9.5 C
Alba Iulia
Monday, September 28, 2020

UPND Statement on KCM: The KCM Debacle and Taxation of the Mining Sector

Economy UPND Statement on KCM: The KCM Debacle and Taxation of the Mining...

The KCM Debacle and Taxation of the Mining Sector

In the past week we were treated to a shock revelation by Anil Agarwal the Chairman for Vedanta, how his company is making an annual average of USD500 million from its Zambian subsidiary, Konkola Copper Mines (KCM). The reaction of many Zambians to this revelation is that of shock and anger. And rightly so! It is beyond belief that such a huge amount of money can be made with little or no benefit to the country whose poverty levels stand at over 60%.

For us the scandal is not in selling KCM at USD25 million. Those charged with the responsibility of disposing of the asset may argue and even prove that, at the time that was the best price they could get. The price of copper was very low then, with copper trading at USD1,500 a ton compared to the 70’s where copper was trading at USD4,800 a ton. The copper prices remained depressed until 2005 when the world copper prices started rebounding, by 2011, Copper was selling at over USD8,000 a ton. Be mindful that average copper production costs are about USD4,900 a ton.

UPND would like to urge the PF Government to take immediate steps that will address concerns of the stake holders, if Zambia is to get any meaningful benefits from the exploitation of our country’s mineral resources. The scandal is not words coming from KCM owner, the scandal is in government’s failure to benefit from the high copper prices that have been prevailing since around 2006 despite that being a campaign promise. The Mwanawasa administration was able to bring in USD480 million in one fiscal year at the introduction of windfall tax. When Mwanawasa and Magande were collecting the USD480 million, we were producing less than 600,000 metric tons of copper per annum. The mines are projecting to hit one million tons a year by 2015, which means Zambia could easily get USD1billion if we reintroduced windfall tax from the mines.

There is need for the PF Government to increase an understanding of how best to deal with mining corporations using blackmail and deceit in covering up costs of mining projects and equipment that are brought into the country resulting in mining corporations not paying anything to government by exaggerating costs. We need to do a lot of work in strengthening the Ministry of Mines which lacks the capacity to adequately supervise the exploitation of the country’s mineral resources.

The mines need well trained and highly experienced engineers and economists who are able to interpret feasibility studies of these Mining Companies. This experience is needed to analyze and bring out issues which will benefit the country. The Zambia Revenue Authority must also monitor these mining projects and equipment brought into the country to avoid losing revenue through the so called hidden costs. Our vision as UPND is to create capacities in the local industries to ensure that local companies are able to supply quality goods and services to the mines.

We therefore, urge Government to consider the introduction of the windfall tax to address the ever rising youth unemployment in the country instead of engaging in rampart borrowing to cover for Government inadequacies of addressing the economy which is currently in I.C.U (Intensive Care Unit) going by the raising cost of living.

Edwin Lifwekelo
UNPD Deputy Spokesperson

11 COMMENTS

    • At least you have told them the truth. But they wont listen because PF has made a secret deal with KCM owners to make sure that KCM pays money to Sata and his cronies to stop them from introducing windfall tax.
      Its shocking that up to now the government is silent on what to do with KCM in order to address the tax evasion strategy used by KCM.
      Windfall tax is the way forward. If Mwanawasa raised $480 million, Sata can raise 3 times that and avoid too much borrowing. Now understand what a genius Mwanawasa was. He sold the mines cheap but was getting back the shortfall money from the mine buyers indirectly. From that revenue he avoided excessive borrowing and strengthened and stabilised the kwacha and the economy.

      Ukwa chose to be funded by KCM at el in exchange for windfall tax…

    • You pathetic Wnzelu, just because Mwanawasa was part of bantubotatwe, he is a genius. If it was Sata who sold the mines at that price you would have called him names. You pathetic tribalist. Get a life. To anything that comes from seemingly bantubotatwe, it is good. You are worse than a lunatic. You are piling blames on Sata who was not there during the sale of a mine at a song. When Mwanawasa was there in power you opposed him. You are just s lost imbecile who can’t think beyond your nose. In all your life you think HH, drink HH, dream HH. How absurd and pathetic. No forward intelligence. Stuck in your mind. How does it feel to be stagnant in thought and intelligence Wnzelu?

