(right) and his Deputy George Zulu (centre) inspect the Lusaka fuel
storage depot with Lusaka Province Minister Obvious Mwaliteta before
commissioning of the plant
MINES, Energy and Water Development Minister Christopher Yaluma has assured mining investors in the country that the new fiscal regime is not intended to hurt the industry but to increase Government revenue and transparency in the sector.
And Mr Yaluma has said Government is engaging into discussion with Barrick Gold Corporation on its intended plans to suspend operations at Lumwana Mine.
The new fiscal regime for the mining industry sector address two specific imbalances observed in relation to national incomes derived from the mining sector and the structure of those income sources.
Mr Yaluma explained that, in connection with national incomes derived from the mining sector, despite high levels of copper production and revenues in excess of US$6 billion per annum, only two mines were paying corporate tax.
“In our view, as custodians of a wasting natural resource, the situation was unsustainable and unfair to the few companies that were actually paying taxes.
So this tax system is aimed at addressing these imbalances,” he said.
Speaking at the Association of Zambia Mineral Exploration Companies (AZMEC), the Minister said he was aware that a number of mining companies were threatening to put on hold exploration projects because of the new fiscal regime.
Mr Yaluma said exploration was critical for the development of mining as no meaningful mining can take place without exploration.
He said inadequate or lack geological information not only hinders investment but that also makes it difficult for Government to obtain a fair share from concessions in the mining industry.
To this effect the ministry has in the past three years continued to implement measures to enhance the availability of geological information to promote exploration.
Mr Yaluma said measures include continued geological mapping of parts of the country and construction of sample sheds to improve storage of drill cores for easy access by investors, researchers and general public.
He said the ministry also commenced construction of a core shed in Kapopo Chibombo District in 2012 and it was expected that 90 per cent of the works would be completed before the end of this year.
The Government seeks to ensure orderly development of the mining industry and reduce speculative holding of ground while at the same time maintaining Zambia’s favourable investment climent.
Commenting on Barrick Gold Corporation plans to proceed with suspension of operations at Lumwana Mine, Mr Yaluma explained that the Government had told the mining company that they were ready to meet and agree on the matter.
Mr Yaluma said the ministry appreciated the efforts by Barrick Gold Corporation sensitise the Government on its intention to proceed with the suspension of operations at Lumwana following Government’s decision to uphold the revised mineral royalty tax for open cast mines
But that the Government was equally concerned and would not want to see the mines shutting down as they provide a livelihood for Zambian citizen.
President Edgar Lungu, Finance Minister Alexander Chikwanda, Mr Yaluma and the owners of mining company mate to dialogue over the made.
He also said the ministry was also expected to meet Konkola Copper Mines (KCM).
Pain is only felt by a the affected…simply put the new tax regime hurts the mines.
Probably Govt never intended to hurt the mines…
“In our view, as custodians of a wasting natural resource, the situation was unsustainable and unfair to the few companies that were actually paying taxes.
So this tax system is aimed at addressing these imbalances,” he said.
Meanwhile the same empty tins; the President, Fossil Chikwanda and Yaluma are dialoguing with the mines…about what? So long as we have these dull politicians on the negotiation tables and not professionals or technocrats who have worked in corporations there will always be imbalances and taxpayer lose out…through secret agreements behind closed doors…its happened before.
How is it that Copper producing countries like Chile always get this balance between Private sector business needs and public needs spot on…send our advisers to that country.
Another “achievement” by Hon. Chikwanda and AG Chambers in using theirs respective financial and legal “expertise” in drafting and implementing subsidiary legislation.
Jay Jay you are out of touch and character assassination of Chikwanda are born out of hatred on Chikwanda as a person. What have you done for mother Zambia that you can clear talk about apart from insulting the man who has done good for Zambia. Chikwanda is not a angel just like anyone else. He keeps on trying. Get yourself sorted mate before you die from frustration, envy and hatred.
Chikwanda may not be your cup of tea but he is older than your father. Insulting Chikwanda you are insulting your father or older persons who have contributed more than you have . The unsung heroes who put their lives for what you and I have failed to do to mother Zambia. Jay what will you do to mother Zambia and not what Zambia will do for you. hiding behind the keyboard insulting AC will not help Zambia
The economy is in a downward sparrow, Kwacha is becoming useless with everyday that passes that passes by due to incompetence, recklessness and shambolic management…i take it some people go into a coma when the auditors generals’s report is out and wake up way after its printed out and someone is concerned about me critical of an individual overseeing all this…well if you have a problem with…dig a shallow grave, roll over and die!!
Wake up!!
Flat tax is good idea to deal with unscrupulous mine owners who have been faking losses since privatisation in 2002 (13 years). However 20% royalty on low grade mines like Lumwana is too steep. Rather categorise open pit mines into ore grade brackets e.g. below 1%Cu deposits like Lumwana pays 12% royalty, 1%-2%Cu deposits pay 15% royalty and above 2%Cu deposits like Kansanshi 20%
A %age is easily managed. A flat figure means even if you make 1$ you still pay that figure. Solution is to reduce the %age
We as a country should never, never give in to the demands of these fake mine investors… If I were Zambia, I would nationalise all the mines. Yes you heard it (Washington consensus, thinkers), nationalise our God given natural resources. To HELL with the western prescriptions of how we should run our economies!
@MR Tembo, we will keep going in circles. KK nationalised the mines and the result was a disaster. Let GRZ have bigger shares in new mines and leave the already existing mines as they are. GRZ most of the times does not even have cash for civil servants and relies on cash from the mines. Don’t be surprised when civil servants start getting paid after two months once you frustrate and force out these mining investors.
Uhmmm were the mines not nationalised for 30 something years..and what happened to them…they were derelict and of no value. don’t bite the hand that feeds you….
Don’t like giving up our rights but we Zambians are our own worst enemies, when we try to manage on our own e,g look at roads built by our Zambian companies compare this those built by European union. Same thing happens when we try to run our own companies all professionalism goes out the window and we start hiring our relatives look at ZESCO
Running a successful business….IS ALIEN TO ZAMBIANS!
YOU WERE MEANT TO BE LABORERS.
Strike a balance, work on percentages of ore grades and increase government investment on our behalf. The raw deals have always been as a result of misplaced interests. Plan ahead of schedule and see where we will be in 50 years with what we are getting at the moment. Ownership is key, but gradual but steady GRZ investment.