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Alba Iulia
Monday, August 10, 2020

Some Mining companies seeking tax relief from Government

Economy Some Mining companies seeking tax relief from Government

zra

SOME mining companies on the Copperbelt have appealed to Government to consider exempting them from paying certain taxes to enable them recover from the high production costs they are incurring due to the fallen copper prices at the London Stock Exchange.

Sino Metals Leach Zambia Limited, NFC Africa Mining and Luanshya Copper Mines (LCM) say they are making losses due to the high production costs they are incurring.

The three mines made the appeal when Minister of Mines, Energy and Water Development Christopher Yaluma visited their premises to familiarise himself with the challenges they are facing.

Sino Metals chief executive officer Xie Kaishou said his company has exhausted all resources from the tailings dam and that copper production has dropped drastically.

“Last year, our copper production dropped from 7,000 to 5,000 tonnes due to lack of resources. This year, production is expected to drop by 4,000 tonnes. We are really operating at a loss,” Mr Xie said.

He said with the increase in copper prices at the London Stock Exchange, the company is struggling to meet high production costs.

Mr Xie, however, assured Government that all the jobs for the local people will be protected despite the numerous challenges the company is facing.

He also said Sino Metals plans to invest about US$70 million into the Mwambashi Mine Project which will create 600 jobs for the local people and extend the mine’s lifespan to seven years.

Meanwhile, LCM chief executive officer Luo Xingeng said the lifespan of Baluba Mine is expected to finish in the next four years due to limited resources.

Mr Luo said Baluba Mine is important because it is the largest employer in Luanshya with more than 3,000 people working at the mine.

“We are appealing to you the Government to exempt us from paying certain taxes, we are operating at a loss. The Baluba Mine only has a life span of four years,” he said.

And Mr Yaluma assured the mining companies of continued Government’s support in addressing some of the challenges they are facing.

He, however, urged the mines to anticipate challenges such as low copper prices on the London Stock Exchange when doing their business plans to maintain their cash flow.

“Wherever we have been, mining houses are complaining about high production costs. We as Government, we are here to listen to your problems, engage us so that we can see how we may help you.

“However, it is important that you forecast challenges of low copper prices when doing your business plans,” Mr Yaluma said.

He said Government is not rigid and will endeavour to create policies that will help investors to grow their businesses and create job opportunities for the local people.

18 COMMENTS

  1. Copper prices are up again exemption for what you make a lot of money while pay a song to the land what will zambians benefit from the polution you cause in those towns

  2. pack your bags and go. we are also finding it difficult without subsidies and have you heard us complain? you bought these mines when copper price was extremely low meaning your projections were based on a much lower price than it is today. go to hell *****s!!!

  3. Funny how its only the chinese mines crying foul over taxes when in actual fact they are the worst when in comes to renumeration to their employees? I smell a. Rat and trust me that’s just how cartels are formed, they can’t all claim high taxes at the same time…..

  4. utu tumachoncholi atase…
    let them o to hell.
    by the way, why are people not commenting on this important issue the way they comment on anything to do with pf?

    • Zambians just like politicking that is why very few can comment on such topics. We also have people who have been to school but can not discuss issues intelligently without any political bias.

    • @Spartan and Mature. You will also notice that the trolls from ZWD that have now invaded LT will not comment on such serious issues, but check how they are spewing their useless comments on political topics which will not improve Zambian livelihoods.

  5. I have little symphathy for most of these, if not all, foreign owned mining companies. They always mention “employment” opportunities for the local people when they are faced with Govt officials but lets look beyond the vile and see what job opportunities they talk about. Let’s see how they treat these local employees, let’s see who accesses the real business opportunities at the operations. When that is unveiled we shall see where the begging bow showed be put. It’s ironic that you see so many south Africans enjoying business opportunities at our mines. So many Indians at KCM and so many chinese at Chinese owned. We Zambian, with the exception of a few connected ones, just jostle about chasing the odd deal pushed by the the equally desperate buyer.

  6. When copper prices are high they don’t want windfall tax and when the drop they want us all to feel the pinch together. They are taking us for granted only in Zambia.

  7. Awe takuli ifyo iyoo! Government, dont even think about it, they should pay the right fee, kakuli lipilenifye bane!

  8. @ mature

    it was 01 am here, so you wanted me to wake up and coment?

    coming to the issue at hand.these chinese infesters never employ local people on a permant basis they are all casual workers and they a mosquito share called monthly salaries.

  9. LT please… ” He said the increase in copper prices at the London Stock Exchange, the company is struggling to meet high production costs ”
    This statement makes the whole article useless! Business trained people should cover business forums and write articles on anything to do with economics instead of passing the buck to scribes who do not understand the business laws of supply and demand.
    What happened to the old fashioned Reporter, who used to research and edit the story before printing? Anyway the editor of the site can do better!

  10. Guys, this is a smoke screen, contrived to deceive GRZ of revenue. I’ve studied Nampundwe Mine from which copper can be produced. Luanshya surface waste from which copper was produced in 2006 and Akatiti Dam which contains copper, ready for leaching. All three ventures are viable at a highly depressed copper price of $3,500 per tonne. My interactive spreadsheets are available for perusal. Please write to mining dot brenda at yahoo dot com.

  11. Theses chaps should be TOLD – IT IS BUSINESS, IF YOU CAN’T HANDLE IT, FOLD UP Or SELL UP & LEAVE!!! The Zambian Tax Payer is NOT A CHARITABLE ORGANISATION!!!!

  12. Read the annual report and accounts of kcm on the net,they say their production cost is 5000dollars per tonne.the current lme price is close to 7000 dollars per tonne giving a gross profit of close to 2000 dollars per tone. How can 40 per cent gross turn to a loss after shiping costs? They want to take GRZ for a ride.as for the chinese,profitability was based on the amount of copper tailings,so they must buy ore from small scale miners,it is econowies of scale bwana chinese!

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