Government has suspended the 10-per cent duty which was slapped on the export of unprocessed copper and several other minerals in raw forms for one year.
Finance minister Alexander Chikwanda suspended the tax which had caused an outcry among the mining houses in the country which complained of limited treatment facilities locally.
Through Statutory Instrument (SI) number 89 of 2014, Mr Chikwanda suspended the export duty on a catalogue of mineral ores and concentrates from October 4 2013 to September 30 2014.
The government last year introduced the duty, which was aimed at curbing the export of unprocessed minerals.
“The export duty on the goods listed in the schedule is suspended to free. The regulations shall cease to have effect on September 30 2014,” partly reads the SI which was published in the Government Gazette dated October 4 2013.
According to the SI the affected items include ores, concentrates and other substances containing copper, iron, nickel, cobalt, aluminum, lead zinc, tin, chromium, tungsten, uranium, silver and several others.
The lifting of the duty by the government would enable the mining firms which have surplus stocks of unprocessed copper and other minerals to release them for processing outside the country.
Several mining companies, particularly First Quantum Minerals (FQM)’s Kansanshi mine in Solwezi, have complained against the duty.
Last month, the largest copper producing mine in the country said it was being choked by stockpiles of unprocessed concentrates due to inadequate treatment facilities in the country.
The firm had stockpiled about 75,000 tonnes of unprocessed copper concentrate worth around $133 million, which it could not export due to the 10 per cent levy on unprocessed mineral exports.
Kansanshi sends its concentrates for treatment to Konkola Copper Mines (KCM)’s Nchanga Smelter and the Chinese-owned Chambishi Copper Smelter.
Early this week Mines, Energy and Water Development Deputy Minister Richard Musukwa, said Lubambe Copper Mines and Konoco Copper Mine in Chililabombwe had also formally lodged in complaints on the high cost of exporting raw copper due to the levy.
He said the two firms wrote to Government proposing that the levy on unprocessed mineral exports should be waived because local smelters are not able to process some forms of copper concentrates.
While affecting the revenue collection, the move by the government to lift the duty comes as a huge relief to country’s mine houses which, like others elsewhere, have been grappling with the effects of the low copper prices on the international market.
Some Zambian mining companies have been in talks with the government seeking tax waivers and incentives, to help offset the drop in prices of copper.
Minerals are a wasting resource and part of the policy imperative of taxing this sector highly is to provide, with proper investment, alternative productive economic capacity or even a soverign fund for inter generational equity. The caving in of PF on this matter is highly disappointing. Please look at what Australia is doing to extract the most from what is appropriately called the extractive industry.
I voted for lower taxes but government needs revenues to run the country ie. pay our men in uniform, run schools, hospitals and provide better infrastructure. Where is tax equity if you continue to tax an employee at over 30% and leave the mines who because of development agreements wont pay taxes until we dont know when.
the mines should use this period of suspension to prove and show that they are ready and willing to invest in processing plants.
after the one year moratorium, there should be no excuses of any kind once the tax is reapplied.
I wish such suspensions could be applied on workers as well
We have given these mines more concessions than they deserve.
What a joke 🙁
at the end of the day, the question should be:-
HOW MUCH ARE WE BENEFITING FROM OUR MINERALS? period.
i feel like apprehending all those connected to the selling of our natural resources.
whats wrong with you ba lt?
you have now started moderating questions.
yaba!
It is unfair for the mines to use the goodwill of the respected Mr Chikwanda, who was a director at two mines or related ventures. Who will cover the hole that has been punched in the resource envelop thereby reducing the fiscal space which is the budgetary room that allows a government to provide resources for a desired purpose without any prejudice to the sustainability of a government’s financial position?
Ba mine owners, be fair on the Zambia people. Ba PF dont cave in to these transnational corporations as you have the support of the IMF and World Bank on this one. Also me, I support you on this one; tax the mines!!!
“the respected Mr Chikwanda”
it is a joke, isn’t it ?!
This is a slap in the faces of many Zambians. Is this to say mining companies in this country have to much power. We put this government in power but they never listen to us,the mines cry once and everything is done at once. People of Zambia what have we done?
The complaint from the mines is logical. The best the Govnmnt should have done was to find an investor in copper processing…since they couldnt, it’s just logical to allow the Mines go out at no cost. Where were they going to process those tones from in Zambia?? No enough technology around. Dont comment if u r not a miner. THATS Y SOME MINES ARE FAILING IN THEIR OPERATIONS COZ THE COPPER THEY DUG IS STILL STOCKPILED.
Capitalist are focused, the aim for maximum profits and they earn that 10%. Bang, its on their side. Govt has lost it. Why stock pile the concentrates deliberately just avoiding to pay 10%? Now that they cried too much with crocodile tiers coming out, they are glad govt has blinked and let go the 10%. What next? Well, they will now export far to much concentrates and earn far too much for themselves. Even the ‘capitalist’ China will haul the concentrates enmasse! Loser Zambia, going for loans whilst loosing carelessly what they have in their hands! 49 years of independence, yet we can’t sell copper from our own prrmises in Zambia unless we send it abroad. Why can’t we let buyers of copper buy it from here?
well said Chitalu. if one is to scrutinize this you will find PF benefiting from the mines. how then can Zambia develop with such?
