Thursday, March 28, 2024

Zambia’s mining environment pressurises mines

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Nathan Chishimba
Nathan Chishimba

LUMWANA Mining Company Limited (LMC) has reiterated that the country’s operating environment for the mining industry has become immensely stained and placed the company in a challenging situation.

Executive Director Nathan Chishimba told North-Western Province Permanent Secretary Willies Manjimela recently said that particularly 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.

Speaking in an interview, Mr Chishimba said because of the stained mining environment sector in Zambia, LMC was trying to work through a survival mechanism in order to remain a key partner of Government in the developmental agenda.

“Lumwana is going through some hard times because the operating environment for the mining industry has become stained, so we are trying to work through a survival mechanism because Lumwana is there to mine as a partner of Government for the long-term,” Mr Chishimba said.

The whole challenge of creating an environment conducive for progress was on two parties, the Government side and also the mine side.

“We are still hoping that going forward together as a mine and the Government we can reach an understanding that will create that conducive environment that will allow the mine to stay afloat, expand and do more for the community,” Mr Chishimba enthused.

Asked whether there had been any satisfactory consideration of the mines’ concerns over the proposed changes to taxes and royalties in the 2019 national budget, Mr Chishimba said what would be ideal to avoid a lot of pushing back and forth was for Government to involve the mines and other key stakeholders before arriving at some of the measures that impacted the sector.

“If you look at the world practice, when you do a fundamental review of the taxation regime and indeed any element of the regulatory policy, there is always a phase which you go through, the stakeholder consultation. Sadly in this case that was not the case.

“Be that as it may, we have engaged with Government and they are showing signs that they are willing to talk to us on how best we can move forward without necessarily disrupting our operations,” Mr Chishimba added.

He added that the mining industry would love the issues surrounding the proposed changes to taxes and royalties by Finance Minister Margaret Mwanakatwe to be resolved faster; but they understood Government operated under difficult conditions at times which LMC and other players in the industry respect.

Mr Chishimba, who is also immediate past Zambia Chamber of Mines President said LMC was continuing to engage with the Zambian Government and community stakeholders about a mutually-beneficial way forward for the operation.

LMC, a copper mining company owned by Barrick Gold Corporation is situated in the North Western region of Zambia.

It is a multi-pit, multi-staged operation mining approximately 100 tonnes of ore and waste per annum and producing copper concentrates containing an average of 120,000 tonnes of copper metal per year over a 20-year mine life, making Lumwana the largest single open cut copper mine in Africa.

In January 2019, Barrick’s Chief Operating Officer for Africa and the Middle East, Willem Jacobs said Lumwana had made detailed proposals to the Zambian Government about a partnership approach which would provide the State with an improved share in the economics of Lumwana without overburdening the mine.

“Finding a win-win solution between the industry and Government would without doubt increase investor confidence in Zambia and safeguard the long-term prospects of its mining industry,” Mr Jacobs said in a statement on January 21.

He described as untrue media reports that Barrick had sold Lumwana, emphasising however that given the challenging conditions the mine was facing, all options would have to be considered.

9 COMMENTS

  1. All this is bcoz of an inefficient inept and corrupt government that has failed to assemble a reliable team of technocrats to meet these mines head on to shut them up once and for all.They are complaining but at the same time increasing production since they are reaping more profits!! Pliz don’t grow if that is what it takes to pay right taxes so you don’t exhaust our minerals for nothing!!

    • Which technocrats are you talking about? You mean Charles Milupi? Have you worked for ZCCM or its predecessors? If not ask me to give you kadyonko.

    • Nathan said and I quote “… such as the significant contribution of more than $3.3 billion it has already made to the Zambian economy over the past 10 years.” End of quote.

      The question is to whose benefit has the $3.3 billion been? How much tax revenue have we received commensurate to that investment versus how much profit has been realized by Lumwana instead.

      Numbers don’t lie and it is irrelevant to throw them out there without the right context. The bottom line is how much of that investment has benefited the treasury and the common man on the streets.

      That’s the $3.3 billion question, Nathan needs to answer here.

      Epo mpelele,

      BRM

    • @1.1Ndanje,beyond those you may know like Milupi ( who I hear is an Electrical Engineer),there are Zambian experts working in other key mining countries like Australia,Canada,S.Africa,Namibia,..who can help out the country as patriots when requested to do so!!Could you kindly download your think I!?

  2. You and your friends advised government to sell the mines and assured that, that way the mines would effectively and efficiently contribute to national development. All we hear are excuses.

  3. What’s shocking is that some mines claim to have remained in red since 2002, can they explain why they are operating? The Lumwana sale left us very embarrassed because it was concluded offshore and GRZ never collected any tax. At the time it was hailed as the world’s biggest single transaction. No one has been held accountable.

  4. “Speaking in an interview, Mr Chishimba said because of the stained mining environment sector in Zambia, LMC was trying to work through a survival mechanism in order to remain a key partner of Government in the developmental agenda.” These Idyoots can continue working on the survival mechanism.

  5. This Chishimba chap started crying when he was at the Chamber of Mines. I am surprised Lumwana has recruited him as their director. The chap is the most unpatriotic Zambian I have ever seen

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