9.5 C
Alba Iulia
Monday, June 27, 2022

It doesn’t Make Sense to give Tax Breaks and Other Unnecessary Incentives to Mines

Columns It doesn't Make Sense to give Tax Breaks and Other Unnecessary Incentives...

Fred M’membe President of the Socialist Party

There is really no need to be in a rush to give away our minerals to foreign transnational mining corporations for next to nothing. Anglo American, Anglovaal, Glencore, Vendata and other mining corporations are interested in our minerals because there are gigantic profits to be made now and in the future. The relationship between corporations and the government is not based on any special connections necessarily – although of course they would be happy if the government was under the control of puppet politicians who were in their pockets – their interest is in the profits. The prices of copper and cobalt are set to rise dramatically, and so are their profits. Here’s why:

It takes 180 pounds of copper to make a Tesla or other electric vehicle. This is five times the amount of copper needed to make a combustion engine motor vehicle. It takes 450 pounds of copper to build a normal house, once you include electric appliances, wiring and fixtures. If you put solar panels on it that will take another 100 to 150 pounds of copper wiring. A solar farm used to generate energy requires five times the copper it takes for an equivalent natural, coal, or nuclear power plant.

• If we are going to turn our cars into electric vehicles, we are going to need a lot more copper over the next ten years.
• If we are going to build houses for all the millennials – the largest generation on the planet – we are going to need a lot more copper.
• If renewables, such as wind and solar power, are used to build those things and supply energy then we are going to need a lot more copper.

This red metal is sometimes called Dr Copper because it has an uncanny ability to predict recessions and economic booms. The reason for this is that we unlikely to go into recession when we are in a building boom, whereas we are more likely to when we are not. Industry, factories, homes, appliances and cars, all require copper, and that is never going to change because, if you look at the periodic table, you will see that there is no alternative to copper, except for silver. Silver conducts electricity better than copper but because it is so expensive it will never serve as a viable replacement. Plus, global copper reserves are estimated to be around 870,000,000 tonnes, whereas silver reserves are put at 530,000 tonnes.

Let us take this conversation further. Statistics show that 20 percent of the world’s population uses 50 percent of its copper; 13 percent of the population has no electricity; three out of four people on the planet – 75 percent – don’t have access to a car; so, if the 80 percent of the world that doesn’t currently use that much copper starts to do so as a result of increased energy needs – by buying appliances, electric cars, building houses and so on – then we will see a significant increase in the demand for copper. The price of copper, even though it has risen, will be so much higher when that demand increases.

And there is another factor. The EU has reacted to Russia’s war with the Ukraine by feverishly moving towards renewable energy, which, as we said above, requires five times the amount of copper as other energy sources. This will also spur the demand for electric vehicles. While recycling can meet up to 35 percent of current global copper consumption, we don’t have enough copper to recycle to satisfy increased renewable energy demands, plus, it takes a long time to bring copper mines online – around five to 10 years to market.

The upshot is that the demand for copper is going to increase significantly and so is its price. Under these circumstances, it doesn’t make sense to give tax breaks and other unnecessary incentives to transnational mining corporations. Why would we do that? We certainly would not be acting wisely. I can think of no reason why a government would do it, unless it was out of acting out of ignorance or corruption.

7 COMMENTS

  1. It only makes sense to a capitalist chola boy like hh who is an agent of the imperial babylonia. He undervalued and sold our mines and parastatals for peanuts to get kicks backs. He now claims to be a self made millionaire. Chicarla chakwe

  2. Fred is a critical thinker but unfortunately his line of thought can’t find space in the UPND puppet regime. We have a brainless idyot as Minister of mines who’s convinced that Zambia will develop through dumpsites. There’s no hope

  3. People like Fred are great theorisers.
    To develop all these things he is talking about takes money and skills to develop. Does Zambians have those? No they do not.

    If left to Zambians nothing will get done.
    Therefore you have to give incentives to others, but you need to have people who can undertaken proper negotiations and do not take bribes. You Zambians and the rest of Africa are known for bribe taking.

    Further, you country is broke (it owes massive amounts to others) so therefore, you do not have the means develop the things Fred is writing about, so the choice is either leave the minerals in the ground or get others to help get them out and when they come they can create employment and then eventually get Zambians to invest and start companies.

    1
    4
  4. Says the guy who enjoyed illegal tax breaks under Michael when he owned The Post …really laughable…I understand Fred is mobilising his party well with the grassroots, fortunately for him the younger generation dont know him well I for one can never take him seriously.

  5. The lie that’s been peddled and believed b7 the gullible is that Zambians don’t have money and expertise to run mines. FQM started by washing slimes for gold, copper and cobalt at Bwana Mkubwa. Agarwal came with an empty briefcase and found stocks worth more than $25M which he used to buy KCM. Equinox spent many years of exploration and when Syamukayumbu Syamujaye went to inspect after a public outcry he found them mining gold and diamonds. How much did they declare on arrival at the Investment Center? Who’s UPND trying to deceive? It’s their time to cut deals but fikapwa

  6. #2 You have made my day….dump site dumbness. Sources say he’s got vested interest in the dumps through proxies. It’s just a matter of time we shall see the whole thing blow back in his face.

Comments are closed.

- Advertisement - UNICAF

Latest News

RUGBY :Arrows Bury DIGGERS to Cement Top Spot

Defending champions Red Arrows consolidated their stay at the top of the National after thrashing Diggers 33-08 in Lusaka...

More Articles In This Category