane know very well he was one of the planners who were advocating for the windful tax now that his finance minister his changed goal posts. As much as people will debate and say windful taxes are not necessary in order for the companies to make more and reinvest the truth of the matter is they will reinvest else where unless govt put up a law to this effect.
Well for Musokotwane to talk about the PF supports Chameleon character is not teying to make political mileage its to show the PF what kind of a leader they have. Actually this man also u turned on the constitution when the Catholic church pulled out. We all know Parliament voted unanimously for the NCC then the catholics left and the told SATA who then changed his mind to move out of it.
We need credible people Chipimo…
#10 Eagle, look again at your comment at # 2 and my comment at #5. As for your comment “I am an independent human being and have worked my way up to where I am now – no hand-outs, no b.u.t.t. licking. By the way, yes, I am able to support my family and extended family without groveling at the feet of some political retard”, if you are able to do that, it’s good and that is exactly my point. If it’s of any interest to you, I actually think that it is demeaning to live on handouts, that is why in my blogs I encourage people to stop grovelling and do something for themselves. I have also worked my way up to where I am the hard way, so I know that it can be done, and I am able to help my family and extended relatives. I do not know how you and I compare but that is beside the point.
Oh and by the way, other than not paying taxes, these mining companies have not shared profits with tehir shareholders *FOR YEARS*. From 2007:
UPDATED: 16:13, June 16, 2007
From China’s People’s Daily:
Several Zambian mining joint ventures fail to declare dividends
A total of eight mining joint ventures did not remit dividends to the Zambian government between 2003 and 2005 despite huge profits, local press reported on Saturday.
According to a special report by Zambia’s top auditor Anna Chifungula, the firms that defaulted on dividends declaration are: KonKola Copper Mines (KCM), Mopani Copper Mines (MCM), NFC Africa Mining, Chambeshi and Chibuluma Mines, Cyprus Amax Kansanshi, RAMCOZ and…
(Continued…) and AHC Mining Municipal Services, Daily Mail reported.
The Zambia government owns shares in the eight miners through the Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH), which derives its income from its subsidiaries and associated companies as well as from sales of cobalt/copper.
#26 MrK, do not mislead bloggers by alleging that Dr Musokotwane supported “non-taxation of the mines”. No one said anything about not taxing the mines. The debate among various stakeholders is not about whether the mines should be taxed or not, but about what is the appropriate tax regime. In tonight’s ZNBC programme, “Cultural Remodelling”, Dr Musokotwane ably explained that what has been abandoned is windfall tax based on revenues and why. He also stated that windfall tax is still there but in another form called variable profit tax. Under this tax regime, if copper prices are high so will profits and taxes. He gave a long list of mining countries which use similar regime as Zambia, including Angola, Botswana, Ghana, RSA, Canada. I saw the point.
The teachers, nurses, doctors, children in the village, the youth, road networks, the elderly, the hospitals,the schools, tourism development, farming development, the schools, Zesco roads and infrastructure… they cry out to experience this booming economy for the elite few. You can’t tell people because PF approved abolishing w/fall tax… MMD accept the status quo. That is why MMD were elected to continue Mwanawasa’s policies. Windfall tax was an impressive record on MMD when he was president. IF windfall tax has been scrapped what has replaced it? Why is it’s benefits not being experienced by the masses? The statistics of jobs offered by the mines does not give enough revenue for the country.
#33: The Zambian Economist website has a point counter point on this matter that is non-partisan. This is one site that both the administration and opposition check with from time to time.
#441: I am having a little problem following the argument in your posting. What exactly do you understand by “windfall.” I many have misunderstood you but ‘windfall’ and ‘variable profit tax’ regimes are not structured the same way and therefore do not yield the same result. Yet they are both based on revenue. In any case the administration will want to listen to those who tell them what they want to hear.
It is unfortunate that in Zambia some small businesses are being taken advantage of by the ZRA poop-heads assessing taxes on A/R. Businesses should not pay taxes without revenue.
Musokotwane, don’t worry about what PF said when. By that time their reasoning could have been vaid.
HH is the best person for Zambia. If only we became above the notion of tribal. The problem is that Bembas can never accept a lozi or a Tonga to run this country because they are tribal. Now that Chipimo is bemba there is no problem. This is how we failed to accept Mazoka the man we now wished was the president. The Bembas must change their mind set on tribal then Zambia is headed for development.
41 Katie Good,
” #26 MrK, do not mislead bloggers by alleging that Dr Musokotwane supported “non-taxation of the mines”. No one said anything about not taxing the mines.
First, don’t you dare suggest that I ‘mislead’ bloggers. I know exactly how little taxes have been paid by the mining companies – $50 million projected for the year 2010, when their profits are closer to $2500 million ($2.5 billion) or more. That is an effective tax rate of 2% of profits.
