Slow pace of re-negotiating mining deals worries Prof Saasa

Slow pace of re-negotiating mining deals worries Prof Saasa
By Chibaula Silwamba
Friday November 16, 2007 [03:00]

DEVELOPMENT and economic consultant Professor Oliver Saasa has expressed concern at the slow pace in the government’s re-negotiation of development agreements signed with mining companies. In an interview yesterday, Prof Saasa said the government should ensure that the country benefited from the development agreements and mineral loyalties.

“We should push more for the re-negotiation of development agreements than mineral loyalties because we can benefit more from the development agreements. The slowness taken by the government in the re-negotiations should be of concern to all of us,” Prof Saasa said.

“Government should give regular updates on the re-negotiation process. We want to know what is happening.”

He said Zambia was expected to benefit colossal amounts of money from the re-negotiated development agreements. However, Prof Saasa observed that at the moment the mining companies were not paying taxes, which when re-negotiated would go to government coffers and in turn benefit Zambians.

“We expect to benefit more,” Prof Saasa said. He said although there was need for the country to benefit some funds through mineral loyalties, the money would be lower than what would be gotten from the renegotiated development agreements.
However, Prof Saasa said would Zambia benefit more from mineral loyalties because of the increasing production levels.

“To some extent, the mineral loyalty is based on production; the higher the production the higher the benefits from mineral loyalty,” Prof Saasa said. “Within the next four to five years we expect over one million metric tones of copper.

That is the expectation from Lumwana mine. Therefore, when we increase the output, we will expect the increase in the loyalties. So we should not be so disappointed with the current amounts of money from mineral loyalties. In fact, mineral loyalties are lower than development agreements, for me I would rather we concentrate on re-negotiating development agreements.”