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Govt not dragging feet over mineral royalties - Magande

Govt not dragging feet over mineral royalties - Magande
By Fridah Zinyama
Tuesday November 13, 2007 [03:01]

Finance Minister Ng’andu Magande has said the government is not deliberately taking its time in finishing re-negotiating the mineral royalties as there are not only legal but technical aspects to consider. Most of the stakeholders feel that the government has unnecessarily taken too long to finish with the re-negotiations and this has cost the nation the much-needed finances. But the government still insists that they are making headway and would like to be comfortable with the outcome of the re-negotiations. In an interview, Magande said it might seem like the government is taking its time in re-negotiating the mining agreements but that was not the case.

“We just want to be extra careful and not do things quickly because the same people who are calling for quick renegotiations will be in the fore-front of condemning government if things are not properly done,” he said.

Magande said the government did not just have to deal with technicalities in the agreements but legal aspects as well, which could not be hurriedly done.

“We have to deal with the mining companies on an individual basis as there are different needs that have to be addressed like the lifetime of the individual mines and the different minerals found in each mine,” he said.

“We need to understand what is happening in order to fit things in the right framework.”

Magande added that the government would have to deal with about 12 mining companies on an individual basis and deal with their individual peculiarities.

“We have to consider how the review will most importantly affect production and how much the mining companies would be required to pay in terms of taxes,” he said. “Eight of the twelve mining companies signed the agreements before the prices went up.”

Magande said these were the issues that were causing the government to take its time in finalising the re-negotiations.

“And we have to find specialists who help us to adequately deal with the issues,” he said. “We would like to feel comfortable with the outcome of the re-negotiations when they are finally concluded.”

Magande said the process might seem to be taking long at the moment but that things would be quickly done when the technicalities and legalities were dealt with.

And finance deputy minister Jonas Shakafuswa disclosed that most of the mining companies had agreed to re-negotiate the mining development agreements with the government.

“All the mines had agreed to come on board over the renegotiation for new mineral royalties,” he said. "People were saying that we were taking too long to start the negotiations for the increasing of royalties. We had to prepare ourselves. Those guys have international lawyers and if I take my permanent secretary for budget to go and negotiate, he will just be torn to pieces by the international lawyers.”

Shakafuswa said in order to make the experts on the Zambian side ready, the Norwegian government has rendered us some assistance.

“They gave us help to understand how to go about and negotiate and what I have gathered is that all the mining companies have agreed to come on board,” Shakafuswa said.

"We don't foresee any problems ...when the companies were coming into Zambia, they were telling us the prospects of getting copper and selling it was very expensive and they would not make a profit in a very long time but the trend has changed. When we negotiated the mining development agreements at the time, prospects were grim but now since the prospects are bright, we expect them as well to honour and give respect to the people of Zambia.”

Pressure has been mounting on the government by stakeholders to quickly finish re-negotiating the mining agreements if the country is to benefit from the peak copper prices the industry is experiencing on the international market.

Labels: DEVELOPMENT AGREEMENTS, MAGANDE, MINING CONTRACTS, SHAKAFUSWA

posted by MrK @ 6:09 PM