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Alba Iulia
Sunday, February 5, 2023

3.1 percent mineral royalty from Kansanshi mine inadequate – Christopher Kang’ombe

Headlines3.1 percent mineral royalty from Kansanshi mine inadequate – Christopher Kang’ombe

Patriotic Front Kamfinsa Member of Parliament Christopher Kang’ombe says the Zambian government should not surrender their 20 percent shares in Kansanshi mine, and they should not agree on getting a 3.1 percent mineral royalty payment as it is an inadequate percentage with a limited impact on the economy.

Mr Kang’ombe disclosed that if the government is saying they will no longer be claiming dividends from Kansanshi mine but they would rather be getting 3.1 mineral royalty, then the government through ZCCM-IH should have come out in the public to state that they are having problems of getting dividends from Kasanshi mine and that they are proposing a royal system where they claim a royalty of 3.1 percent, adding that the government should have negotiated for a much higer percentage such as a 10 percent royalty instead of a 3.1 percent royalty as this will enable even the Ministry of Finance and National Planning to fund all those gaps that they claim to have in the budget.

“We are dealing with an issue to do with mining taxation, where we need to look at things such as the formula which will give the Zambian government and people more revenue, we don’t have to just fold our arms and say the best we could get out of Kansanshi mine is 3.1 percent mineral royalty or we tell the government that the 3.1 percent is not adequate as this will be my argument in Parliament that if ZCCM-IH has failed to get a good deal out of the Kasanshi mine, then they should let us assemble a different team or they should tell us what they think should be done to get a better deal out of Kasanshi mine,” he said

He has since urged President Hakainde Hichilema to engage ZCCM as to whether the 3.1 percent is the best that can be acquired out of Kansanshi mine, and if they could negotiate for more and also compare with other countries where a royalty is paid as opposed to a dividend as the mines manipulate figures by stating that they did not make profits.

Mr Kang’ombe explained that there are two shareholders in Kansanshi mine, ZCCM-IH which looks after the interest of the Zambian government in all the mines where they own 20 percent shares and First Quantum Minerals – FQM owns 80 percent, adding that about three years ago, FQM attempted to buy the 20 percent shares where they offered the government by stating that they are having challenges dealing with how much they should be paying the government for the profits they make as a business, hence, ZCCM-IH took FQM to court with the complaint that the mining investor are not paying them dividends which are share of the profit, and FQM has not been paying the right amount of dividends to ZCCM.

He further explained that the Zambian government rejected the proposal to sell their shares to FQM through ZCCM.
Mr Kang’ombe stated in an interview on Millennium TV that ZCCM is holding the shares in Kansanshi on behalf of the Zambian people and whatever money comes out of Kasanshi should be able to do certain activities in the economy.

“There are indirect benefits from the mine such as job creation, but at the end of the day Zambian government needs money in the budget that will enable them to provide health care and many other things that are needed,” he said

Meanwhile, Mr Kang’ombe disclosed the that there are a number of challenges such as the late delivery of farming inputs in the rural part of the constituency, water problems because of old infrastructure as he hopes that in the coming year the projects that started and where stopped because of inadequate funding, will be resumed, high cost of living and high fuel prices and its impact on the businesses.

“Under the Constituency Development Fund – CDF projects, we have embarked on a water project in a area called Zamtan that used to be an unplanned settlement which has been upgraded, and industrial boreholes will be put up, the water project will also be piloted in an area called Ndeke village by helping Nkana Water to replace some water pipes which will enable people in the area to have access to water,” he said

“A bridge that will connect Mulenga compound and Ndeke will be constructed, this commitment has already been made and money has been paid as works on the bridge are scheduled to start before the end of this year,” he added

Mr Kang’ombe mentioned that he has advised the Ministry of Local Government and Rural Development to quickly amend the CDF Act where the this law will be changed and structured in a way that they do away with some stages that lead to the delays of having the projects moving.

Mr Kang’ombe stated that all the 2021 CDF projects are under implementation and the 2022 CDF projects for the first and second quarter are also under implementation, as they are now looking at the third and fourth quarter as they are hoping for the funds to be released on time to avoid further delays next year.

8 COMMENTS

  1. I am still not convinced that the route the government has taken is the right one. 3.1% sounds a bit too low, even if it guarantees regular payments from the mine. I know and understand that there are so many parameters involved before any company let alone a mining one, can declare profit and thereafter dividends to pay share holders. So this route looks much more stable but the rate of royalties are quite low.

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  2. Second point. Zambia has so many mineral deposits including copper. Why have Zambians not developed them and alway cry on what has already been developed ???

    Go develop new mines with no foreigners and get 100% profile. The real answer is it is not possible for Zambians to develop new mines without foreign capital.
    This is now a boring subject

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  3. Just load-shed them and they will quickly run to the table to negotiate. You give them 100% and expect miracles?

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    • During the previous government the patriotic front used to have 20% share. Now this new doom government wants to negotiate for a 3% my foot, this new doom government doesn’t have the interest of the nation at heart honestly if they have they could push for an increment from 20% to 30%-35% currently mining firms are getting minerals for free. I think the patriotic front have a heart of this nation. If mining firms are not making profit they must go. Why are they not going in the midst of not making profit.

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  4. The truth. what is the truth?
    Is royalty tax mutually exclusive to shareholding?
    Why cant PPP model be used here?
    Is this a win-win deal or FQM is celebrating in the background that is has done a silent take-over?
    Where is the parliament not the MP. Bwana MP you have the parliament forum not LT.
    Please.

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