The shares of First Quantum Minerals Ltd, which accounts for more than half of Zambia’s copper production, gained as much as 4.9% in Toronto after Finance Minister Situmbeko Musokotwane told parliament in his budget speech yesterday that the government will make further cuts to copper mining royalties.
In his budget address to parliament, and in a move seen to incentivise mining output, Dr Musokotwane said that restructuring the royalty system will cost the government K2.8 billion in lost revenue next year.
Currently, Zambia uses a sliding scale mining royalty system based on the copper price and under the planned changes, charges will apply on the incremental value in each adjusted price band, as opposed to the aggregate value, Dr Musokotwane told parliament.
In his speech Dr Musokotwane said said that the government plans to spend K167.3 billion kwacha in 2023. About K111.6 billion of that will come from revenue, and the rest from grants and borrowing.
The Minister further said that while K18.2 billion was allocated to external-loan servicing next year, that doesn’t take into account debt restructuring and will be subject to change once the agreement is reached with creditors, he said.
The government has so far made slow progress in efforts to rework its external liabilities that totalled $17.3 billion last year. It’s using the Group of 20’s Common Framework to engage with creditors — a template that required the nation to seek help from the International Monetary Fund. The government has been given assurances by an official bilateral creditors committee that they’re ready to negotiate, thereby unlocking a $1.3 billion IMF bailout.
The government now needs to negotiate with official bilateral creditors a memorandum of understanding for the restructuring, and seek comparable treatment from commercial lenders, including the holders of $3 billion of outstanding eurobonds. The government needs $8.4 billion in debt relief through 2025, according to the IMF. The World Bank said this equates to a 45% cut in net present value for creditors.
These are fools who have no heart for the nation and it’s people. Meanwhile the price of Electricity, Water, fuel, pay as you earn will be increased which will lead to suffering of many Zambians while mining companies owners are smiling. What a useless heartless government…
It’s up to you Zambians; do you want the product in the ground or do you want it on the world market?
A SHREWD SPECULATOR WHO BORROWED FQM SHARES, AND ALSO SOLD THEM IN FUTURES, BEFORE THE BUDGET ANNOUNCEMENT IS NOW LAUGHING ALL THE WAY TO THE BANK.
THIS IS CALLED SHORT SELLING IN THE JARGON OF COMMODITIES AND FINANCIAL MARKETS
A shrew calculator can only be the big boys and girls in Zambia like the rich HH7 and Minister Bo Situmbeko…on second thoughts its not shrewd its criminal. The rich are getting richier whilst the poor are being taxed to death…why can the mines just pay their share? This is the same thing Dictator Paul Kagame was staing we have mineral resource rich countries like Zambia that are giving tax breaks to mines when they need the funds more and their people are in abject poverty.
All profits going to the multi national abroad
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Immediately it stated “Single Caucasian British women: free” I knew exactly who this UK based blogger is..its the same dullard that keeps reinventing its self every 5 years. It gets playing one thing moves to the other ..it was N@z got bored moved to the impostor KZ then now this its motive is the same its to troll. Time to grow up you silly shameless sausage.
Sir, you seem very upset. It is only a mere event that no one has forced you to attend. Don’t stress yourself unnecessarily.
We are not clear what your comment is about. Are you OK sir?
Who are you and why are you posting comments in the name of Patrioti Front UK – Branch when you are not member. Please stop.
No one has been authorised to post comments by the branch.
MRT in Zambia was between 5.5% to 10% based on sales (even when sold at no pfrofit).
In Congo DR , the same tax is at 2% to 3.5%. Ours has been unsustainable.
To produce 1 tonne of copper in Zambia, a miner would spend about US$1,000 more than it costs to yield the same tonnage in Congo DR.
Our country has set an ambitious lower limit of 3000 metric tons per year in competition with Congo, who are at 2500 tonnes per year.
Such measures make that target achievable and a cause for FQML to celebrate.
Kindly break down the components of this production cost you have given us. We need such information.
To produce 1 tonne of copper in Zambia, a miner would spend about US$1,000 more than it costs to yield the same tonnage in Congo DR.
Our country has set an ambitious lower limit of 3.0 million metric tons per year in competition with Congo, who are at 2.5 million tonnes per year.
APOLOGIES FOR THE 3 ZEROES DROPPED EARLIER IN THE FIGURES ABOVE.
It was once upon a time Mush0ta, then N3z, to K@izer & now “P.F front -U.K.
It is really a shameless attention seeker, what we call “an Oxygen thief” as it has NO use whatsoever to humanity but taking up valuable 0xygen.
Attention seeking narcissist!
It was 0nce up0n a time Mu2h0ta, then N3z, to K@izer & now “P.F fr0nt -U.K.
It is really a sh@meless attenti0n seeker, what we call “an 0xygen thief” as it has NO use whats0ever to humanity, but taking up valuable 0xygen.
Att3ntion seeking n@rcissist!
Minister Situmbeko Musokotwane, te lyashi lya kulanda pabantu. Paul Kagame is disapprovingly shaking his head.
Zambias president is definitely the darling of western countries. Non of these countries will ever condemn him for any human rights breaches. Well done sir…. now we can get any loans we ask for.
Good budget . I don’t know why people are crying foul on reducing mine royalties .making the loss of k2.8 billion. Read the budget these will be recovered by the increase in paye tax..the crease of k300 will have more being tax. The govt will gain back what they will loss from the mines royalty reduction
Thanks for enlightening us@3Mulongoti Machayi. But generally speaking, is there even any reason for us to be competing with the DRC or indeed any other country in the quantities of Copper produced when we know minerals are wasting assets instead of focusing on how we shall diversify our economy? So far I have not heard of a serious pronouncement with a target on how we shall ensure that manufacturing, Agriculture and tourism start taking over from copper mining!!
I salute you too, Zedyatu for your valued contributions.
The minister talked about manufacturing and agriculture apart from mining.
To open “farming blocks” around the country similar to Nakambala Sugar, Mkushi, Nalusanga, etc. was proposed.
The minister mentioned leveraging on cassava beer to benefit both Zambian Breweries and famers of these tubers.
The LSMFEZ, a centre of manufacturing in Zambia received incentives as well.
Zambia collaboratively with Congo DR wishes to be the hub in the manufacture of Electric Vehicles. Copper, cobalt and nickel are all mined in Zambia and their production must be upped.
What do you think Hare felt when he was overtaken by Tortoise in the racing competition in that “Kalulu na Fulwe” folklore?
Zambia has enjoyed top slot as largest copper producer. It slackened when unpopular taxes like Windfall and Mneral Royalty taxes crept in.
Had there been some good governance in Congo DR, Zambia annual copper production would never have been above Congo DR. Now, that there is good governance, in Congo DR, the reality is emerging. Congo DR has huge copper resources with high grade { Grade 3 to 4 times} compared to Zambia. As of now, whatever technology is employed and capital injection, Zambia would labor to produce 1 million tonnes annually. If Zambia chooses to create disorder in the game reserves, we can go up to annual 1.6 Million tonnes. Instead of manufacturing motors for factories, generators, cable wires, turbines, we are foolishly and unnecessarly competing. Sad, uyu ndani uyu is equipment with praise singer thinking.