The Zambia Chamber of Mines has described the production challenges faced by several mining companies as effects of the newly implemented new tax regime which it had objected at inception.
Speaking in an interview with ZANIS in Kitwe today, Chamber of Mines President Goodwell Mateyo said if government does not relax the tax policies, some mining companies will not be able to operate beyond this year.
Mr. Mateyo noted that some taxes such as the tax on importation of copper concentrates and the export duty had paralyzed operations of mines such as Konkola Copper mines, Chambeshi Metals and as well as Mopani Copper Mines among others.
He said mining companies that rely on imported copper concentrates were now failing to produce as importing concentrates has become unattainable.
He cited Chambeshi Metals which has completely halted its operations due to failure to import copper concentrates from the Democratic Republic of Congo.
The Chamber of Mines President said the introduction of Sales Tax which was non-refundable was also retrogressive to the mining companies.
He urged government to relax some tax policies to ensure the survival of the mining sector.
He said the relaxation of tax policies should include removal of the import duty on copper concentrates so that mining companies relying on imported concentrates can continue to import and sustain their production.
Mr. Mateyo further urged government to rescind its policy on replacing Value Added Tax by Sales Tax which is non-refundable among other measures.
Most copper mines on the Copperbelt are struggling with production and have resorted to implementing hush austerity measures which are detrimental to workers.
One of such mining companies is Konkola Copper Mine which has frozen all promotions, payment of overtime and weekend allowances among other incentives.
However, Mines Minister Richard Musukwa said government will not accept such austerity measures by KCM which deprive workers of their rightful employment privileges.
Mr. Musukwa said the austerity measures implemented by KCM do not promote production as required in mining because such allowances were the ones that motivate workers to increase production.
However, KCM heavily relies on imported Copper concentrates for its production.