(LUSAKATIMES) State wont re-indroduce the windfall tax, maintains Mwale

State wont re-indroduce the windfall tax, maintains Mwale
Monday, May 10, 2010, 15:49

Mines minister Maxwell Mwale and Chinese state grid corporation executive vice president Shu Yinbiao exchange notes in Lusaka

Government has maintained that it will not re-introduce the Windfall tax on the mining sector as it will militate against levels of mineral exploration activities in the sector.

Mines and Minerals Minister Maxwell Mwale says explorations is the backbone of the Zambia’s future in the mining sector stressing that the introduction of super taxes of mines would lead a drop in explorations as witnessed when the windfall tax was introduced in Zambia.

The Minister was speaking at the presentation of a cheque of dividend, a payment worth $ 18.1 million, by Kansanshi Mining PLC a major holding of First Quantum Minerals FQM to Zambia Consolidated Copper Mining Investment holdings ZCCM-IH, a minority share holder of Kansanshi.

The Dividend is the first single largest payment ever received by ZCCM-IH from the firm which is the highest since it began its operation in the mining sector.

Mr. Mwale said the gesture by the firm is a clear demonstration of Government and the countries benefits from foreign investments in the sector as opposed to some sections and sectors of the country that Government is not benefiting from its investments.

[What a lying, sanctimonious jackass. The mines are making at least $2.4 billion in profits a year. Most companies pay out 50% of their earnings in dividends. This means that the biggest mining company in Zambian made how mcuh profits? $18.1 million is a joke. It is the equivalent of beads and coins. - MrK]

And First Quantum Minerals FQM Resident Director Kwalela Lamaswala said that the payment follows a review of Kansanshi Dividend Policy by the board and comprises a special Dividend of US$ 15.6 million for the end the financial year of 2007 while the other US$ 2.5 million accounts for the end of the 2009 financial year.

He said the objective of the review of its policy is to ensure that its share holders receive an attractive return on their investments.

Speaking at the same function as he received the cheque ZCCM-IH Board Chairman Alfred Lungu said that the Dividend not only represents a valuable return on its investment but that it will also enhance opportunities of the Government holding to supplement its investment portfolio for the ultimate benefits of the Zambians.

[What a goddamned freak. He is saying that instead of even paying out this miserable $18.1 million, they are going to buy more shares in the mining companies, in effect directly returning it to the company that paid it out. These people are total scumbags. I guess massa doesn't want to leave a single cent in Zambia, they they obey because of the bribes they have personally received. - MrK]

He also said the Dividend will help ZCCM Holdings to offset the remainder of its Legal liabilities carried over from the old ZCCM Limited before the firm’s transformation into ZCCM in 2002.

Mr. Lamaswala called on other investment firms to emulate what Kansanshi has done in order demonstrate their investment worthiness in the sector.

[These people are criminals. Nothing less. They are robbing the people of Zambia blind. All the people who die in hospitals that have no medicine, all the children who are getting no education - it means nothing to them. They can watch their own people die in the streets, and it will probably make them feel good because it isn't them. These people shouldn't be in government or free on the streets, they should be in jail for fraud and manslaughter. This is the most corrupt bunch of crooks ever to pretend to be politicians. A military coup would be better than this.

ZCCM-IH owns 20% of Kansanshi Mining PLC. When was Kansanshi's last financial statement? If we presume that they paid out 50% of their profits in dividends, and ZCCM-IH owns 20% of it's shares, then Kansanshi would have us believe that they made (18.1 mn x 2 x 5 =) $181 million in profits. That is absurd.

Kansanshi Mining (First Quantum PLC) had an output of 45,073 tonnes in the first half of 2009.

In 2008: 215,000 tonnes
Plannted 2009: 244,000 tonnes

Even if their turnover in 2009 was 215,000 tonnes (like in 2008, being conservative), and if the copper price on average was $7,000 (again being conservative), they would have a turnover of $1.5 billion. If their cost was 40% of that (like Equinox, because they are not publishing their financial data), their profit would be $900 million. If they paid out 50% of profits as dividend, they would be paying the government $450 million, not $18.1 million for 2007 or $2.9 million for the end of 2009. - MrK]

QFM