9.5 C
Alba Iulia
Thursday, October 22, 2020

First Quantum Delays $1 Billion of Investments in Zambia due to uncertainity

Economy First Quantum Delays $1 Billion of Investments in Zambia due to uncertainity

FIRST Quantum Minerals (FQM) Copper Mine in Solwezi
FIRST Quantum Minerals (FQM) Copper Mine in Solwezi

Zambia’s biggest copper producer, said it has slowed down or postponed more than $1 billion of capital expenditure in the country because of a tax dispute with the government.

“There’s a pervading atmosphere which creates a bit of uncertainty,” Operations Director Matt Pascall said yesterday in an interview in Lusaka, Zambia’s capital. “Certainty is absolutely the critical thing that’s required if we’re going to look at any form of investment.”

The Vancouver-based company is already investing about $2 billion in new mines and smelters in Zambia and says it’s the country’s biggest taxpayer.

Zambia is withholding more than $150 million in value-added tax repayments from First Quantum, Pascall said yesterday in a speech at an industry conference. A 10 percent duty on exports of semi-processed copper ore, known as concentrates, has created a build-up of stockpiles at the company’s Kansanshi mine which are now valued at $350 million, he also said.

Zambia, Africa’s second-biggest copper producer, is trying to curb tax avoidance by requiring mining companies to present certificates from the countries that import its metal.

Withheld VAT

Mines Minister Christopher Yaluma told reporters at the conference yesterday that the Zambian government will release about $600 million in withheld VAT repayments once the requirement is met. Mining companies have said it’s difficult to comply because their copper is often sold to trading companies and they don’t know where it ends up. Pascall said yesterday the requirement is “impossible.”

While First Quantum gets most of its revenue from its African operations, it has been expanding into other regions. On June 17 it agreed to buy Lumina Copper Corp. for about C$407 million ($379 million) to add a mine project in Argentina. It bought Inmet Mining Corp. last year to gain control of a Panamanian copper project.

Copper for delivery in three months fell for the first time since June 12, slipping 0.1 percent to $6,878.25 a ton at 7:54 a.m. in London.

Source:Bloomberg News

23 COMMENTS

  1. A lot of Zambians are very intelligent but collectively Zambians are dull. Whats the proof? Look who we voted into power in 2011..Its time for the few intelligent Zambians to outshine and outmaneuver the dull Zambians.

    • We refuse to be used and blackmailed.

      We are not going to just jump at your $1BN you are dangling and let you continue stealing from us.

      I urge govt to in fact revisit and renegotiate the deals otherwise lets keep our resources in the ground until we have a win-win situation in place

    • So now Sata and his greedy gang are panicking! They have looted the Zambian treasury and need cash to prop up the falling Kwacha!

      They will now kill the goose that lays the golden egg. We will eat well today, but remember that we will starve tomorrow!

    • At FQML, not only do they do they do roads using FQMO but also procures most of there Consumables using own Companies, all this happening at Inflated Prices.

      Bravo Hon. Minister, we have lost out as a Country for too long and shouldn’t allow this to continue.

  2. I think we cannot for more than 50 years of selling copper not know how the copper marketing chain works to impose appropriate measure to enable these investors to be transparent. This is fishy and the real motive behind withholding the 600m in VAT reimbursement is not being communicated sincerely. We can as well link it to the dried up treasuries of Zambia. Frankly, what kind of people are PF?

    • Not surprised about this response from FQML. This is the firm that were booted out of the DRC for there crookedness.

      How on earth can you not know who the buyer for your Copper is? For Zambian Copper, these curtails need to be broken. FQML either plays ball or they go. PERIOD

  3. There you go AGAIN with these foreign infestors blackmailing us and as usual the empty tins in govt will give in to their demands.
    These global firm like FQM are able to access such colossal sums of money to invest in Zambia as its subsidiary operations in Zambia are the most profitable as we are too docile.

  4. ….And this is the company which started its operations from Zambia. Grew from Zambia and after making money from Zambia wants to withhold investing in Zambia in preference to other countries. Something is does not make sense here

  5. What crap! Stop going round circles and say you are waiting for solid info over our presidents status concerning his health! Flimsy excuses as if we are that “black”! So much for being generous over peanuts!

  6. Ok people we can’t just screw the white man but withholding some meagre tax- don’t bite the hand that feeds you.We need to be smart about this.The copper is in our ground but we have no Zambian produced technologies to deal with it,if we did my uncle in Solwezi would have been the big Enchilada in solwezi by now.We don’t have Zambian engineers( BENG) willing and available to extract copper with home grown ingenious techniques.We have no voice to tell Londom Metal Exchange to put their low prices for our rich copper in their behinds.So what do we do? Lets start by changing our laws.Getting our best minds to sit with these first Quantum people and work out an amicable solution.These best minds should have been born after 1964.as people born before tend to tremble in a white mans presence.

    • *mean but = by in line 1
      Contd..We need to massively embark on improving our education,research in science and technology etc in Zambia. Forget about quick fixes the previous generation and ours is screwed ..we need to do this for the future of Zambia-our children and grandchildren..We aren’t smart enough to outmaneuver the people we foolishly sold the mines to at present but we can prevent such mistakes from being committed again…by amending existing laws,amending constitutional laws so that no single Zambian shall have the power or capacity to decide policy that condemns the rest of the 15million Zambians to economic slavery or colonialism.

