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Prof Saasa urges transparency in mining pacts re-negotiations

Prof Saasa urges transparency in mining pacts re-negotiations
By Joan Chirwa
Tuesday May 29, 2007 [04:00]

An economic and business consultant has urged the government to be transparent in its re-negotiation of the development agreements with mining companies. Professor Oliver Saasa of Premier Consult Limited said the government should spell out its procedures in the re-negotiation of development agreements with mining companies for a wider input among stakeholders.

He was commenting on the announcement by Konkola Copper Mines (KCM) that it was ready to meet government if the state wants to re-negotiate the mineral royalty taxes on mining companies.

Metorex-which has its operations at Chibuluma Mine-earlier indicated that it may agree to a tax on windfall profits from its Zambian assets following discussions with President Levy Mwanawasa.

“Government has not yet come out publicly on how it wants to go ahead with the re-negotiation of the development agreements. What is important is to have clarity on the issue,” Prof Saasa said.

He said the decision by KCM and Metorex to agree to re-negotiate their development agreements with the government was commendable.

“The mining companies have been quiet over this issue and you may wonder why. I think it was a good decision for them to do things quietly,” Professor Saasa said.
He cautioned government and other stakeholders against treating mining companies in a way that would portray them as ‘culprits’.

“Again, the fact that KCM has agreed to meet government for the re-negotiation of the development agreement with government does not mean they will accept the proposals for an increment in taxes,” Professor Saasa said. “The development agreements signed earlier tied the hands of government…but government now has to be very careful in handling this issue.”

KCM director of operations CP Baid told a parliamentary committee on Mining and Economic Affairs that visited the mine on Friday that his company was ready to renegotiate mineral royalty taxes.

And Metorex chief executive officer Charles Needham was quoted by the miningmx.com as saying: “In an environment of super profits, after recovery of investment, consideration would be given to windfall tax linked to the copper price.”

On Sunday, University of Zambia Development Studies lecturer Dr Francis Chigunta said the current investments in the mining sector were a systematic looting of Zambia’s resources hidden in development agreements.

Labels: KCM, METOREX, MINING CONTRACTS, OLIVER SAASA, WINDFALL TAX

posted by MrK @ 5:09 AM