Maravi

Govt opens negotiatons with mining companies

Govt opens negotiatons with mining companies
Written by Chiwoyu Sinyangwe
Wednesday, December 24, 2008 3:27:20 PM

GOVERNMENT has commenced negotiations over the requests made by mining companies for the sector to remain afloat despite continued collapse in international copper prices.

Chamber of Mines of Zambia (CMZ) president Nathan Chishimba who disclosed the development stated that the cartel of mining companies in the country was grateful to the government for allowing dialogue to ensure the investment climate in the country’s lifeblood remained positive.

Chishimba however refused to disclose the contents of the ongoing discussion between CMZ and the government, saying it was inappropriate for him to disclose the contents.

“I can confirm that we have engaged with the government regarding the urgent need to ensure that the mining industry remains afloat during this acutely trying period, but I think it is not appropriate for me to divulge the details of the ongoing discussions with government at this time,” stated Chishimba in response to a press query.

“Having said this, I would like to place on record our appreciation of the efforts that government is making to engage with us and ensure that the investment climate remains positive.”

But it has been learnt that some of the demands the mining companies have made to the government included the zero rating of windfall and variable tax and that mineral royalty tax be graduated at levels of copper prices as follows; above US $3 per pound at three per cent, US$2 per pound to US$ 3 per pound at 2 per cent and one per cent for below US$2 per pound.

They further proposed that in calculating mineral royalty tax, mining companies be allowed to offset copper and cobalt price participation from gross sales, as these were not realized in the hands of mining companies. The other demands are that the government should reduce company tax for mining to 25 per cent from the current 30 per cent and allow mining companies to offset selling against gross revenues.

In respect of the customs and Excise (Amendment) bill 2008, the mines are proposing that these be withdrawn until sufficient smelting and refining capacity is successfully commissioned and that the government suspend excise duty on local diesel and waive road levy on diesel imported for use in plants and mines

And Chishimba stressed that the genesis of the current global economic crisis lay outside the country, with the world economy in recession which was close to a slump. He said any efforts that the government could make in response to any representations may only go so far to mitigate the adverse fallout from the crisis.

“We can only try and assist government to ensure that any measures taken dovetail with and complement the strategies that other countries are taking in this regard. This way, we will minimise, but cannot avoid, the adverse impact of the global economic crisis on Zambia, not only in the mining sector, but in other industries as well,” stated Chishimba.

Labels: CMZ, MINING, NATHAN CHISHIMBA

posted by MrK @ 3:27 PM