The Lumwana copper mine is located about 100 km west of Solwezi in Zambia’s Copperbelt. (Image courtesy of Barrick Gold.)
The Lumwana copper mine is located about 100 km west of Solwezi in Zambia’s Copperbelt. (Image courtesy of Barrick Gold.)

Gold giant says that while it continues to engage with the Zambian government and community stakeholders about a mutually-beneficial way forward for its Lumwana copper mine, it would consider selling the operation given the “challenging conditions” it’s facing.

Barrick said finding a win-win solution between the industry and government would increase investor confidence in Zambia and safeguard the long-term prospects of its mining sector.

Following the first Lumwana board meeting after the merger with Randgold, Barrick’s chief operating officer for Africa and the Middle East, Willem Jacobs, said the company understood the Zambian government was under pressure to increase its revenue.

Barrick, which recently completed $6 billion deal to buy rival Randgold, said it is continuing to engage with the Zambian government to find a mutually beneficial solution for the operation of the mine in the wake of the new tax changes.

But he noted the planned tax changes would put Lumwana in a difficult situation.

“The proposed changes to taxes and royalties would imperil the mine’s ability to sustain returns to all stakeholders, such as the significant contribution of more than $3.3 billion it has already made to the Zambian economy over the past 10 years,” Jacobs said in the statement.

“Given the challenging conditions the mine was facing, all options would have to be considered,” the company said in a statement.

But Barrick said the media reports about the sale of the business were untrue but that given the challenging conditions the mine was facing, all options would have to be considered.

Zambia, Africa’s second-largest copper producer, increased this year its sliding scale for royalties of 4% to 6% by 1.5 percentage points, and introduced a new 10% tax when the price of copper exceeds $7,500 per tonne.

The nation also plans to replace value-added tax with a sales tax by April to help bring down mounting public debt.

Mining accounts for more than 70% of Zambia’s foreign-exchange earnings.

Other than Barrick, companies operating in the southern African nation include Glencore, Vedanta Resources and First Quantum. The latter warned last month it would have to lay off 2,500 workers at its local mines because of the taxes and royalties change. Barrick has announced plans to sell a variety of non-core core assets, cut costs following its acquisition of Randgold.

“Lumwana has made detailed proposals to the Government about a partnership approach which would provide the State with an improved share in the economics of Lumwana without overburdening the mine,” Jacobs said.

Barrick expects Lumwana to produce 190 million-225 million pounds of copper for 2018, roughly half of its total production, according to Barrick’s website.

The company-wide preliminary full-year copper production for 2018 was 383 million pounds, Barrick said in a separate statement.

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45 COMMENTS

    • This mines issue is so complex, it needs sober heads and not airheads like Bowman Lusambo. The mines pay for the best lawyers, accountants and economists. This issue is bigger than the PF-UPND rivalry and it will be wise for Edgar to acknowledge expertise in UPND to help deal with this national issue.

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    • LT Editor who is the source of this story? Please be cautious of your sources intentions and agendas…this very same article is on Barrick Gold Corp.’s website has this headline:
      Lumwana Seeks Long-Term Partnership With Zambian Government –

      barrick.com/news/news-details/2019/Lumwana-Seeks-Long-Term-Partnership-With-Zambian-Government/default.aspx

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    • “Lumwana has made detailed proposals to the Government about a partnership approach which would provide the State with an improved share in the economics of Lumwana without overburdening the mine,” Jacobs said.

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    • I don’t think HH is interested in such business like mines. He likes things like selling insurances or trading in stocks.
      Milupi got rich from ZCCM, let him buy Lumwana.

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    • Zambians need meaningful taxes from ‘its’ mines. You have already made enough. Bola panshi. Tricks won’t help. We wanna tax you appropriately.

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    • @Chilankalipa … Yes, we are ready, willing and able. We need to look at the Sale & Purchase Contract too. This would really be a great move for the smart people of the Zambian Enterprise.

      I encourage Margaret to get the details of this potential sale so we can move in quickly with a transfer to ZCCM-IH account in readiness for a take over.

      Thanks a trillion

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    • Chilankalipa – Please ignore JUNIOR with them its just the same rhetoric and braggadocio he is a Sideshow Bob…good at mouthing about even asking what the asking price is as its Kapenta…you are an investment banker you should know the channels for requesting such info….these are the same Zambians who turn up at events and start waving their BMW car keys.

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    • Ghost Dog – That’s BR Mumba JUNIOR for you willing and able educated fooool clowning about…how is your National Airline going then? The brainchild of the project is nursing a bruised arm after drink driving …convenient excuse to postpone the launch date..really laughable.

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  1. Barrick purchased lumwana mine for around $6 billion from First Quantum.With the current copper prices and mining regime in Zambia,it will sell for much less than that.Only the Chinese would be interested in investing in the mine.
    With the Nkongole Zambia owes China,I’m pretty sure the PF government would revise the taxes downwards

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    • Correction:
      Barrick purchased Lumwana, and Jabal Sayid in Saudi Arabia, from Equinox Minerals…and not First Quantum!

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  2. We need a new breed of young savvy Zambian leaders to tackle this issue…PF are completely out of their depth with managing the economy and Hakiande going by his pronouncements regarding this issue I see the mines continue to enjoy even more taxbreaks and subsidies at the expense of poor Zambians if he ever was in power.