So don’t you, or minister Musokotwane, mislead the people and say ‘but they mines, they are paying taxes’ (to quote minister Musokotwane).
(Continued…) ” He also stated that windfall tax is still there but in another form called variable profit tax. ”
The windfall tax is a tax on *revenues*. The variable profit tax is a tax on ‘profit’. Companies are very much willing to pay that tax, because it is very easy to cheat on. As is evident from their collective tax submission of $50 million, for a $4 billion industry.
So even the Minister of Finance has nothing better to do than talking “Sata Sata Sata Sata Sata”, just like his useless sleeping president
Good contribution MrK . On this particular subject , you are the specialist…….:d/
S.h.i.t….LT.., u’ve put the wrong smiley again..!….:o
This useless gonvt always talks about Sata. Does it mean what ever Sata says whether wrong or right you have to do it? If I am not mistaken Sata did not oppose the windfall tax but some other taxes. Before i speak mountains, I request hon. Situmbeko to release the letter to the public so that we read all its contents and the contex in which it was written. MMD is telling lies coz knowing them , they would have released the letter to the public if Sata indeed said so. But since the letter has a very different pespective, thay have failed to release it to the public. MMD you are useless.
I see there is still no smiley for PF, ba LT pliz, you have MMD [-x and UNIP :)>- and UPND :-h but no BOAT! kapena ni **==
Mr K
=d>=d>=d>=d>
Walasa mudala, best contribution by far
funny thing is these people are not telling us whats wrong with this windfall tax,they are more concerend with what sata said way back,which has no significance to this tax regime. Now we are even being told that windfall tax is another form of variable profit tax…eish.elo lwanya
and by the way fellow bloggers,be carefull how you blog,this site is visited and read by a lot of influential people and if you know that you cannot hide your identity,please avoid attacking personalities.
Mrs Mwanawasa was attacked left right and center,apparently she’s still got a bit of influence in the corridors of power,and one very well known controversial bloger may finish his assignement earlier than he thought
There is a lot of free software on the net,patch up your security on your systems
Just goes to show how a Kaponya party PF is. No policy position on any issues and no document to follow. They just oppose anything based on what they feel. You can’t run a country like that
According to Reuters, Zambia’s maize output has recorded growth of about 42 percent.
LUSAKA, May 22 (Reuters) – Zambia said on Saturday its 2009/10 white maize output rose by 42.1 percent from the previous year, making it the highest crop harvest in about 22 years which will help to maintain low inflation.
Agriculture Minister Peter Daka said the southern African country’s total maize production rose to 2.7 million tonnes, beating last season’s harvest of 1.9 million, to leave the surplus at 1.1 million tonnes.
END EXCERPT
SOURCE: REUTERS
I bet you Mr. Sata will oppose this. We’ll probably see it in tomorrows Post as the Headline.
MrK
I have a question.How much total expenses are incurred in this $4 billion industry which are supposed to be subtracted from the revenues (your windfall tax target) before declaring profits?
Dr.Musokotwane and RB go ahead with good policy judgements. Surely, one does not need to be an economist to accept the fact that policy variation is situational rather than permanent. We can not have concrete fixed policies in a dynamic global capital market-possible. And that a windfall tax on revenue during a the global crisis would simply put the investors’ capital under extereme pressure in a high risk period when prompensity for capital outflow is very high as a result of increased uncertainty/speculation. If I get you correct Dr. Musoskotwane you are simply saying we have windfall taxes on profits and this is in addition to other taxes minning companies are paying; which makes economic sense. RB go ahead we support you continue refuting the misleading statements.
#5, Katie Good, your advice is good, but for me the painful thing is that I have to part away with my hard earned kwacha in the form of taxes, and that money serves mostly to make the lives of useless politicians and their ilk very comfortable while I continue to struggle! Do you have any suggestion how to remedy the situation?
Rio Tinto Says Australia Is Top Sovereign Risk
Published: Sunday, 23 May 2010 | 9:35 PM ET
By: Reuters
Global miner Rio Tinto described Australia as its top sovereign risk on Monday and said it was reviewing all investments there as its raised pressure on Canberra to overhaul its planned new mining tax.
The comments from Rio Tinto, the country’s biggest iron ore producer, helped drive the Australian dollar down against the greenback and the yen by more than 1 percent
, on rising concerns that miners could deliver on their threats to pull investments……………….
“If we are dealing with a, say, two-year extended period of time… in that period, we’d be asking our managers to evaluate it on a worst-case basis,” he said, adding that capital would shift in the…
#58 It is important to have windfall tax because of the uncertainity and flactuation in copper price. As a wise manager you want to tax a percentage of revenue of something that is unpredictable in price. Base the countries long term plans not only on the mining sector …but on stable sectors like farming and tourism using that mining revenue. Please note road and railway needs to be developed asap to facilitate farming and tourism. Zambia has a beautiful landscape, climate and water sources to divert the economy from mining. However , money is needed to develop these ideas…which windfall tax does the trick to raise that revenue.
