Mines and Minerals Development Minister Hon. Richard Musukwa, has told the Europe’s largest Mining and Investment forum that the Zambian Government takes a strong exception to safeguard the prudent management and development of the country’s finite mineral resources.
Speaking on a panel of discussion at the Mines and Money Conference in London, the Minister told the conference that “Government has no intention to nationalise the mining sector and the economy in general. But for a long time, we have let investors take advantage of us, and it is time for us to stand up and ensure that we protect our people and our country.”
Mr. Musukwa further stated that the KCM issue has nothing to do with politics as being reported by some people, “but that the multinational company failed to inject the capital outlay that was projected in the investment portfolio”.
And Vedanta Zinc International Chief Executive Officer Deshnee Naidoo who is also attending the Mines and Money Conference in London said Vedanta and the Zambian Government were in a difficult situation as regards to KCM.
Ms. Naidoo said Vedanta will continue to work towards engaging with the government as the first recourse in finding a solution to the current avenues at play which is largely court cases within the country, as well as an International arbitration case that is currently going on.
Former KCM CEO Deshnee Naidoo said communities and government who are affected stakeholders have to come together and engage.
“When I came to Zambia, I came into a country that was financially stressed and as such I found more of aggressive budgetary stance were taken. What I have found out is that the Zambian government was willing to engage,” she said.
However, Mr Musukwa stated “Government has followed due process in effecting the winding up. The procedures employed are in accordance with our Corporate Insolvency Act, which is similar in most respects to the Act in the UK. If it was Government’s intention to nationalise the company, it would have proceeded by way of compulsory acquisition and keep the company for itself.”
“We would like to see a smooth transition of exit modalities with Vedanta because they were our long-standing partners whom we have embraced in our country for a long time. Zambia welcomes all investors, we will continue to run and operate the mining based on private led sector initiative” he added.
And responding to Former KCM CEO Deshnee Naidoo who said that during her tenure the Zambian government was owing mining companies a significant amount of backlog VAT, and accusing mining companies of not being transparent enough in terms of Taxes and royalties, Hon. Musukwa responded that the failure to pay the vat refund was necessitated by mining houses failing to provide data where they sold the product.
“Can you tell me a situation where you can have a mining entity, they sell Copper, they do not have the documentation of where they sold the Copper and we should refund that kind of operation? Not at all, we would like mining houses to come out clean, be open and transparent and ensure that they are our partners, Government remains committed to ensuring that we provide a fascial regime that is simple, predictable, stable and also anchored on the rule of law”, he added.
Mr. Musukwa said the last time KCM developed or produced their own material was in 2014 and they have been relying on scavenging around for materials from dump sites, something which the Minister said government could not support coming from a multinational company like Vedanta.
“You will be interested to know that in fact when we sent several default notices to them, they committed to a business improvement plan, which they lamentably failed to implement. The turnovers for the CEOs for KCM was actually between 3-4 months in fact, Deshnee was the best CEO that we had and we thought she would stay longer to transform KCM,” he said.
The Minister further added that Government hoped to see more responsive investment in terms of changing people’s lives, as the poverty and squalor associated with host communities where mining operations take place cannot continue to be business as usual.
He said responsible mining is a matter that provides benefits to the local people and the Zambian Government will not shy away to demand the best for its people from mining corporations.
Good nationalistic words by the minister but not advisable when you are desperate for investment.
You don’t issue what seems nationalistic tilts , you let them come in with their money but enforce your laws to the letter.
Well spoken Musukwa. Bold, and full of data. That is the kind of talk we need. But more than just talk we need action. We need honesty. We need competence. We need direction. So far, the actions of PF have only shown greed, corruption, incompetence. If only the sensible words you speak on these very rare occassions would be what drives your actions, our country would be better off. But as it is they remain empty talk.
That’s only because PF government sent ill educated unskilled negotiators to sign very complex deals.
Don’t forget the mines where negotiated by Levy Mwanawasa
On failure to pay VAT refunds..
“Hon Musukwa responded that the failure to pay VAT refund was necessitated by mining houses failing to provide data where they sold the product.”
So all along the GRZ did not know where copper and minerals were sold?Then how was taxation done without providing necessary sales data? Is this what the Chamber of mines has been defending?And the new Finance Minister was happy to continue with such a system without necessary reforms?No wonder they were against Sale Tax because Sales Tax requires disclosure of point of sale.
Pass a law that will compel mines to bank all proceeds from the minerals sold in the country where its mined to stabilize the local currency.
Why would a foreign investor want to leave the money in Zambia? Think about it
The Banking of Mineral Proceeds in Zambia is the cardinal point in the sovereignty of a country.
The mining houses will still be allowed to externalize the profits.This law must be PASSED without further hesitations.Once Minerals have bee sold anywhere in the world,such sale proceeds must without delay be brought back to Zambia.
@ ATASE:
There are several benefits that would accrue to mines banking their proceeds from mineral into the Zambian banking system among them is a stabilization of the Zambian Kwacha. Every time BOZ offloads USD on the Zambian financial market, the kwacha picksup and competes favorably against major currencies.A stable currency is good for business planning and execution of those plans. Am that helps you to understand. Furthermore, more money in the Zambian banks would also many make it possible for small businesses to borrow, grow their businesses and pay taxes to the government.
Only reason you visionless P.F Gundwane’s have put the Nation in this position is because you only think with your Bellies + M@t4ko, & all that’s in your rott3n corrupt heads is campaign, campaign campaign, plunder & more plunder.
You were happy with being cheated as long as you got your silly campaign funds, & never imagined this abuse will one day expose you, & risk your further stay in power so as have perpetual acsess to dip into national coffers without vision, you useless mbava’s!
AT least you spoke sense but let these words be actualized so that we can see local poor people benefit from their God given minerals.
That’s the type of message we should be sending to investors. It is not a crime to claim a fair share of what rightfully belongs to us. After all we own the commodity and all they have are the tools of excavation.
Our crime is that we have failed to harness the power of resource management by finding our own means of extracting, processing and trading minerals, thereby failing to influence the international supply-chain. We would therefore be well advised to nationalise at least one or two mines until such a time that we are able to manage them on our own. This will not only be a reserve for future generations but also a spare key to unlock economic growth.
Boi, you better invest and manage the mines yourself. Then you will have nobody else to blame.
You are failing to run a council and you expect us to run a mine @ former mine supplier
we can do it the,the problem is that we always rate ourselves very low as if we can not forge ahead in the things that we can try and do.why? we have very educated people in our country with the muscle to drive this country to higher heights but look at the professors we have,enginers,doctors mmmmm very shameful. Its time to wake up and aligne ourselves to the status call. Stop complaining bring solutions to the table. alaaa iweee