U.S. Ambassador to Zambia Daniel Foote has called on government and communities to support the mining sector and ensure the country’s economic backbone continues to provide jobs, tax revenue, and export earnings.
Speaking during a visit to First Quantum Minerals’ (FQM) Sentinel Mine at Kalumbila, Ambassador Foote encouraged dialogue between mining companies, government, and communities to ensure all appropriately benefit from the enormous investment of FQM and others.
Ambassador Foote urged the government to ensure responsiveness and facilitate a conducive business environment for the mines and prospective investors.
After seeing the mine and its impressive modern facilities, and the enormous investment that has been made as well the impressive investment that has been made into communities and some of the corporate social responsibility, Ambassador Foote thinks it is a great example of what can be done in Zambia with the right investment.
“I encourage government and the communities to continue to work to create the right conditions to attract additional investors and to ensure that people who have invested heavily in Zambia can continue to successfully do business,” said Ambassador Foote.
Copper accounts for 70 percent of Zambia’s exports, and through its Sentinel and Kansanshi mines, FQM produces half of that copper.
The company, which has invested US$6.4 billion in Zambia, employs over 8,800 direct employees. It is the country’s largest taxpayer, having paid US$3.4 billion to the Treasury since 2005.
And FQM Country Manager General Kingsley Chinkuli explained that if introduced, the recent Budget proposals threatened the stability of the mining sector and would result in the scaling back of investment plans, job losses and reduced tax revenues across the industry.
The budget proposals include an additional 1.5 percentage point increase on all mineral royalty bands, with a new 10 percent mineral royalty when the copper price exceeds US$7,500 per ton. Critically, mineral royalties will now be non-deductible for corporate income tax purposes. Other plans announced last month include the introduction of a sales tax to replace VAT, meaning companies will not be able to reclaim tax on input purchases.
Mr Kwendo. Tell us how
The understanding behind taxing multinational copper mining companies in Zambia is that, despite an anarchical environment, there is some potential for order on the basis of international cooperation. It is especially true when GRZ enters into negotiations over the new tax regime in 2019, and reaches legally binding agreements. This can establish order and a cooperative network of paying the right amount of tax to the Zambian Treasury. (Ex ZRA Tax Man)
This is bloody sh.it! Poor people supporting mines that are exploiting them – where does this chimp come from. The mines have been milking our economy for so many years and they put back very little and in fact pay no Taxes so what more does this idyot want from Zambians? He is just another mother fcker!
‘And FQM Country Manager General Kingsley Chinkuli explained that if introduced, the recent Budget proposals threatened the stability of the mining sector and would result in the scaling back of investment plans, job losses and reduced tax revenues across the industry.’
Gen Chinkulu equally is very much part of the Chamber of mines that arm twists the Govt as they wish.The proposed changes in the 2019 budget are very progressive and marginal to affect any production both in the short and long run.The replacing of the VAT system with Sales tax system should be non-negotiable because even FQM despite being the largest copper producer in Zambia does not add value to it(copper) but export it as base metal.Ambassador Foote is talking about maximising benefits from mining and that is the…
Ambassador Foote is talking about maximising benefits from mining and that is the basis for the proposed changes in the 2019 budget.
General Chinkuli is a well known cadre serving the interests of the PF government which made him FQM country manager. FQM is exploitative; salaries don’t match the revenues they make and too much deals with the government and immigration. A day of reckoning will surely come!
Currently, mining companies do not bring back their exports into the Zambian economy hence as Zambia, we continue to experience depreciation of the Kwacha as witnessed over the years. If they Mines brought in the proceeds from the sale of the minerals back into Zambia, the following were likely to happen:
1) Kwacha significantly appreciates leading to cheaper goods
2) Inflation likely to further drop
3) Due to influx of cash, banks will begin to offer cheaper loans
4) Foreign loans became far much cheaper for Government to pay back.
Government in 2012-14 tried to have proceeds come back to Zambia, it was fought by industry. Other countries have managed such as Botswana and South Africa!!!
My submission, lets still find a way to have export proceeds hit our local banks but let…
That is a very good submmission.The first step should be the creation of Export Import(EXIM) Bank(Zambia) to handle all exports and imports in Kwacha terms and make all export and import proceeds bankable for tax purposes.This should be so because the so called London Metal Exchange allows the dollar (a local US currency-forget it being a reserve currency) to buy our copper produced in Kwacha terms and by-passing our local currency( Kwacha).This is a very big flaw.LME needs reforms to accomodate all world currencies and exchange competively.Ideally,the dollar is suppose to buy our Kwacha to access our copper.It is exports (copper) that gives the Kwacha its underlying value as a currency,thus exports have to be priced in the local currency and the buyers(importers) of our exports (copper)…
It is exports (copper) that gives the Kwacha its underlying value as a currency,thus exports have to be priced in the local currency and the buyers(importers) of our exports (copper) are suppose to,first buy our currency(Kwacha) with their respective currencies (dollar,pound,rand etc) in order to get out exports(copper) thus giving Kwacha demand (appreciation).Does this happen with our copper at LME? a resounding NO.Instead copper prices are quoted in dollars and a select few countries(EU,Britain,Japan and now China) are allowed to use their currencies within LME to buy commodities NOT produced in their currencies by-passing the currencies of producer countries, thus giving them undue advantage. Is this what Adam Smith preached in his book’ WEALTH OF NATIONS’?
FORTE HAS A POINT. BUT MINE OWNERS SHOULD UNDERSTAND US IN A BIG WAY. MINING COMPANIES NEED TO PAY THEIR FAIR SHARE OF TAXES. WE ARE A LAUGHING STOCK IN THE WORLD BECAUSE OF THE SHODDY DEALS DOUBLE H ORCHESTRATED ON BEHALF OF THE COUNTRY AND THESE WHITE COLLAR WHITE NIGGAZ.
I say the government should not back down on the current tax vow. We the Zambians have been paying huge taxes on behalf of these mines in more obscure fashion. 75% of exports are contributed by the commodity called copper but this very commodity has not help our country in the way it should economically. Now if those folks are also mining and exporting Gold, we are so f@@ked as country. Shouldn’t we stock piling our Gold like America?