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(ALLAFRICA, TIMES) Zambia: State to Dump DAs

Zambia: State to Dump DAs
The Times of Zambia (Ndola)
8 February 2008
Posted to the web 8 February 2008
Ndola

GOVERNMENT will not renegotiate the Development Agreements (DAs) with the mining companies and that a new mining regulatory law will be proposed which will, among other things, remove the requirement to enter into DAs. Acting Secretary to the Treasury, James Mulungushi said section nine of the Minerals Act was being proposed for amendment by repeal and replacement.

Dr Mulungushi said this in Lusaka yesterday when he appeared before the expanded parliamentary committee on estimates at Parliament buildings chaired by Itezhi-Tezhi MP, Godfrey Beene.

He said the provisions and protection of the DAs would be in the relevant laws and regulations.

"The new mining regulatory regime will, therefore, do away with the requirement for Development Agreements," he said.

He said Parliament and the Zambian citizens should support the new measures and the stance taken by the Government not to renegotiate the DAs with the mining companies.

He said support was also required to put in place a mining law that would, among others, remove the requirement of DAs.

Attorney-General Mumba Malila said the mining firms should understand that the Government was doing this in good faith.

He said the Government at the time it entered into these DAs might have been in a state of desperation.

"We hope the mining companies will understand where we are coming from. We want to handle this amicably," he said.

Mr Malila said the DAs could not stop the Government from making a law and said all the good things in the DAs would be captured in the law.

He said in an event where the mining companies dragged the Government to court, Government was ready to proceed and defend its position.

He said the legislative committee looking into the new tax regime in the mining sector had completed the draft report, which would soon be presented to Parliament for enactment.

And Dr Mulungushi told the committee that additional revenues expected as a result of the new measures was U.S.$415 million and the estimates were based on a projection of $3.2 per pound and annual production of about 600,000 metric tonnes.

Dr Mulungushi said the Government proposed that the revenues to be raised be set aside in a special account, which would also act as some form of stabilisation fund.

He said this was necessary in order to avoid serious macro-economic implications such as damage to the non-copper export sector as a result of exchange rate appreciation.

"Additionally, setting aside the revenues in a special account will smoothen expenditure because mineral revenues tend to be more volatile and uncertain than other revenue types," he said.

Dr Mulungushi said the resources in the special account would be utilised in accordance with the normal transparent procedures in consultation with Parliament.

Dr Mulungushi said the special account would be a permanent feature in which all mining revenues should be deposited and the amounts to be utilised in the annual Budget would be determined and agreed with Parliament.

Earlier, Dr Mulungushi asked the committee if it could allow his team to sit in camera, taking into consideration that the matter to be discussed was sensitive, critical and highly technical.

But Mr Beene said the committee allowed the media to cover the sitting as the issue being discussed had already been brought to the attention of the public by President Mwanawasa in his address to the House and Finance and National Planning Minister, Ng'andu Magande in the Budget.

Labels: DEVELOPMENT AGREEMENTS, JAMES MULUNGUSHI, MINES AND MINERALS ACT, WINDFALL TAX

posted by MrK @ 11:57 PM