Maravi

Metorex in talks with govt over development agreement

Metorex in talks with govt over development agreement
By Chiwoyu Sinyangwe
Tuesday April 22, 2008 [04:00]

METOREX mine operations director Edward Legg has said the mining company is continuing talks with the Zambian government over the enforcement of development agreements rather than taking legal action. Legg, however said Metorex reserves the right to take legal action to enforce its development agreement with the government.

According to Business Day, diversified metals miner Metorex said it was analysing the effect of Zambia’s new super tax on copper mining profits on its Chibuluma South mine, where the company is increasing monthly ore production to 60,000 tonnes.

“The group had not decided to take legal action to enforce its development agreement, which included a tax stabilisation clause,” Legg told analysts on a visit to the mine last week. He said the mining company reserved its right to do so, although it was continuing talks on the issue with the government through the Zambian Chamber of Mines.

And Chibuluma Mines general manager Edward Mounsey said the extra taxes on copper mines would not affect Metorex’s Sable Zinc operation in Zambia.

Chibuluma South, which had been mining 40,000 tonnes of ore a month, was ramping up production to 50,000 tonnes a month and was expected to reach that target this month,

He also said the mine was also about to recommission an old leach plant to treat a surface stockpile of about 60,000 tonnes of copper oxide, which it believes can be processed profitably at current copper prices.

The government this month raised the corporate tax rate to 30 per cent from 25 per cent with effect from April 1, and hiked the royalty on copper profits to three per cent from 0.6 per cent. It has also imposed a windfall tax on copper profits, which kicks in when London Metal Exchange copper prices exceed a certain level.

Some mining companies in the country like Konkola Copper Mines have already accepted the new mining regime.

Labels: DEVELOPMENT AGREEMENTS, METOREX

posted by MrK @ 3:21 AM