Armtwisting by the mines will never end!
The idea of taxing unprocessed copper exports was not a bad one at all. Even if the local smelters are not able to process some forms of the copper concentrates, it is still better to stockpile it in Zambia than send it out of the country unprocessed. Copper is an indispensable material in almost all industries – building, energy, motor-vehicle manufacturing etc. The world knows that there is copper in Zambia. If they don’t come for it today, they will surely come for it tomorrow.
NAY……
This means we pay more in terms of Pay As You Earn Tax to enhance govt revenue. Instead of broadening the tax base we shrink it! I pity the Zambian worker.
I just don`t get it why mines should export unprocessed copper in the first place.Does this explain why the smelter section in mines is one of the departments where a lot of workers have been laid off in most of the big mines in Zambia ? No wonder i`m not a fan of these big mines in Zambia because of their extreme capitalist idiologies.These guys always try to push government into a corner just to make a few more million dollars.
Due to the high cost of doing business in Zambia,they prefer smelting our copper in SouthAfrica.They also have obligations to create employment by smelting our copper there while our chambeshi metals lays off workers due to reduced business or costly business environment,,Only Govt can intervene,the decision taken is unfortunate hope they revisit the decision.
what these mines and govt deliberately dont bring out here is how they acconunt for the so called ‘trace minerals'(silver, cobalt,gold etc)which are ever present in this unprocessed copper or blister copper and concetrates as it known in the mining industry.who gets the proceeds from these trace minerals.in chile these same mining houses dont dare export blister copper or concentrates,why are they being allowed to doit here.
this is a total rip off.either these same politicians are getting these proceeds directly into their pockets or these mining house have seen their weakness.the price of copper has never been higher or atleast we dont expect it to get much higher.wake up zambia whats wrong with this chikwanda character kanshi.from there you go and borrow 40million usd you are…
And these mines still enjoy developmental agreements, lower discounted electricity tariffs and other concessions agreed 15 years ago, when the price of copper was rock bottom. This is a gov’t for miners always bending backwards to every demand by these miners, always being blackmailed.
We deserve better than these fossil politicians, we need savvy young politicans who have the interests of it people at heart like they have in Chile.
true leadership means standing on a firm ground when it comes to decision making. What this PF govt is doing is unacceptable. One day you say this and the next day you do the opposite, please research and consult widely before acting. How do you expect business houses to respect your next decision in this fashion of running national affairs? Please show true leadership for once, na chala amuchileke.
This is a good decision in that we have DRC Congo our sleeping giant and the latest discovery of copper deposit in Botswana. The benefits are colossal than 10 percent tax, we have investors coming every other day into the mining industry.
One of the benefits for better environment is the big investment on Kalumbila mine by FQM, due to bad business decisions by our brothers and sisters in DRC Congo.
Poor finishers. The grey matter in this team of sata is long expired. How else can we explain trying to drive a bedford in 2013 as finance minister when his time as local government minister in 1974 was marred by corruption? Apollo investment sakala
….disaster in its real meaning…..this does not require a rocket scientist to see how the govt has failed Zambians………am sure negotiators for the mines are smiling all the way to the bank……they are tossing wine glasses and telling the directors that ..’we told you that the govt will easily fall for it’…..with such stance exhibited by our leaders/negotiators …..forget about attaining economic independence in the next 100 million years…..if one has to dig deeper…2 or 3% of that 10% is now ending up in private individual’s foreign accouts…….even the little concentrates which was processed in Zed will find its way out ……starving local smelters….and resulting in redundancies….concentrates will be declared as copper instead of GOLD…..
Government should also do away with the 0.2% tax on money transfer service even before they implement it. Why should I be taxed for sending money to my son/niece/nephew at school? someone make me understand this.
The should be a way round this …how do you transfer money?
This is a f00lish decision!!! The mines are evading tax already. Now u reward them by waiving the little they have to pay!
And we wonder why we are poor…try mining in the UK!!
This is subsidising the mines at the expense of Zambians. This govt is so shameless to reward and enrich the mines in this way after withdrawing subsidies meant for poor Zambians.
This PF government is made up of gullible people. It is busy dancing to the tune of investors. What a bunch of jokers!!!!!!!
Will the mining companies suspend Tax fraud, unjustified huge cash cost, embezzlement ???
of course not…
@Jay jay..am impressed by your objective contribution today,,when PF took govt i personally I thought they would target mines get back even at least 15% shares in all mines,it should have given them the required cash and the monitoring capacity hence avoid mines cheating production figures to avoid tax.now even the only corrective measure of ensuring processing locally is being postponed !.Mr sata see what your friend Mugabe has done to both empower locals and the Govt..get Technocrates to come up with methodologies of locals benefiting from this wasting asset,please My president…
Why not reduce the tax to say 5%?
That’s why the opposition was saying something is smelling on this backtrack.It should have come to at least 7% not delaying completely for a year they will have moved all the raw minerals for storage in S.A, Govt represent the poor and not yourselves.