FORMER Minister of mines Mathias Mphande says Zambia should not be blackmailed by mining companies.
Dr Mphande, who is now Chief Mphande of the Lungu people, said in an interview yesterday that threats by Barrick Gold Lumwana to close its operations in Zambia must not be tolerated.
He said Lumwana has the largest copper reserves in the world that no investor would love to leave.
Dr Mphande, who is also a former lecturer at the University of Zambia (UNZA) school of mining, said there are a lot of mining investors willing and waiting to take over operations at Lumwana if Barrick Gold decides to leave.
[pullquote]He said Zambia is poor today because of failure to collect taxes from the mining companies.[/pullquote]
“It is unfortunate that Barrick Gold want to give an impression that they are paying a lot of taxes when it is not the case,” he said.
Dr Mphande said the mineral royalty tax contained in the 2015 budget is comparable to what mining companies pay in other countries.
He said Zambia is the only copper producing country which collects low mining taxes averaging between US$2 billion and US$3 billion annually which he said is unacceptable.
Dr Mphande said despite paying lower taxes, mining companies are earning between US$8 billion and US$12 billion per year.
He said Zambia is poor today because of failure to collect taxes from the mining companies.
“If the mining companies were paying acceptable amounts to Government, farmers would be paid on time, health facilities would have medicines and the economy would improve,” Dr Mphande said.
The mine says it will suspend operations at Lumwana following an increase in mineral royalty tax up to 20 percent.
[pullquote]“HH was heading privatisation on the mines and he knows well that Zambian mines are paying lower taxes but he goes on his campaign condemning PF over the introduction of the mineral royalty tax,” he said.[/pullquote]
And Dr Mphande said UPND president Hakainde Hichilema and FDD leader Edith Nawakwi are professionals who understand operations of the mines and must stop misleading people on mineral royalty tax.
Dr Mphande said it is unfortunate for Mr Hichilema to take advantage of the forthcoming presidential election to sell himself by misleading people on the reintroduction of the mineral royalty tax.
“HH was heading privatisation on the mines and he knows well that Zambian mines are paying lower taxes but he goes on his campaign condemning PF over the introduction of the mineral royalty tax,” he said.
Dr Mphande said it is wrong for Mr Hichilema to mislead people for the sake of winning the election.
He also said Ms Nawakwi is an intelligent economist who should stop misleading people on mine taxes.
He said three years before PF came to power, UPND and FDD are on record, saying they would introduce windfall tax but they are now in the forefront condemning the move.
Iwe Mathias Mphande, it is you and FTJ who dubiously privatized these mines on the suspicious basis that they were no longer profitable. how come the current owners are now making profit? When the state owned 51% shares of the mines, Zambia had social services, free education, etc. Just keep quiet, you have put our wealth into foreign hands.
These international investors are a scam,
Kagem Mining ltd in kitwe have been scamming the government since 2002; In every emerald auction held by the mine, the high quality stones are put aside and sold under the table to Indian buyers from the city of jaipur and the sale is not recorded; even when the company is having an auction outside Zambia, only 3.5 million dollars of emerald sales are recorded and taxed while another 7 million dollars worth of product is smuggled out of zambia illegally and the sales of these emeralds are not taxed or recorded in their books of accounts;
ask the directors responsible, Mr Govind Gupta and Mr Lewanika; all these illegal sales of stones have been going into their pokets
While Dr Mphande is correct with much of what he has said, I have to question and disagree with the Dr when he claims that;
“If the mining companies were paying acceptable amounts to Government, farmers would be paid on time, health facilities would have medicines and the economy would improve,”
Govt meeting its responsibilities does not and should not depend on the mines paying “acceptable taxes” but rather Govt keeping to, and exercising financial discipline. We have a budget every year and in that Budget are allocations for farming, so are farmers not paid on time?
Successive Govts in Zambia are extravagant and Zambia operates a pararrel and vibrant corruption economy. That is why we have no medicines. Thats not to say we should allow allow mines not to pay fairly…they should
At time of selling the mines sir, a tonne of copper was a $1000. It was no longer economical to mine especially underground mining.With the boom in China, copper prices rose to a peak of $9000 at one time.The current price per tonne is $6000
We are foolish as Zambians, we took Privatization as a solution to Zambian problems yet, we just sold our cash cow. If we can manage our mineral resources better?? Zambia can be in a much better state than current.
We need to change the tactics, grub the mines back so that we control the cash flow??
We should follow successful concepts used by the middle East governments on Oil?? They are smart and control the likes of BP and all other oil producers??
Wake up Zambia, let these useless miners go?? we can manage on our own.
Mphande is a PF cadre masquerading as former minister. He must learn to accommodate constructive criticism without resorting to ridiculing.
The mining houses are taking advantage of the bad precedent set by previous regimes who gave the firms tax holidays at the detriment of the Zambian economy. Therefore in correcting the anomaly, its imperative to engage the mining firms, especially those at development stage to formulate win-win fiscal regimes that takes adequate care of the dual interests. It should be emphasised that developing and bringing mining to operational levels demands massive capital investments whose returns are long term. Thus issue of opportunity cost must be considered. But this however does not relegate the importance of the Royalty Taxi. Zambia should collect maximum revenue from the usage of its minerals which are depleting resources; that should be the pensive of every responsible government.
Mphande has plans crush-landed after trying to malign ba Chikwanda? You are speaking sense but after you pulled a failed fast one in trying to bring Ba Chikwanda into dirty I dont like you any more.