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    • How many young savvy Zambian leaders have the capability to bring in huge investors.What do they have on their CVs to back their capabilities apart from being well known party cadres?What business successes over $100 million + in value can they show as evidence?…..Nothing.
      These are not issues you play with kid gloves.Otherwise we will end up like the DRC which is mineral resource rich but poor.

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    • @4 Jay Jay SPOT ON!! Your proposal applies to the entire spectrum of the economy and politics! We need a “revolutionary” change, new breed of leaders, otherwise we are stuck and the only changes we will be seeing is degeneration of our socio-economic and political indicators!!

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    • Whose talking about investment here …am talking about how to play this boardroom chess games. By Savvy I I mean getting the best out our resources for all to benefit.. do you think Tswanas were savvy investors before they discovered diamonds? They were all cattle herders …back in the 90s and 00s most universities in the UK were full of govt sponsored international students on courses to help manage and build their country. Today you will find non or few of them in universities abroad as they dont need to as everything is now at home. Today you will find Diamond cutters in Botswana…

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  3. Government must not just be a spectator in the sale. The mining license must be withdrawn and ensure that these guys don’t sale the mine to themselves. The Chinese will be better option otherwise the MNC are very manipulative.

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    • You always look to the Chinks for everything including selling of strategic assets ..you forget that you owe them big time and the debt is mounting in the region of billions of dollars…all China has to do is sit back and watch you drown in your own greed and recklessness then come and grab everything when you fail to pay them.
      China has shown a growing interest in the mining belt of central southern Africa, comprising Zambia, Tanzania, and Mozambique. This area is well endowed with copper, iron, gold, manganese, and other base metals.Of these three countries, Zambia has the most advanced level of Chinese engagement. China has secured direct equity interests in copper, coal, and manganese reserves. The purchase of an 85% stake of Chambishi copper mine for about US$20m in 1998 was one…

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  4. I think time ZCCM-IH increased its influence in the ownwership and running of mines.When Barrick are ready to sell LUmwana, the new owners must be equal partners/shareholders with ZCCM-IH as part of the deal to let go of the mine.

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    • LT Editor who is the source of this story? Please be cautious of your sources intentions and agendas…this very same article is on Barrick Gold Corp.’s website has this headline:
      Lumwana Seeks Long-Term Partnership With Zambian Government –

      barrick.com/news/news-details/2019/Lumwana-Seeks-Long-Term-Partnership-With-Zambian-Government/default.aspx

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  5. Investors are blackmailing government
    Over taxes.Now they don’t want to pay
    The new tax so they are playing their games so that government can withdraw
    The new tax.

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    • Your govt is fooooolish led by a dull lazy man…they have put all their eggs in one basket..instead of investing Agriculture they are constructing expensive roads that last one rainy season and procuring VVIP jets.

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  6. “Let them handover the mine to the government” says an ignorant person who has no idea how much these investors have put in and how many families are handsomely benefiting from these mines.

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  7. Gold giant says that while it continues to engage with the Zambian government and community stakeholders about a mutually-beneficial way forward for its Lumwana copper mine, it would consider selling the operation given the “challenging conditions” it’s facing. Barrick said finding a win-win solution between the industry and government would increase investor confidence in Zambia and safeguard the long-term prospects of its mining sector.

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    • Exactly ..read between the lines this is simply posturing if these guys want to sell you would be reading about it as breaking news…

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  8. Its very clear that these mining investors are having merry time in our country taking advantage of the weak and sleepy systems. Am beyond doubt convinced that there are no specialised units in Zambia to monitor how much of our minerals are mined and declared. There is serious under declaration of these high grade commodities and precious metals. Honestly, how can the whple Barrick mining giant only contribute 3.3 Billion dollars to the treasury in TEN SOLID YEARS? Where are the experts, ZRA special agents, where are they? We cant continue to allow these mining giants to hold us hostage, NO! And yet some opposition fool is even bragging that the mining giants wants him to be president of Zambia, sick! Please guys lets woke up and get what is due to our country. HH is a silly twit, who…

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  9. HH is incompetent and only serves his pay masters who are Anglo America. Sorry bwana, we know too much about you and the country cannot risk msking you watch over its resources.

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  10. Zambia lacks leadership. I don’t even know what will happen after PF has finished destroying our country. HH and his life position in UPND is even worse than ECL. The man is intoxicated with power and just dreams of state house nothing else. He still believes that one day the court of law will declare him a president. The proposed tax is the best for Zambia but the mines are just taking advantage of confused politicians who are desperate for power. Unfortunately, it will take long for Zambia to have a political party with genuine intentions. UPND has no agenda for the people of Zambia but for HH only. How I wish General Godfrey Miyanda had popularity. Very good man.

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  11. Jay Jay my man I notice u have always called ECL lazy,but thats not his biggest weakness
    The job is just out of his depth
    The office by far outmatch his limited abilities to be a President
    Just thought I should clarify

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  12. What is important is to give people their benefits rather than hiding in the name of merging while the mine has been sold.These investors shouldn’t bring issues in this country let them give what belongs to their employees and government will engage other investors just like Barrick came.Why should we be begging for them after all they’re leaving ditches in our country.

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