Sharp Shooter, ” MrK I have a question.How much total expenses are incurred in this $4 billion industry which are supposed to be subtracted from the revenues (your windfall tax target) before declaring profits? ”
It is hard to estimate, because obviously the mines are not honest about either their revenues or their profits. However, I know that they had a turnover of $4 billion in 2004, and that copper prices if anything have gone up, not down. I know that Equinox was making 60% profits of their turnover. I also know that the lucky accident of having gold and uranium finds come with those copper finds is not being fully reported.
Obviously the mines have a large overhead. At the same time, when prices rise on international markets it does not cost them a cent.
(Continued…) Therefore, using Equinox’s known profit margin of 60% years ago, and using a higher copper price and unreported deposits of gold and uranium (and who knows what else) as a backup, I say it is fair to extrapolate Equinox’s known profit margin to the general industry and use the industry’s $4 billion of turnover as a (conservative) starting point, that would give the industry $2.4 billion in profits, most likely much more than that.
Sata is a clown. Period.
Musokotwane should be very careful. These miniers will not leave Zambia. Let’s re-introduce the windfall tax and see if they will go. Instead, Zambia should wrk with Australia and other mining country like OPEC does with oil. We can fix these greedy miners. why should they enjoy copper money while our people wallow in poverty.
#45 MMD you have a big probalem. I think you are a tribalist. You may even have an inferiority complex.
Tribalists always think other people are like them. I am Bemba and my family voted for Mazoka in Lusaka because he was the best candidate to take zambia forward. If you Tongas still dont appreciate that, then why should non-Tongas vote for a Tonga again. My friend learn to appreciate the goodwill of people. You have nothing to gain from being a Tonga tribalist. We are One Zambia One Nation.
Exactly a year ago today then Home Affairs Minister Ronnie Shikapwasha said the government would arrest former President Chiluba for revealing the existence of the State House tunnels. I wonder what he is saying today about Chiluba. Is he now singing his praises? Politicians! Perhaps the government is still investigating……
It is folly for you people to fault Mr. Sata for the failures of this government. One question you have to ask your selves is, What are the prevailing conditions today as compared to then? Probably you are failing to appreciate that economics like politics, is not determined only by what happened seven years ago. You move as the time dictates. How many of you have remained the same since the statement was made in whatever year it was made? Conditions have changed. Probably we have forgotten that at that time, it was not profitable to invest in Zambia as by then copper was not as on demand as it is today. How was the demand then as compared to date? This minister is displaying total ignorance of the supply and demand of the same copper. Probably the chinese are paying the windfall tax
but knowing the Banda government and its corruption, the money instead of putting it were it belongs is going into their pockets. This is an issue that needs no debate. They know that the Zambian government is grossly making a huge loss on the failure to capture the taxes reasonable to sustain our development and the economy. Why not do the right thing? So, what Musokotwane is saying is that they run this government according to what Sata said some years ago? What kind of foolishness is that? When did these dolts ever listen to the opposition? So, what you MMD cadres are saying is that you go by what Sata said instead of doing the right thing? What kind of foolishness is that? Ok, Sata has now seen the need to change our tax policy, when will you change the policy?
#68, Well of course I would not like a government that I voted into office to change policy at the whims of inconsistent chameleon-like politicians. As for Banda putting money into his pockets, have you got proof? Where did you get your information, from a borrowed copy of the Post?
# 69. Katie, I really don’t know if I should add GOOD to your name. Don’t you think the question you asking me needs to be asked to the people in office? How about asking them where the money goes while the hospitals go without medicines, schools go without materials, roads are never repaired or constructed. How about asking yourself where the money goes when they go around preaching that the economy is booming? How about asking your Shikapwasha were he got the economic training that uses traffic jam as the gauge for economic growth? Guys, ala sometimes listening and using your brains can be prudent. You have been posting everyday, don’t you think you need time to think.
SATA is never a serious person. He is not a principled man. First he never sticks to his word, he will only make populist statements to suit what poeple want to hear as at that time, If it means being tribalistic he will do that. Where on earth can somebody serious enough say he will find solutions for the country in 90 days, If it took GOD 7 days to creat the earth and the universy how can SATA a son of a sinner and a sinner himself claim that he can solve our economic crisis in 90 days.
Zambians lets be serious,
its amazing how much information and ignorance reside in zambia. Most of the comments made by men and women above, though not all on the same side of the coin, make sense.Been a teen I was fairly ignorant of the extent to which these mining regimes affect us as zambians. There is nothing I could say that you don’t already know however I would appeal to you to use whatever information you have to help build our country. We can all speak but if no one does anything then what is the point?
You could certainly see your skills in the work you write. The arena hopes for even more passionate writers like you who aren’t afraid to say how they believe. At all times go after your heart.