Maravi

Brook no nonsense from the mines

Brook no nonsense from the mines
By Editor
Wednesday February 13, 2008 [03:00]

We make a clarion call to all Zambians to rally behind the government and actively support its taxes on the mines. The changes the government has made to the mining taxes are very modest and it is very surprising that the transnational corporations running these mines want to make a big issue out of this move.

It is very clear that those who come to mine our minerals and sell them abroad for gigantic profits are not cooperating or development partners of ours.

They are fortune seekers who have come with no other intention but to rape our nation. The behaviour of these corporations doesn’t seem to have changed in any way from that of the British South African Company that started mining activities in this territory in the early 1900s. They still want to have everything their way and to enrich themselves totally at our own expense. This cannot continue; things have to change.

It is sad that mining companies come here and want to dictate everything, from taxes to labour laws and so on and so forth. These are things they can’t do in their home countries. But the world is changing, and they shouldn’t think what is happening in Venezuela and other Latin American countries will not happen here. There is a new global awakening. We haven’t yet fully caught up with it but this awareness is coming. They can’t continue to blackmail our government whenever it wants to do something that is in the interest of the people and the country.

No one can deny that Zambia has not gotten a good deal from the transnational mining corporations that are exploiting or have exploited its natural resources. What this country is getting in terms of mineral royalties and other taxes from the mining industry is too low to have any meaningful impact on this economy. It doesn’t matter how the mineral prices move internationally, the benefits to this country have continued to remain low.

Well, one can argue that the benefits from the mining industry should not only be seen in terms of taxes and royalties but also in the numbers of jobs being created and maintained. No one can dispute that there is some employment being created and other secondary benefits being generated.

We even have some Zambians being employed to help these mining companies thoroughly exploit us. We don’t know how much they are paid to do that, but they are paid something – probably not less than the biblical 30 pieces of silver.
But let's look at the extent of these benefits in relation to the total earnings of these corporations. An honest assessment will reveal that what is paid to our people as wages and salaries is an insignificant portion of these corporations' total earnings, leaving huge profits for themselves. We should consider ourselves very lucky to have all these mineral resources in our country. But as it often happens, it is not what one has that separates him from the other but what one does with what he has.

The curse of being born with a copper spoon is the most common explanation of Zambia's poor economic development. We believe that this curse is just a big hoax to wish away a more serious analysis of the reasons for Zambia's poor economic management. We could go as far as to argue that the fact that Zambia is endowed with copper resources is a big asset that the country could have used to develop not only the mining industry but also the other sectors of the economy. What has eluded our planners are sound mining and mineral development policies. Having rich minerals can never be a curse.

If one doesn't appreciate being endowed with rich minerals what does one really want from nature: dollars to be dropping from the skies like rain? The Russians have built a very interesting legend to describe their mineral rich Siberian region. The legend goes something like this: after creating the world in seven days, God began to hide some mineral troves fairly all over the world and after he was done, he remained with a handful of minerals which he cast all over Siberia.

From a mineralogical point of view, Zambia qualifies to be called a highly metallurgenic country. However, the scandal lies in our country's failure to beneficially exploit its mineral potential to the full. The great majority of our country's mineral resources remain less known, unexploited and without an adequate policy framework for their exploitation. And this has helped trans-national corporations have a field day in their dealings with us. There are many reasons things have turned out this way.

These range from ignorance to corruption and bureaucratic ineptitude that has given the large mining companies inordinate influence on our country's mineral development policies. The trans-national corporations get what they want and not what we want to give them. As far as ignorance is concerned, this is only true in the sense that those that know the potential and what can be gotten out of our minerals for the benefit of our people are not in a position to influence development. Conversely, those that could influence development often do not care to know. In other words, they are very strong filters between the geological survey, the policy makers and business community.

There's no serious analysis of what our mining industry is doing. Bureaucratic ineptitude in the mineral sector is very real. A lot of people who have to make policies regarding the mining industry are very ignorant of the dynamics of this industry. Most of the policies are designed to favour large trans-national corporations, and from the history of Zambia, we know why the industry was designed in such away.

What our policy makers have failed to grasp is the basic fact that what may be good for KCM, in its international corporate strategy, is not necessarily good for us. There's no need for us to waste these minerals by allowing trans-national corporations to continue mining when there are no meaningful benefits accruing to the country. These are wasting assets and they will not be there for future generations if they are exhausted senselessly now. This in itself means that whatever mineral resource comes out of our soil should not only be for the benefit or convenience of the current generation but also the future generations.

Therefore, if it is not beneficial to mine any mineral let's not waste that resource, let's leave it for the future Zambians who may be more wiser than us so that they can make best use of them. If we are getting nothing or very little from the current mining activities, there is no point in continuing to mine. Doing so is robbing the future generations of the resources they will need to survive in what increasingly appears to be a very difficult and complicated future world. We shouldn't forget that the future is not built in the future, it is built on today's threshold.

The future our children will have will depend much on what we ourselves are doing today. What we are trying to say is that let's not give away for nothing the minerals of this country; if there are no meaningful benefits accruing to the country from mining, let's stop it until we are able to do it in a beneficial way. If we continue on this path of wasting, of giving away for nothing to trans-national corporations, future generations will put us on trial. Let's review everything we are doing in the mining sector and ensure that everything benefits the nation.

It is good that our government is starting to wake up and do that which needs to be done to ensure that our people benefit from the natural resources of their country. And on this score, the government deserves the support of all; the support of the unions, the entire civil society and of all our politicians. These taxes, which are very modest in our view, should not be reduced in any way.

The government should continue to have the power to set and collect taxes as it deems fit. The government should treat the mining corporations like all other businesses operating in the country and should brook no nonsense from them. Those who want to go can go. They certainly can be replaced.

Labels: 2008 BUDGET, WINDFALL TAX

posted by MrK @ 3:32 PM