Maravi

Prof Lungu lauds govt’s increased stake in mines

Prof Lungu lauds govt’s increased stake in mines
Written by Fridah Zinyama
Tuesday, March 17, 2009 2:36:59 PM

COPPERBELT University (CBU) professor in the School of Business John Lungu has welcomed the government’s decision to increase its stake in mining companies from 15 per cent to 25 per cent.

Prof Lungu yesterday said the decision to increasing government shareholding in mines to over 25 per cent would help the sector survive difficult economic times.

“The private sector is driven by high profit margins and it is normal for them to want to withdraw in times of economic recession,” he said. “On the other hand, government is more interested in providing social services to its people. This is why in such economic times, government’s decision to increase its stake is welcome as it will help the private sector to share the burden of high production costs.”

Mines minister Maxwell Mwale last week announced that the government intended to increase its shareholding in mining companies and other operations from 15 to 25 per cent to allow it to have a stronger influence in decision making over the problems the industry was facing.

Prof Lungu said if the government had the resources, it was right to consider increasing its stake in the mining sector as it would bring about flexibility in the industry.

“I say that there will be flexibility in the industry because when things improve economically and copper prices increase on the international market, the Zambian people will also benefit,” he said. “This is unlike what happened in the past when government’s stake in the mining industry was limited.”

Prof Lungu further said it was important that the government maintained a good presence in the mining industry in order for the citizens to benefit from the mineral resources, unlike what had happened in the past.

Labels: JOHN LUNGU, MINING, NATIONALISATION

posted by MrK @ 2:36 PM