Sunday, February 25, 2024

Zambia is open for international capital, says Vedanta as they praise President Lungu

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Tom Albanese, Chairman of Vedanta Resources Holdings
Tom Albanese, Chairman of Vedanta Resources Holdings

PRESIDENT Lungu’s directive to revise the mining tax regime and address the value added tax (VAT) refund issue is from an international perspective a positive turn that Zambia is open for international capital, Vedanta Resources chief executive officer Tom Albanese has said.

Mr Albanese, who is also Konkola Copper Mines (KCM) chairperson, commended President Lungu’s directive as a bold decision which recognises the importance of foreign direct investment (FDI) to protect the future of the Copperbelt and the entire mining industry.

KCM is a Vedanta Resources subsidiary.

In an exclusive interview in Lusaka yesterday, Mr Albanese commended Government’s response to the VAT refund issue.
“We have unfortunately been running business in a cash deficit because of non-refund of VAT.

“The effect has been to cramp business flexibility in terms of making regular cash payments to vendors and counterparts,” Mr Albanese said.

“It has been hand-to-mouth every month. We are happy with Government’s response and recognition of the effects of the non-refund of VAT,” he said.

Mr Albanese said one of the constraints caused by non-refund of VAT has been inability to run the company’s smelter at full capacity.

“Smelting should be a business that is profitable for KCM and also good for the country by converting the concentrates into sellable copper.

“Unfortunately, until President Lungu’s decision, cast smelting was a loss making venture,” he said.

“With the new ordinance, we are planning to ramp up our capacity for smelting and handling third- party concentrates.”
Mr Albanese said the slow-down in Chinese metal demand has affected fortunes of the global mining industry resulting in withdrawal of global capital from mining to other sectors like insurance.

He said this has placed a greater burden on mining companies in emerging economies.

Mr Albanese said for a long-term perspective, it will be important for mining companies and Government to recognise the importance of attracting FDI.

Mr Albanese also said KCM was currently operating at a loss due to a number of factors, including falling ore grades at Nchanga Open Pit, high cost of production and lower global copper prices. However, management was seeking ways to return the business to profitability.

KCM is also taking steps to ramp up production at its flagship Konkola Deep Mining Project, which is the future of the mine.

He, however, expressed optimism of a rise in copper prices within the next five years.

“The world will need copper again and I am optimistic of copper prices rising in the next five years.
“But it takes capital to stand again,” Mr Albanese said.

7 COMMENTS

  1. Tax payers are not known to praise the tax-man from time immemorial. There could be an imbalance somewhere. The President should receive this praise cautiously.

    • Foreign in vestrors take advantage of us, as Africans and Zambians in particular.
      Their investments in Zambia are largely to the benefit of individuals and business houses in their homelands.
      So any praise directed at President Lungu shows a weakness in our leadership to “fight” for our fair share.
      Lungu will be advised to learn one or two things from Uncle Bob in Zim who has gone in for a majority share of 51% to the state. They (investors) threatened to pull out but how many have done so?
      There are still there…each one of them.

  2. When you are praised by an Indian company know that they think that you are daft. Indians are money hungry monsters.

  3. I agree, a tax payer to praise the Government? Very strange. This is why some of these policies like private enterprise run economy should be reviewed.

    Since we introduced the private sector driven economy, have we tried to review whether they benefit Zambians or not? If they are not why dogmatically stick to them. How were we at the time we changed to this system and today.?

    If the situation is getting worse and not improving but benefiting a few of these vandetta chaps, then we are in trouble need to re- think about what we are doing.

  4. President Lungu is prudent. It is up to Zambians that are fortunate enough to have resources to turn the ship, ground it and make it into a superior class vessel.

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