  7. I would do the same if I were in FQMs position. We have a government of !diots that announces policies on the hoof. PF should have been clearer about their policies from the 2011. The truth of the matter is the PF government is broke. They are now doing everything to plug the hole through actions like this. Remember how they are now stealing from the underfunded universities.

  8. Companies as big as FQM have the ability to spend thier money elsehwere. the same statements made by FQM recently point out that Zambia has the highest mining taxes in the WORLD! of course we should never let our resrouces be taken out for peanuts, but the issue is more complex than that. There are many ohter develoing countries fighting over the same investment, if Zambia is not careful it may shoot itself n the foot! Open dialouge is best; lets be honest Zambians i think the likes of FQM are preferrable to ba Chinese or KCM!

  9. Keep your 1 billion. We will look for other investors. Whatever you want to invest in is in Zed so why should we worry if you flee?

  10. Sickening to see the number of ‘contributors’ who use the imaginary notion of ‘race’ to justify tax evasion and exploitation. (Race among modern humans doesn’t exist, and most Black people have a haplogroup one letter away from 20% of the Greeks. E1b1a vs E1b1b.)

    However it is standard for the capitalist class to pretend that they are the ones in the know, and everyone else doesn’t know what they are doing. Race is just another tool they use, where elsewhere they would make exactly the same argument using wealth, or education, or descent.

    It all comes down to one thing – who benefits form the Zambian people’s copper – the Zambian people, or Anglo-American De Beers, Rio Tinto, Newmont Mining – the same old familiars who have exploited Africa since colonialism.

    • @MrK,
      Please go back to school so you can learn how to understanding simple statements! I can tell that my using “Black” in my post has you confused. Please take note that I used quotation marks to disregard attaching the word to race, in this case read my through over and over again, you will soon realise that it comes nothing close to you have read it. Clue? Quotation Marks!

  11. we are all to blame as a nation as we let our fortune seekers (politicians) decide our fate. Very soon the lower Zambezi project will be initiated. Zambia is a docile nation and honestly do not understand our mentality? We are always eager to please and accomodate foreigners. Wake up people, we need not to forget the power of many! If we could all stand up aganist these greedy corporations as Vandetta and our dull politicians..trust me things can change for the better. Peasants in Peru fought and won aganist the privatization of the nations water supply, and cant we Zambians do the same for our copper. We are Zambians and we are all entitled to copper.

  12. Well done honourable minister. Please do not relent on this issue. They will soon badge and start complying because they have already invested. In US or UK or Russia, they abide by the rules and regulations. Why can’t they do the same in Zambia? Don’t give them VAT refunds until they comply! Period!!

  13. Bravo Hon. Yaluma, this is the a good move!! After watching “Stealing Africa”on Youtube which explains how they’ve been selling our copper to Agents (owned by themselves) based in tax-havens and later sold at L.M.E prices to China, thereby evading paying tax in Zambia. In as much as we welcome foreign investment, it’s so wrong to bleed evade paying taxes to Africa.

    Others create fake consulting companies based in tax havens who charge exorbitant fees on the mining houses.

    KCM just procures all spares from Indian at ridiculous prices in order to externalize profits.

  14. To see is to believe we can’t not be moved by the $1 billion investment. As a matter of fact wat impact will it have, Zambia won’t be made worse off in any way we are not children to be move by any kind of story. A good move by the govt.

    • I disagree. The import VAT belongs to the mines. It is government that designated mining exports as zero rated. It is incredible to believe that government has embarked on a failed project which will not stand a chance in court. No one within the four borders has the capacity to consume this much copper. So however long it takes, government will cave in and repay the mines.

      Please do not simplify these contractual/legal obligations – have you heard of ICSID? Go learn some international investment law before misleading the ‘unread’ majority zambians. And before you hurl insults, go and check the law!

  15. You know, these *****s are very selfish, and it is our stupidity that has caused them to be selfish. They have made their money from Zambia and there are still making huge sums of money. They should go to hell! I know they have employed many people. They tried to pull that prank on Katumbi and he asked them to leave the nation of DRC. They even left the equipment. Today, The Congolese are mining and china is buying! What are we afraid of? How can a stupid tenant threaten a landlord when there are many who want to occupy the land. Gov should get even that 1Billion by force! For once, let us stand firm and say NO to bad investment.

Comments are closed.

- Advertisement -
Loading...
- Advertisement -

Latest News

Zanaco , Power Win In Pre-Season Friendlys

As the countdown to this Saturday’s 2020/2021 season curtain-raiser Samuel 'Zoom' Ndholvu Charity Shield final between Nkana and Indeni...

Fires burn in Lagos after Nigerian soldiers shoot protesters

Nigeria’s biggest city Lagos and several states were under curfews on Wednesday as unrest rooted in anti-police protests broke out again following a day...

Zambian Born and bred Plastic Surgeon, Professor Charles Malata featured on a BBC TV series Surgeons: At the Edge of Life

Zambian Born and bred, Professor Charles Malata, one of the best Plastic Surgeons based in the UK , is currently featured on a BBC...

Pope Francis embraces civil unions for gay couples

Pope Francis became the first pontiff to endorse same-sex civil unions in comments for a documentary that premiered Wednesday, sparking cheers from gay Catholics...

Zesco sued by Maamba Collieries over US$300 million debt as US$ 500 million dollar “ghost loan” is revealed

Energy Minister Mathew Nkhuwa has confirmed that Maamba Collieries has opened arbitration proceedings in the London High Court against Zesco to recover $300 million...

More Articles In This Category