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).