Isaac Mwaipopo
Isaac Mwaipopo

The Centre for Trade Policy and Development has challenged Mining companies to stop using Mine workers as tools for bargaining in negotiations on the proposed tax changes.

CTPD Executive Director Isaac Mwaipopo said this is manipulative and government should not condone such cooperate behaviour.

Mr. Mwaipopo has observed with concern that every time there is a standoff between mining companies and government, the mining companies are quick in pushing back and often times using the Zambian workers as sacrificial lambs in the bargaining process.

“This is wrong and must end, while we understand that there could be some concerns from the mining companies with regards to the proposed tax changes, it is imperative that dialogue is prioritized over manipulative and arm twisting tactics. One thing the mining companies must never forget is that the minerals they are extracting and exploiting belong to the Zambian people and Zambians have every right to participate and benefit from its natural resource endowment and employment is one of the ways through which this is archived”, Mr. Mwaipopo said.

He said the proposed measures and other tax changes have infuriated the mining sector in Zambia and resulted into threats to lay-off close to 21,000 workers as the mining sector believes that the imposed new tax changes will affect production and expansion projects across on the sector.

“Among the most notable proposed changes, the new mining tax regime proposes to make Mineral Royalty Tax non-deductible from income tax and increases MRT by 1.5 percentage points on the sliding scale depending on the international copper prices. Government has also proposed to abolish VAT and replace it with Sale’s Tax effective April, 2019”, he observed.

Mr. Mwaipopo said while his Organisation appreciates a number of concerns raised by the mining companies, he has urged the mining companies to be a lot more open and sincere on their production costs.

“We do not think that the proposed tax changes could warrant such high number of job losses and backlash, unless they tell us that the Zambian work force is a burden they have always wished to get rid of”, He added.

Mr. Mwaipopo said it is sad that mining companies have continued to project a picture that they are operating under tough conditions and that its difficulty for them to trade profitably while publicly available information continue to show that this may not simply be true.

“For example, in 2017 alone, it was reported by Bloomberg that profits for Glencore, Mopani’s parent company, grew 400%, from $1.38 billion in 2016 to $5.78 billion in 2017. Owing to this, Glencore paid $2.9 billion in dividends to shareholders”, Mr. Mwaipopo said.

He has since urged the mining companies to explore other ways of cutting down on costs something that can be worked in consultation with government and other key stakeholders and will also be helpful if they can publish a detailed cost of production so that many can get to know what exactly goes in extracting minerals.

Mr. Mwaipopo has also urged government to step up efforts and invest in improving Zambia’s technical capacity to understand the operations of the mining sector saying failure to do so, will continue to make this country depend on the mining players’ information on how the sector is run thereby making it difficult for government to make informed policy decisions.

“We further urge government to avoid irresponsible borrowing of loans going forward, as of June, 2018, the stock of external debt was US$ 9.37 billion. This represented 34.7% of GDP. The stock of domestic debt, in form of Government securities, was at K51.86 billion. This represented 19.2 % of GDP. The stock of arrears stood at K13.9 billion or 5.1% of GDP; and, the total stock of guarantees were US$1.2 billion or 4.4% of GDP, this is what is putting our country under pressure when it comes to domestic resource mobilization as the country now has huge debt repayment obligations”, he said.

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13 COMMENTS

  1. hh will save the mines. When he comes to power he will abolish all those “brutal PF” taxes!!

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    • Is this how we will be discussing marijuana industry too? I think it will be worse than mines.

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  2. The government must stand firm and get every dollar into the treasury in mine taxes. They have ripped us off long enough.

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    • You got that right!

      Zambian Govts, past and current, are just too focused on the next election than doing what is right. They think if they stand their ground and masses in the Mines lose jobs, they get blamed and put their chances in the next elections in Jeopardy…..and that’s the tragic history of how politicians have managed our resources in Zambia.

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  3. If government had not borrowed heavily for infrastructure political will to tax mines appropriately would never have materialized. Now there’s a double benefit. Govt finally has the will to act because of all the pressure locally and internationally about Zambia’s debt, meanwhile we continue to benefit from much needed investment in infrastructure and medical services. This is why is important to support the government of the day.

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  4. You what? This Mines and Jobs stories , and the cutbacks are really crazy for me and I just can’t get my head round it, and why is it being drawn out like a political football?

    I mean, do mines hire people to please politicians or boost their production and so increase profit? I mean, if you want to make profit you got to sell more stuff and if you want to sell more stuff , you got to produce more stuff and if you have to produce more stuff, you got to hire more STAFF? And that is how you create jobs. You just can’t be keeping staff on your books just to please politicians. I doubt if this is the situation here. No private companies would do that. This is purely a bargaining tactic.

    If the mines are just hiring people for the sake of it, the questions needs to be asked why?…

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    • If the mines are just hiring people for the sake of it, the questions needs to be asked why? There could be some corruption going on with politicians, and ACC need to move in. Could there be a reason why they are so daring? Copper prices are high and we are talking about 5% and sales tax, and remember, just a few years ago ALL these mines’s electricity was being subsidised by the ordinary Zambians. They were never paying reflective prices. Electricity was being imported for them on the cheap. Is that what they want? I mean they employ about 2% of the labour force in Zambia. What is special about them really.

      Please use something else to fight Government , not workers please. They are Zambians and they subsidised your cheap electricity for many many years.

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  5. PF cadres will be on the ant hill shouting the ‘crucify them, crucify them’ but that is cheap to say the government will reposes the mines. The best it can do is to increase shares in these mines so that they have an amplified voice in the running of these mines.

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  6. I support the increased taxes but we could have utilised the revenues a lot usefully for the henefit of Zambians if the government had not borrowed so stupio.dily, sens.elessly and drunkenly. The government makes Trib.al Hacks look almost clever and yet he is an equally sensel.ess, directionless, drunken politician on top of trib.al and uninspiring.

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  7. When you look at workforce stats on FQM Annual Report 2017 it states 2500 workers average on paper for each of their mines…so what are these excess workers they have when the cut 2000 jobs? This is a game of chicken …let them go ahead and cut jobs…this is why we need Politicans who have worked as executives in top 100 firms in the world.

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  8. Asking mines to stop using workers as bargaining chips is like telling civil servants and other workers to stop striking when management is not improving their conditions of service. Just offer solutions to the current problems..don’t send empty challenges just to try and make your organisation sound relevant

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  9. Government + securing mining jobs + mining taxes + votes for incumbents …it’s all a very delicate balancing act you have to agree.

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  10. Bottom line is we need more from our Mines. There has to be a shift in who benefits more from the mines, our share must go up. Currently the mines are serving shareholders.

    They never leave but cause unemployment and intervene in politics vying to support opposition that are sympathetic to the robbery of Zambian resources.

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