Sunday, May 19, 2024

New charges in mining industry and declining global demand for copper may impact Zambia negatively


The Zambia Institute for Policy Analysis and Research has warned that imposing significant new charges in the mining sector at a time of declining international demand for copper may have adverse impacts on Zambia’s economy.

Mineral Royalty rates have been increased in the 2019 National Budget by between 25 percent and 67 percent across the different price bands which represents a 25 percent increase in fees at current copper prices.

The Zambia Institute for Policy Analysis and Research Knowledge Manager Euphrasia Mapulanga said even if revenue is higher, the charges could cost Zambia economically if investment is deferred or production lowered as was the case in 2015.

Meanwhile, Ms. Mapulanga said the 4 percent Gross Domestic Product Growth projected in the 2019 National Budget is achievable but not without risks.

She has noted that the debt burden, exchange rate volatility, subdued growth rates in agriculture caused by climate change could all persist in 2019 and has called on Government to focus on playing a more facilitative role in creating a conducive environment for private sector investment, and a private sector led recovery in order to mitigate the impact in the face of fiscal consolidation.

“This also calls for elimination of constraints that make it difficult for the private sector to contribute positively to economic growth and therefore achieving the set growth target for 2019”, She added.

And on Public Resource Management, Ms. Mapulanga has called on Government to lay a strong foundation for fiscal consolidation by implementing the improved resource management processes pronounced in the 2019 Budget.

“These and measures from previous Budgets including the Revision to the Public Procurement Act, the National Land Titling Programme, The Planning and Budgeting Bill and reforms to improve the efficiency of State-Owned Enterprises that are yet to be implemented are long overdue”, She said.


  1. This is what Ken said on the other blog regarding the sentiments by the chamber of mines.

    Zambians should not listen to Chishimba. He lives on pay from these Mines he so vehemently protects. Where does this guy come from? This guys has no heart for this Country. he is busy lying about the taxes.
    1. Mineral Royalty taxes have been increased as follows; He chose to convert figures to confuse ordinary people
    – When copper price is less than USD4500 tax is 6% increased from 4%
    – When copper price is better at USD4500 to USD6000 tax is 7% increased from 5%
    – When copper price is much better at USD6001 to USD7500 tax is 8% increased from 6%
    – When copper price is booming above USD7500 tax is 10%
    2. Abolished VAT to be replaced with Sales Tax
    There is no change here but simply a change…

    • And when an official from ZIPAR uses the same language as the Chamber of mines when expressing sentiments on the marginal changes (and not increments) to the Mineral Royalty Tax rates,I normally get concerned.Infact the new proposed Sales tax regime on our mines,is a progressive tax for it accomodates mines both in bad(when the prices of copper are less than $4500) and good(when the copper prices are between $6001-$7500) times.It also has a windfall tax when copper market is in a boom.In shor it is an all ‘weather’ tax unlike the VAT system which was evasive.ZIPAR should not be bearish in their analysis like their counterparts at the Chamber of mines.

  2. @1to1.1 Sharpshooter, THANKS FOR PUTTING THIS ISSUE INTO PERSPECTIVE!! In fact, over years we have lost since the abolition of the windfall tax!! These mining companies are DAY LIGHT SWINDLERS WHO SPECIALIZE IN BLACKMAILING GOVT. We tolerated them till they got too used to the game. This time we need to stick to this taxation structure!!THEY CAN COMPLAIN BUT WON”T LEAVE,THEY DID SO UNDER WINDFALL TAX BUT STAYED. These taxes are NO WHERE NEAR TO WHAT THEY ARE NOW PAYING IN DRC,THEY COMPLAINED BUT HAVE STAYED!! ZIPAR are even telling us something KNOWN TO ONLY THEMSELVES,that demand for copper is falling when EVERY ONE EXPECTS DEMAND FOR COPPER AND COBALT TO SKYROCKET AS ELECTRIC CARS AND GREEN ENERGY GET A BOOST! Please ZIPAR,DON’T KILL this taxation regime before it is even tried!!

  3. Windfall tax was implemented by LPM at a copper price was buoyant.

    Now you have a vissionless govt that condemned every thing mmd stood for copying and pasting

    • It works for Zambia, then let them copy and paste. Sata was wrong in economic movements. Lungu is bearing the brunt. Zambia is what we stand for, its growth that is.

    • @3 and 3.1, Wind Fall tax was courageously and patriotically introduced by MMD by Mwanawasa and his Finance Minister Magande, it was removed by MMD through Rupiah Banda and Dr.Situmbeko Musokotwane. Before coming to power the PF promised to reintroduce windfall tax changed as they got into power and but revised the Mineral Royalty Tax (MRT) from 3% to 6% within a few months of being elected. Later in 2015 they removed corporate tax after realising that most mining companies were dodging to pay by consistently declaring losses.They revised the MRT to 8% and 20% for underground and open cast mines respectively. The mines resisted the new taxation structure( of course with support from some opposition parties. They settled for 9% across the board keeping corporate tax. So PF, though they…

  4. Zambia and Africa should work as a unit when dealing with foreign mining investors. Never back down, plus meet them head on. Plus it is time Africa’s wealthy started investing in their countries industries and resource development.

  5. This is how African countries get robbed day in day out. How is there a global decline for copper suddenly when you revise your tax rules? The government should impose further legislation to re-nationalize any mines claiming to struggle due to new charges. These chaps like to play cat and mouse with our people. This is where our real wealth is, money for our schools, hospitals, and roads, not the silly charity pot of money planted at the center of our Government to act as a mouthpiece of the West to keep us in check. ZRA fyantamo ka money!

  6. We need to be strategic the way we deal with our non renewable resource COPPER. The truth of the matter is that demand for copper is projected to triple within the next 15 years as the global car manufacturing industry goes green. Production of electric vehicles will require a consistent supply of copper for motors and the like. Pseudo shocks may be experienced in the short term but in the long term all will be back to normal in terms of demand. HH spoke about this a long time ago. Remember the stockpiling strategy as well?

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