    • As long as it is coming from the bantubotatwe, it is fine. If it was Sata who sold the mines at a song, you the same cursed chaps would have called him names. Everybody can see your hatred for Sata and bembas. You are pathetic and a lunatic. But despite that the bible tells me yo love our enemies. You will just die of heart attack. If you have good to say to some just shut up ( Lucky Dube). You, Jay jay, dudelove are but some of the pathetic id.iots who are have bent your necks to hate. It is just hatred against the president even if he does good. You are the same chaps who condemned Sata when he repossessed ZAMTEL. Look at ZAMTEL now, going very fine.

  1. ” The price of copper was very low then, with copper trading at USD1,500 a ton ”

    Actually closer to $2000, around which it had been for decades. They could have been temporarily closed and the miners otherwise employed.

    ” compared to the 70’s where copper was trading at USD4,800 a ton. The copper prices remained depressed until 2005 when the world copper prices started rebounding, by 2011, Copper was selling at over USD8,000 a ton. Be mindful that average copper production costs are about USD4,900 a ton. ”

    Mind you, you didn’t provide a source for that.

  2. ” Be mindful that average copper production costs are about USD4,900 a ton. ”

    Nonsense. You are either shilling for the mines, or taking their data as the truth.

    In the year 2011, Cash Cost per Pound was:

    KCM: $0,90 ($1984/tonne)
    Konkola: $1,00 ($2204/tonne)
    Katanga Mining: $1,69 ($3725/tonne)

    Source: Boursorama; Katanga Mining public report

    Just search any mining report for the phrase “cash cost”

  3. Rubbish! Copper price had doubled to 2950 to 3000 usd in oct/November 2004 when KCM deal was inked. In fact KCM was NOT relying on govt treasury for survival, t was making a profit and had 60mUSD in its bank accounts. All that was need was capital to develop Konkola deep which it has funded through internally generated funds so what was the point of selling! STUPID POLITICIANS!!!

  4. And UPND scores an own goal! Lifwenkulo attempted to clear the ball off the line after MMD had been culpable for a bad back pass. U can’t dress this up other than fraud. Find out everyone who was near this deal and make them pay! Including their families who are still profiting from this scam and others

  5. Please UPND, you can’t make such a the statement and I quote “Those charged with the responsibility of disposing of the asset may argue and even prove that, at the time that was the best price they could get” My challenge to you UPND together with the people who sold KCM for US$ 25 million is to prove that this was the best price. Please make all the information public and all the working of how such a price could have been arrived at. We are ready to go in technical details of your evaluation of KCM. If UPND and Mwanawasa gang cannot publicly prove that US$ 25 million was the best price for KCM at the time it was sold you are requested to withdraw this statement and apologize to Zambians. Mwanawasa sold KCM to a Chap who did not even have US$ 4 million in his pocket.

  6. Both Mwanawasa who sold KCM for US$ 25 million and Sata who has for corruption purposes been deliberately not collecting appropriate taxes of from the illegal revenues from Vedanta and other mining companies in Zambia but has been busy freezing the Zambia workers’ Salaries have serious questions to answer. Extremely serious crimes have been committed against the State of Zambia and there will be consequences, a precedent has been set against Chiluba and RB.

Comments are closed.

- Advertisement -
Loading...
- Advertisement -

Latest News

2021 NAtional Budget: Defunding the Police

By Charles Ngoma The 2021 budget was unveiled by the minister of finance Hon Dr Ng’andu. President Lungu’s government wishes...

Zesco United Has Faith in Zambian Coaches

Zesco United Chief Executive Officer Richard Mulenga says there is nothing special about foreign coaches. Some Zesco supporters expected the club to hire a foreign...

Covid19 Tests Dash Chipolopolo U15 Bronze Dreams

Two Zambia Under-15 players currently in Croatia for the “Vlatko Markovic” Invitational Tournament have tested positive for Covid-19. The development has forced tournament organizers to...

Blades, Real Nakonde in Group B of Div 1 Playoffs

Former FAZ Super Division side Konkola Blades have been drawn in Group B of the National Division 1 play-offs alongside Trident FC, Real Nakonde,...

DEC arrests seven in connection with money laundering

The Drug Enforcement Commission (DEC) has arrested seven people for money laundering related offenses involving K69.4 million. DEC Public Relations Officer Theresa Katongo has disclosed...

More Articles In This Category