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Alba Iulia
Friday, May 29, 2020

Zambia to make 30% loss due to bad 2015 Budget-Chamber of Mines

Economy Zambia to make 30% loss due to bad 2015 Budget-Chamber of Mines

The Zambia Chamber of Mines (ZCM) has expressed concern with the implementation of the 2015 National Budget which has been passed by Parliament in its current form.

The Chamber stated that its analysis of the 2015 budget reveals the threat of wide-ranging, unintended ramifications for the country’s mining industry, including the suspension of certain mining operations which would significantly affect jobs, inward investment and reduced government revenues.

It stated that it is regrettable that as a result of the approval of the 2015 budget through Parliament, Barrick Gold Corporation has announced that it will initiate procedures to suspend operations at Lumwana Copper Mine.

The Chamber noted that Lumwana is a major driver of the North-western Provincial economy and its suspension of operations will also impact adversely on the operations of the three smelters on the Copperbelt which heavily depend on the Lumwana copper concentrates.

The mines mother body said it remains deeply concerned about the 2015 budget, mostly because of the introduction of the single tier system with no consideration of operations profitability and the legislation’s potential for significant unintended financial and social consequences.

The Chamber of Mines and its members have since appealed to government to undertake further consultations and conduct a thorough analysis to fully understand the serious financial and social impacts which will be caused by the introduction of the 2015 budget in its current form.

The firm contends that the 2015 budget will adversely impact tens of thousands of lives, and has asked government to pause whilst it reconsiders its implementation on 1st January, 2015.

The Chamber stated that the imminent implementation of the 2015 budget measures may make a number of other operations economically unviable, potentially leading to further mine closures.

It said of particular concern is the postponement and potential cancellation of major expansion projects such as Mopani’s Mufulira and Mindola Deep Shafts, Mopani’s Nkana concentrator and Kansanshi’s Sulphide Circuit and Smelter Expansion.

The Chamber said if the proposed Mineral Royalty based single tier tax system is implemented, the suspension of Lumwana could see the loss of around 4, 000 direct jobs.

It estimated that in 2015 alone, as a direct result of the introduction of the 2015 budget, mine suspensions and the postponement of major capital projects will lead to over 12, 000 direct job losses.

The Chamber stated that this will have a significant, detrimental impact on those towns and communities of the Copperbelt and North-Western Province who benefit from the significant investment in economic and social welfare by the mining sector.

The Zambia Chamber of Mines further estimated that production losses in 2015 will exceed 158, 000 tonnes, adding that more worryingly, over the next five years lost production will exceed 1.1 million tonnes of copper.

The Chamber furthermore stated that Zambia stands to lose over US$1 billion of export earnings in 2015, and a staggering US$ 7 billion over the following five years which it said equates to around 30 per cent of Zambia’s Growth Domestic Product (GDP).

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  1. Please respect our intelligence…will you?
    Lumwana’s production cost is $2.96/lb of copper. That mine has the potential, with astute management, to produce at $2.45/lb
    Let them go, the Chinese will come and teach them how to mine profitably.
    This is just a smokescreen to blackmail the government.
    Zambia has the propensity to still be one of the lowest quartile copper producers in the world. Our ore grades are 5 times higher than those in Chile and Kazakhstan.
    Face facts guys, you talk like amateurs.

    • Stop it you nitwit!
      Ask me who is in the thick of things!
      Royalty tax is bad because even when the mine makes a loss, it still has to incur further losses in royalty taxes!
      Good tax is supposed to be charged on profits and not total sales! Hope you are financially literate enough to understand simple profit and loss accounting!

      In fact Zambia has made history, the first country to have royalty tax in excess of 5% in the face of falling copper prices.

      The fact is that our government has borrowed recklessly and they are now desperately trying to correct their mess the wrong way! Every mine has its unique operational challenges. Lumwana is a low grade mine – you need to get 5 tonnes of ore to make one tone of copper which makes it a high cost mine! Investors are not here 4 charity!

    • I agree with you, if they don’t want to pay 20% for our minerals then they can pack…what they are paying now are peanuts which cannot be compared to the holes they are digging. You chamber of mines chaps are sleeping with these corporations that’s why you are concerned that’s pure greed.

      So tell your lovers they can pack and go. Its better we have copper in the ground than have holes with nothing to show for.


