FIRST-QUANTUM Minerals (FQM) has said it has on average been paying US$1.5 million per day in taxes and justified Government’s removal of the windfall tax.
FQM says calls from some quarters for the re-introduction of windfall tax were not justifiable because the current tax arrangement was suitable and ensured growth in the mining sector.
FQM resident director Kwalela Lamaswala said in Lusaka that the mining company has since 2007 paid $1 billion (about K5 trillion) in taxes to Government from its production of copper at Kansanshi Mine in North-Western Province.
Mr Lamaswala said in addition, the company is expected to pay a further $374 million in tax before June 2011 this year.
“Before end of June Kansanshi will contribute $347 million in taxes to Government and that is about $1.5 million in taxes pay day and this is not like in the pre-privatisation-era where Government was subsidising ZCCM to a tune of $1 million per day,” he said.
He said that the windfall tax was a discriminating tax and not helpful to mining companies that were already contributing to Government coffers and reinvesting in operations and expansions.
Mining firms pay variable profit tax at 15 per cent, mineral royalties at three per cent in addition to the corporate tax of 30 per cent.
Mr Lamaswala said that mining in Zambia had evolved to great profitability from the huge losses under the Zambia Consolidated Copper Mines (ZCCM) and that the new mines should be supported and not strained.
He said when Kansanshi Mine was being established in 2005, Government gave it a six-year relief from taxes until it reached profitability levels within 18 months and started paying tax in 2007.
Mr Lamasala said Kansanshi, which is one of Africa’s biggest mines, endured the lowest ever copper prices during its start up and when the copper prices started rising, it was able to break even and started posting profits and begun to pay taxes.
He said from the profits, 40 per cent of the figures went into re-investment which includes upgrading and expansion, with one being the extra production of 220,000 tonnes of copper per year at the mine.
And FQM president Clive Newall said windfall tax did not only affect the large-scale mines but also smaller ones, as it brought limitation to expansions and reinvestment.
He said FQM had been in Zambia since 1996 and has been contributing to the growth of the Zambian economy.
[Times of Zambia]
Windfall Tax is critical as it deals with the abnormal revenues which Zambia requires to become a nation with good infrastructure for her people. The amount that is being mentioned is peanuts compared to what these guys are making with these history making copper prices.
Even if it was a mbeba that owned the mines, it would want to rip as much profits as possible. Given a choice these mines owners would not pay a penny to govt.
in the 90s, the dark ages of our great Party, the MMD govt used to go to Paris club and borrow about $300m to finance Govt’s of $650m budget. Today because of the hard road undertaken by the MMD Govt, One company and I repeat One company is able to pay the amount we used to go a borrow, as taxes.
It has been a long road and finally money has started coming. Oh no , it did not take 90 days to deliver this. Oh no, it did not take 90 days to privatize the mines, Oh no, it it not take 90 days for these mines to dig copper in the ground and sell it, Oh no, it did not take 90 days for FQM to pay $1bn in taxes. It has take time and we thank the patience of the Zambians citizens who should start seeing rewards..to be continued..
#from 3, Zambian citizens have started seeing the rewards of their patience. True wealth takes time to build and as Zambia, we are now truly on our way to greatness. New Hospitals are going up in every district, new schools being built, new roads are being built, old roads are being repaired, the young are being empowered through CEE and many government programs, Quality sports infrastructure is being built, small farmers support that had enabled record bumper harvest has been ratcheted up. New bridges are being built. Telecommunications is becoming great and it has never been this cheap to make international calls, National reserves are at record high, inflations tamed, Kwacha stabilized..I could go on, but due to limited space I end here. 2011 vote RB and MMD
That man Lamaswala should not compare ZCCM era to present economic landscape. What I know is one of the beneficieries of that time. Well if Kansanshi is going to pay such type of money then they are making a kill and should pay taxes accordingly. Given the poor state of infrastructure in Solwezi and the Chingola/Solwezi road a 10% levy from such a huge amount will go a long way in development of Solwezi. After that mineral reserves are exhausted those guys will park their bags and go back to Canada and what will be left will be big holes inthe ground and the rest shall be history. If one investor is paying that kind of money in taxes than what is the story with KCM since its operations are much larger than Kansanshi whats the story. Someone pa Zed could be chewing dollars with the kuries.
in the 90s, the dark ages of our great Party, the MMD govt used to go to Paris club and borrow about $300m to finance Govt’s of $650m budget. Today because of the hard road undertaken by the MMD Govt, One company and I repeat One company is able to pay the amount we used to go a borrow, as taxes.
