Friday, March 29, 2024

Chamber of Mines sees more than 10% cut in 2019 copper output

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Chamber of Mines Zambia President Goodwell Mateyo
Chamber of Mines Zambia President Goodwell Mateyo

The Zambia Chamber of Mines has warned that Copper output in Zambia could fall by more than 10% this year because of new taxes the government has introduced.

While the focus in recent days has been on government plans to liquidate Vedanta Resources Ltd.’s Konkola Copper Mines and bring in a new investor, this is a distraction from bigger problems, the Zambia Chamber of Mines said in an emailed statement on Thursday.

It said output, which hit a record 861,946 metric tons last year, could decline by as much as 100,000 tons in 2019 because of increased royalties and other taxes that were introduced in January.

“The 2019 mining tax regime is distorting behavior,” said Zambia Chamber of Mines President Goodwell Mateyo.

“It is forcing miners to do the unthinkable — to cut production — because many cannot afford to continue producing as before.”

“The KCM story has created a social media frenzy, but it is distracting us from the real issue at play here,” Mateyo said.

“We are concerned about the immediate future of the entire industry. 2019 copper production is now likely to be “drastically lower” than last year.”

Mr Mateyo said the Chamber of Mines will respect due legal process, when commenting upon the legal action taken by ZCCM-IH against KCM, but has cautioned that the unfolding furore risks typecasting all investors, and diverting attention from the issues hurting the entire industry.

“The recent declaration by the Minister of Mines at KCM’s head office in Chingola was reassuring, and we do respect due legal process. But we are deeply troubled by current public discourse, in both mainstream and social media, the content of which is alarming and shows none of the Minister’s moderation. Investors need to see clear and consistent guidance from Government, the ultimate owner of ZCCM-IH, on its intentions and the actions it proposes to take.”

“We must strive for a less emotive investor narrative. Zambia needs investment. The government needs bond holders, businesses great and small need capital, and Zambia’s mines need continuous investment to remain productive. There is a shortage of capital in Zambia, so we must look elsewhere for this investment”, said Mr Mateyo.

“But, this is an opportune time to think about the type of investor Zambia wants to encourage – because not all are alike. We must ensure the business environment in Zambia attracts responsible investors, and it is high time we acknowledge the many players within the mining sector that are the responsible, good corporate citizens we want, and should wish to keep” continued Mr Mateyo.

According to the Chamber, present forecasts are that copper production, both concentrate and finished copper, will now be drastically lower than last year, and could be as much as 100 000 tonnes lower.

3 COMMENTS

  1. The biggest issue we should be discussing in Zambia is proper utilisation of government coffers. Not siding with mining investors whose tax contributions to this nation is way below the expected. The corruption does not only happen with politicians but the biggest is among civil servants and parastatal workers. Who are both employees and suppliers and they do so at exorbitant prices. Eg a rim of paper selling at K50 can be sold at K100 or K120 by a civil servant Supplier. They have built mansions and drive expensive cars through this rot. In addition to workshops allowances and avoidable local and international trips allowances.

  2. Why do you want increased out if they cant pay taxes. The less the better so that we leave resources for our children. I dont think any business responds by cutting down production. SO your insinuations Mr ‘Chemba’ of mines are wrong.

  3. Mr Mateyo is a young educated danderhead who is a surrogate for the mines mascarading as chamber of mines…The mines can still be preserved for the future after all the country is not getting much Zambia can still survive

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