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Foreign firms call for new Zambia mine policies

Foreign firms call for new Zambia mine policies
Written by Reuters
Wednesday, August 19, 2009 6:26:13 PM

LUSAKA (Reuters) - Foreign mining firms in Zambia, Africa's top copper producer, want the government to adopt mining policies that will boost investment at a time when copper prices are recovering, an industry official said on Wednesday.

Nathan Chishimba, president of the Chamber of Mines of Zambia (CMZ), which represents interests of the mining firms, said companies wanted stable and longterm policies that would reduce risk to their investments.

"(Mining companies) are not saying the policies should not be changed, but that there should be consistency so that any changes to the policies should not result in fundamental shift in the direction of the industry," Chishimba said.

In 2008, Zambia introduced a 15 percent profit variable tax, 25 percent mineral windfall tax -- which it scrapped in 2009 -- and raised corporate tax to 30 percent from 25 percent, upsetting foreign mining firms.

Zambia said last week it will not refund foreign mining companies millions of dollars they paid in taxes when the controversial law was in force, but could revise existing taxes.

"We must have policies that recognise the magnitude of the risk in the mining sector, which is the longterm nature of the industry," Chishimba said.

Chishimba said Zambia was set to achieve the targeted production of 600,000 tonnes of copper this year.

"The country can achieve the target provided that all other factors such as reliable supply of power and other logistical arrangements are met," Chishimba said.

Some of the foreign mining companies operating in Zambia include Canada's First Quantum Minerals, London-listed Vedanta Resources Plc, Equinox Minerals and Glencore International AG of Switzerland.

Labels: CMZ, NATHAN CHISHIMBA, WINDFALL TAX

posted by MrK @ 5:27 PM