Mining firms on the Copperbelt province are threatening to shutdown if the 7.5% import duty for Copper concentrates government will introduce in 2017 is not rescinded.
A source close to the mines has said that mine owners are saying that the 7.5% import duty which will be introduced is too high and that it will increase operating costs.
The source said the mines feel the increase in cost of doing business will threaten the viability of their firms.
He also said that the mine owners are considering taking their smelters to the Democratic Republic of Congo were production costs are cheaper.
“Mines on Copperbelt are opposed to the 7.5% import duty for copper concentrates government will introduce in 2017. The owners of the mines are saying that overhead costs and operating costs will double thereby threatening the viability of their firms.
The threat by the mines will be a test of how the new Minister of Finance and MMD President Felix Mutati who has preached the need for policy consistence especially in the management of the country’s economy will deal with the looming crisis in the industry.
The mining industry in the country has been facing difficulties as the power deficits that rocked the country led to production cuts coupled with falling Commodity prices and policy inconsistencies by the PF Government resulted into thousands of employment cuts in the mines especially on the Copperbelt Province.
As late as November 2015 Konkola Copper Mines in Chingola suspended operations at its Nchanga underground mine in Chingola saying the mine will be back in operation “when market conditions improve.”
The jobs losses in mines are now in excess of 10,000. But that figure underestimates the scale of unemployment as it is not only mining workers being laid off but also mining contractors have already lost a lot of businesses which has resulted in more unemployment in other areas.
In Chambish a number of workers have been fired on flimsy chargers as the mines are said to have strategically been trimming their workforce without attracting unnecessary attention from government and other stakeholders.
Zambia is home to one of the largest Copper smelters in the world.