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K 16.7 trillion (about US$3.55 billion) budget for the year 2010 compoaring this to the drivel you just posted it means Zambia would have borrowed over (K1.5 billion) from Paris club,,,, so which company is paying this amount which we could have borrowed from Paris Club.
Thats a blatant lie,,try to analyse,think and do a bit of reading before posting,you are embarrasing yourself man
The opening of new mine in Chief Musele’s Solwezi is most welcome but FQM President Clive Newall should not bring his comapny’s underhand methods used in Congo DR which lead to their being kicked out of the Kamoto Mining in Solwezi. We hope this time around they will be more transparent in their dealings. THe company should be tasked to invest in the community. That area needs a tredes school, upgrading the clinics, schools and water and sanitation including farming skills. I dont know how Lumwana Mine considered only Chiefs Mumema and Mukumbi as beneficiaries. Now its Chief Musele alone? Next there will be a Hydro Power Project on. Former RDA camp will be ideal for a trades school to benefit the locals. GRZ should look into this bukiji bukiji. Time has come to gain from our resources.
This is good news! As ZRA this sounds good. Targets can be met with this kind of money. Thank God! People are beginning to reason.
#3 MM CHIEFBOOTLICKER WELL SAID CANT ADD MORE. YOU HAVE REMEMBERED THE PARIS CLUB VERY WELL. WE SHALL PUT THE MONEY TO GOOD USE SO THAT THE ORDINARY CITIZEN ALSO HAS A SHARE OF NATIONAL CAKE.
MMD government for economical transformation insults and lies.Well done RB in the shortest time of your rule.ZRA please no stealing mwapya!
#10 correction, should read ….no insults and lies.
Mines still have to pay more taxes to benefit local communities. copper is a wasting asset and the price fluctuates like a pendulum. so when the price is good we need to benefit as Zambians. like already said when the ore body is exhausted like in nchanga UG and open pits, we will only remain with huge holes in the ground and these ‘infestors’ will peacefully walk away and go and invest somewhere else. they are here not coz they love this nation, NO! but due to the copper which we have. slap some more tax and they will not run away coz they are doing a killing right now. wake up MMD and RB and musokotwane…….time to pamper these investors is gone.
FQM should stop patronising us,unless one has a simplistic mind to see and realise that we are being fed crumbs from the copper boom.windfall tax is a must,,even the bible says give what belongs to ceaser,the copper belongs to Zambia,these so called investors did not come here to do us a favour,this is business and we have to protect our interests and benefits.
$2.5 billion dollars a day in taxes will be more like it not the $1.5 b mr Lamaswala seems to be impressed about,its day light robbery,
Under a normal govt with correct leadership skills by now roads,schools,hospitals and other essential structures shouldn’t even have been an issue,those should have been a normal govt operations.
Fair enough the sell out told us how much tax they are paying per month but forgot to say how much they are making per day.
# 6 Smoothcrimanal walasa,that MMD Chief Bumlicker has been caught displaying ignorance about the Paris Club.
#3 and 4 chief bootlicker I think you are not in touch with reality. Tell me how many of the projects that government is undertaking right now are funded from local resources? New sports infrustructure is from chinese loans. New hospitals is from loans. Roads rehabilitation is Japanese nkhongole, Roads under ROADSIP is World Bank nkhongole. Everyday all we hear about the Finance Minister signing loans its more like he is a borrowing minister. It’s either these FQM people are telling lies or we have an incompetent govt in place. I think in Kaunda’s day you will agree to the infrastructure that the money from ZCCM built. It built the copperbelt, Lusaka, Central, eastern, western, northen, north western, southern and Luapula provinces.
Where will this money be used?
Can some tell me what is the difference between getting loans from the Chinese and Paris Club? One blogger is trying to tell us that we are now funding some projects with taxes from the mines. Then why is the President and his Finance Minister getting loans from Chinese day and night if we have enough revenue? Mr. cadre (in Pretoria) you are a very reasonable man who should not think with his belly. Sowezi is basically a village but we have mines there making billions of dollars.