    • @Chumbu check your facts before you yap… Do you know what these same guys pay in Chile.? 20% 30% and 35%, they have never closed mines. Check South Africa. Guys don’t be cheated these corporations are thieves.

      keep it up grz

  2. Why are they not mentioning anything on the Gold, Cobalt, Uranium and Precious Stones which come along with Copper. As am concerned they can go and these minerals don’t rote or evaporate so they might as well go back to Canada coz my great grand children will mine these same minerals. Coz they have been ripping us on the pretext of exporting soil

    • Come and look for those minerals and we’ll be happy if you could show us where to look for them!
      Don’t just yap without facts and concrete evidence!
      If Zambians continue on this sT.upid path of talking about things they cannot verify and things they have little knowledge about, it will be your country to pay the price! Investors are not here for charity but to maximize returns for shareholders and paying fair taxes in their countries operation!

      Also note that China is the major market for your copper. Give them copper mines and the copper price will continue to slide as they will be self sufficient, and loss of revenue for Zambia! Blame this crisis on the ignorance of your leaders! Vote for businessmen and women with knowledge of

  3. Chumbu,
    You are too theoretical. NOT PRACTICAL MY FRIEND. Your knowledge is best confined to a sterile classroom, or a rowdy bar/tavern!!!
    I’ve been in mining since 1998, having graduated from the Royal School of Mines (RSM). I’ve studied copper mines in Indonesia, Zambia, Oman and DR Congo. I fully well know what I talk. Don’t you try to bring mineral economics to me. I was a resource person with KPMG.

  4. Chambishi sells finished copper and cobalt, at a knocked down (discounted) price to a warehouse in Johannesburg, who then sells the metals at the ruling LME price, to avoid paying tax in Zambia

    Kansanshi does not declare the gold in the copper concentrate it exports. Yet, they get a gold credit 3 months later. That gold is not taxed in Zambia!

    Sable Zinc was sending its plated copper from Kabwe to Mopani for refining. Declaring a copper grade of 85% Cu. Where on earth has electrolytic copper come off the cathodes in a tank house at such low grade? Another well-contrived plan to defraud the Zambian Revenue Authority!

    These facts were leaked to Dr Beene when he was the PS in the ministry of mines. He did nothing about them. Even mines minister, Hon MMB Mwale was informed, to no…

  5. Chumbu(munshololwa. Let not the few crumbs that you scramble for crowd your country patriotism. It seems you are fending for your masters as a well trained lackey, seasoned uncle Tom bootlicker! Brenda, please continue unleashing this information and it may just land into responsible leadership minds.

  6. Brenda, God bless you. This is the kind of debate we need on these social medias not insults. Please prepare an article with all the information like what you have just said and post it so that people may begin to understand how much revenue this country looses. Infact you need to join hands with that lady at Action Aid since the men have ben compromised by some mining investors.

  7. Brenda please some more information. These guys think we are so dull to eat our masuku pa mutwe. Let them go if they want . Those who are serious will take over. The Agroamerica wants to come back after going, why? Is not that they have found that china is making more from copper? Please Zambians let us not be blackmailed by these selfish thieves.

    Peace and Prosperity to Mother Zambia.

  8. Yeah Guys,
    20 years ago at university abroad, when we did case studies, of the 10 case studies, 8 came from Zambia. These are:
    1) Deep mine de-watering – Konkola, Chililabombwe
    2) Electric arc smelting – Mufulira
    3) Copper solvent extraction – TLP Chingola
    4) Computerised concentrate scheduling – Rhokana, Kitwe
    5) Precious metals recovery from copper mining – PMP, Ndola
    6) Rock mechanics and slope failure – Chingola open pit
    7) Tailings dams failure – The Mufulira mine disaster
    8) The use of cyclones for building tailings dams – Chonga Dam, Luanshya

  9. “Some even believe we are (…) conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will. If that’s the charge, I stand guilty, and I am proud of it.” David Rockefeller, Memoirs

  10. Not long ago, the cost per pound at Lumwana was put at $0,76.


    EQUINOX Copper Ventures (ECV) limited says Lumwana copper project will produce on average close to 190,000 tonnes of Copper in its first five years of operations.

    This will make Lumwana the largest copper mine in Africa.

    ECV managing director, Harry Michael said the cost of production on average is expected to be around 76 cents per pounds. Mr Michael in an interview with the MAIL said production will after five years average to around 150,000 tonnes per annum.

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