Friday, October 24, 2008

(DAILY MAIL) Copper value can be enhanced through taxes

COMMENT - More specifically, copper prices may be enhanced by tariffs.

Copper value can be enhanced through taxes

GOVERNMENT says value addition to copper will only be created through imposing export taxes on the commodity. Commerce Trade and Industry Minister, Felix Mutati, said people could only be stopped from exporting the copper concentrates through imposing an export tax. Mr Mutati said this in Lusaka at his office during the Zambia-Sweden bilateral consultations with visiting Swedish minister for trade, Ewa Bjorling. He said globally, this move would hurt as the international community was of the view that countries had a liberalised trading system.

“Zambia is not yet there. We need to consolidate and strengthen before the market could be opened up substantially,” he said. Mr Mutati said in the last five years, the trade balance between Zambia and Sweden was in favour of Sweden.

“Most of our mining equipment is procured from Sweden. What Zambia’s exports to Sweden are very marginal about US$500,000 against US$40 million to US$50 million imports from Sweden,” he said.

He said Zambia had been buying transformers from ABB, a Swedish company, since 1964, adding that if ABB could established a presence in Zambia, it would not just capture the local market but supply the entire region.

He said Government felt that technical back-up for mining companies was very low and for complicated solutions, experts had to fly into Zambia.

“It is important to create local after-sales services in core areas where Swedish companies are participating actively in Zambia,” he said.

Mr Mutati said attraction of three to four respectable Swedish international companies, would help the nation improve on her trade and also create value addition.

He said for Zambia to access the European Union (EU) market, value addition to copper was important. He said it was important that Zambia attracted superior Swedish companies.

“The circus of saying we are going to export to Sweden is not working. We need to have a better understanding of the areas of penetration that Zambia should focus on,” he said.

And speaking earlier, Dr Bjorling said her government had adopted a new strategy for development cooperation in Zambia for 2008 to 2011.

She said Sweden was increasing her development cooperation.

“We moved from development aid to global development and much more into aid for trade which is in line with European Union,” she said.

She also asked in which areas Swedish companies could invest in Zambia apart from the mines for the two countries to work together in trade within the development strategy.

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