“..Dr Mphande said Zambia is the only copper producing country which collects low mining taxes averaging between US$2 billion and US$3 billion annually which he said is unacceptable. …..he said despite paying lower taxes, mining companies are earning between US$8 billion and US$12 billion per year….”.
If the learned Doctor’s/Chief’s figures are correct, by my calculations, 2/8 or 3/12 =25% tax paid. Add Labour costs, material inputs, and other production expenses, repayment of loans with interest, recovery of exploration costs, mine development costs which can be estimated at 60%. Total costs: 25%+60%=85%. Profit=15%. ……..Continued
Already we read how mining investments in sub-Saharan Africa have recorded a sharp down-turn for various reasons including the above, plus political uncertainty, long term policy uncertainty, labour unrest, skills shortages etc etc.
The sober questions that we should ask ourselves are:
i. Is 15% a decent or indecent profit for such high risky investments?
ii. Will an investor come to Zambia if he can make a better profit in other competing investment (mining) destinations?
iii. Or is he at the point where his money is safer and more profitable if invested in US Treasury bonds than Zambia’s Lumwana Mine for example ?
Foreigners Try to Fix Zambian Elections to Install Hichilema
Evans Mulenga | November 19, 2014
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A group of wealthy South African mining interests and an arms dealer have been secretly aiming to exert their influence to fix the upcoming presidential by-election in Zambia, according to an article published this week in African Confidential.
The article, entitled “Foreign boost for opposition,” highlights an alleged conspiracy hatched by Brenthurst Foundation – an institution backed by the multi-billionaire Oppenheimer mining family dynasty to organise the installation of Hakainde Hichilema of the United Party of National Development (UPND) as the next president.
These South African mining interests were apparently motivated to undertake this scheme to…
Guy Scott is the future; black people cannot run a country; give us your companies; we shall hire u; pay u peanuts and make a killing of a profit when exporting minerals
In Zambia we do not value what we have, consequently we let other people benefit from our resources while we continue to wallow in poverty and we find that to be normal and acceptable which I find to be bizzare. We even condemn those who try to speak on our behalf. How come that other mineral producing countries are benefitting more from their resources while we do not?
I agree with Dr. Mpande who has been consistent on this issue. Zambians learn to appreciate and value your resources. It is not for nothing that God placed copper and other minerals in Zambia. It is to benefit us.
This docility which we mistake for a peaceful nature is a curse on us.
Hundreds over years ago we had people who could smelt metals, manufacture metal products and create copper crosses as currency to trade across the continent.
Today, we send our people away to study, let them be head hunted by others and then scratch our heads at the idea of designing anything that will technically aid us in the mining and manufacture of our minerals, gems and precious stones.
Instead we hire machines, expertise and pretty much anything foreign to do what is well within our capacity to do. Watch us turning a blind eye to the smelter being offered which is almost nuclear in its gassing of our people.
I vote for harnessing our own potential in all areas which includes beyond mining, financial and economic management, agriculture…
We can do better!
Zambians do not trust these politicians who do not understand economical fundamentals properly though claiming that they are good economic managers. I do not believe some of them in the recent past because their understanding of global economics in extractive industry is greatly lacking. I have come to understand why they selling the mines at song or cheaply. It does not make sense to desperate to get to plot one – you can not win an election by cheating. Impossible in modern Zambia!
Tell Mpande this HH is promising things which are not possible. HH thinks Zambians a dull who can buy is lies? No no he is mistaken.
Come 20 January 2015 Edigar Lungu is in state house.
Tell them Dr village headman, especially HH who claims to have skills to undervalue companies when he is applying for the job as head of state
HH has suddenly become a lair most of what is saying is not attainable. HH knows that mines have been giving us raw deal we get very little from the mines suddenly is changed and says government is not fair regarding the new law government has proposed what lies are those. Is not HH who has been talking about windfall tax and that government will raise more money from it. Changing in a presidential by-election is not good for us at this time imagine HH wins the following changes are likely to happen;
1. it will take him over a year just to organise his government and will mean fire and hire a lot of people DAs Ps etc, recall people perceived to be PF from foreign service pay them there benefits send new appointments and that will take a year plus and very costly.
Those are kind of CHiefs we want who are knowledgeable not being cheated by the Satanist
HH is not a liar and he NEVER sold the mines. His company was only contracted by the chiluba govt to provide consultancy services. HH had no powers to sell the mines. Dont mislead pipo. In fact sata was part of that chiluba cabinet that decided to sell the mines. Why didnt you morons ask him about his role in the sale of mines.? Mphande was a mines minister, why didnt he correct the wrongs? Just sit in that village and be chief.
Besides, why are u pipo so worried about Lumwsna? After all, the so called mining taxes have not benefited the pipo of Northwestern prov and solwezi in particular. Instead u have used this money to develop mansa, kassma, chinsali etc without shame and done nothing for northwest. Just look at the roads. How stup!d can u be?
Sober economist, your analysis is excellent. This dr mphande does not seem to understand the economics around mining. The figures he is talking about are incorrect because our ore is low grade. Dr mphande pls consult. Dont mislead pipo.
@jamakudi, amaanimos from Waching galu in Zambia think think our minersal are of poor quality! Fuu stop deceiving people watch this
Gems TV Zambian Emerald Documentary Film
And they pulled this one down
“Stealing Africa – Why P…” This video is no longer available due to a copyright claim by Steps International.
(German gov had even vowed to help Zambia to stop the stealing $ and you f are saying something else?)