Pa Zed there are to many plunderers than planners. We hero worshiping wrong doers. Thse so called investors wer kicked out of Congo DR coz of being crooked and they have found a huge welcome in Zambia. You cannot teach an old dog new tricks. Thes FQM guys will even under declare their revenue more than they did in Congo Dr. There is more revenue from Gold at Kansanshi mine than from copper and the so called headless leaders are sleeping why national resources are being plundered. Look at roads they are beinmg damaged every day abnormal trucks hauling copper from Congo and Copperbelt and the Railway Syt\stems of Zambia and Tazara are being under utilised. These guys have conspired to ensure that they reap maximum profits from sleepy Zambia. you dont need someone from heaven to wake us up.
Bootliker,why is your government keeping money in reserves when as a country you need resources to put up modern infrastructure like hydro power,markets good houses for the pipo which can be used as a business by government under National Housing authority.That money wont achieve anything tangible for the pipo to see coz the money will be used up in the forthcoming elections.What big infrastructure has MMD built in Zambia without external assistance?please tell me after looking around the country.all the so-called projects in zambia,none is fully govt funded yet as a country we have foreign reserve to the tune of approxmately$2m.Does it make sense?COMMON SENSE.
#18 and 19 thumbs up to you^:)^^:)^ . How can we rejoice about mines in Solwezi when the town remains a village. People thought it would become like Lsk but they forget. Its not the responsibility of the mine owners to deveop Solwezi hence they will never do anything. Our boma needs to wake up. Or maybe its the people who have to wake up. The Egyptians have woken up. You cant be held to suffer by a minority of people. Just because they don’t like development don’t we all don’t. Elo ba FQM are typical capitalists and will pay huge money to any Zambian who champions there cause.
We need to also consider how much investment these firms have put in and probably what value we feel FDI brings to our economy> My fear is this argument is to emotional, pipo are not puting exact requirements fron the forieighn investors but simply saying its not enough without saying whats amount constitutes enough
Zambia one,# 21 the objective of business like FQM is to make profits> this entails cost minimisation and revenue maximisation.
Its not their job to build cities> that is for government. I tend to think that we have set very high expectation without critically looking at the situtation. Even if pipo rise today, how will that improve their welfare, we could risk going to the great ZCCM days when the mines were busy providing social services at the expense of mining> As a result mines became loss making and there was no re investment. There is need to strike a balance here and not be emotional>
it seems what will be satisfying for many is when business are taxed so much that th either are ground or never expand. the call for windfall tax or higher taxes is done to reward chaps that are not working hard or innovative and it punitive action on the hard workers. all those advocating for windfall tax do so not because the investors in the mines are foreigners but because they see themselves as workers in a socialist system. our tax system needs to be one that reward innovation and hard work so that many of us should be setting up businesses. the current taxes regimen is not perfect but very good as it is pro business and production.
I feel this payment is substantial and a decent Govt. could do a lot for its people with this kind of money. Why I say so is because of simple logic, if for the 220,000 metric tonnes we took an average global price USD7,000 per tonne, we get total of USD1.5bn, take out operation costs which can not be below USD500m, you find that taxes paid are around 30% of profits. What we need for meaningful development, are more FQMs and a responsible Govt. Thumbs up FQM, its now KCM’s , Mopani and Chinese investors’ turn to declare what they paid as tax.
PROVE IT !!!
We don’t believe any report of the criminals……
What i know i that all my family has been stolen by FQM nickel australia and all the proofs are at the international court….
TOO BAD and TOO LATE
yes they have to prove it .the money they are talking about it will go in the accounts of the politicians ,besides Phillip pascal and his counterparts are rely criminals of humanity all over the world in Congo Dr,Zambia,Peru, Australia Mauritania and Finland even the international community they are aware with this .
we totally know that they invest with dubious means where ever they go that is why the have been chased from Congo.
this is publicity versus reality and the truth will be established .
thank you criminals of humanity and sodomizes
#25 Uwakwisano
Iam with you.You are spot and void of armchair criticism
all this to me seems to be nonses. the average monthly production of finished copper at the said mine is less than $20 000 tonnes meaning the cash flow per month assuming all the copper is sold is 180million before any deductions of any kind. now coperate tax is 35% plus royalt of 0.3% i guess and this must be calculated before after operating cost etc. numbers dont really seem to add up really