Govt nods US$9.8m mineral resource tax rebate to CNMG
Govt nods US$9.8m mineral resource tax rebate to CNMGWritten by Chiwoyu Sinyangwe
THE government has agreed to give a rebate of US $9.8 million in mineral resource tax to China Nonferrous Metals Mining Group Co (CNMG) over the acquisition of Luanshya Copper Mine.
CNMG president Luo Tao said during the media conference last week in China that although the contract bid was worth US $50 million, the deal actually costs less for CNMG.
Luo said following the government’s decision to agree to give a rebate of US $9.8 million in mineral resource tax to CNMG in the acquisition of Luanshya Copper Mine (LCM), the transaction could be less than 20 per cent of the stated agreed price.
In May, the government picked CNMG to take an 80 per cent stake in LCM after the previous owners Enya Holdings BV put the mine on care and maintenance last January, blaming the decision on the depressed copper prices at the time when the global economic crisis climaxed.
And CNMG’s acquisition of LCM has won final approval from China's State Administration of Foreign Exchange (SAFE).
According to Alibaba News, the deal marks CNMG's third overseas purchase of mines and the second investment in Zambian copper mines following the state-owned nonferrous metal company’s acquisition and exploitation of the Zambian Chambishi copper mine in 1998.
"The purchase adds nearly 3 million tonnes of resource reserve to CNMG and the company is striving to increase its total capital to 50 billion Yuan by the end of this year," said Luo.
CNMG won the bid on May 8 this year and took over Luanshya Copper Company in June.
The transfer of shares from Enya Holdings to CNMG was enmeshed in controversy as most analysts contended that US $50 million was way beyond the market value for the mine.
Sources close to the deal argued that the value of transfer should have been gon close to US $100 million to help commensurate the company’s total liability which at the time was estimated to be around US $120 million.
Labels: CHINESE, CORRUPTION, ENYA HOLDINGS, MINING, TAXATION
posted by MrK @ 7:21 AM
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