Maravi

(STICKY) (REUTERS) Zambia starts copper mine audits to verify earnings

COMMENT - What a gutless and partisan article from Reuters. You would think that someone it is 'unfair' that the mining industry would have to pay taxes. The defense of scrapping the windfall tax also makes no sense, in the light of the miniscule amount of taxes received without it ($50 million for an over $4 billion industry - daylight robbery). Let me be blunt, Zambia does not need donor aid, it needs to tax the mines $1.2 billion a year. This article makes it sound that only 'some Zambians' and the political opposition are asking for this for party political purposes because there is an election on. They also don't mention that dr. Musokotwane is a non-executive director of ZCCM-IH, which is not receiving any kind of reasonable dividends, mainly because these companies are not declaring profits. Shame on you, Reuters. And thanks to Philip for mailing me this article.

Zambia starts copper mine audits to verify earnings
Sat Jul 17, 2010 3:09pm GMT

JOHANNESBURG (Reuters) - Zambia is conducting an audit of mining companies to determine their earnings and will punish companies found cheating over declaration of revenues, Finance Minister Situmbeko Musokotwane said on Saturday.

Musokotwane said the southern African country, the continent's largest copper producer, was also on course to produce 700,000 tonnes of copper this year following a rebound in metals output at the mines and a rally in global prices. Copper output at 675,000 tonnes last year was far above expectations of a forecast 500,000 tonnes.

Musokotwane said the audit had been ordered following claims by some Zambians, including the opposition parties and mining analysts, that the country was not reaping enough benefit from its key mining industry because of mis-reporting of revenues by some foreign owned mining companies.

Major opposition parties and civic groups have even asked for re-introduction of a 25 percent windfall tax the government scrapped this year, after an outcry from the mining companies.

"We have asked for a special audit to be done on the mining sector and if we find someone cheating, we will deal with that," Musokotwane told Reuters in a telephone interview from Lusaka.

"Cheating is dealt with by punishing offenders, but you cannot deal with cheating by increasing tax rates, you can't," he said.

Musokotwane said Zambia would in the long term begin to accrue more revenue from its mines after foreign investors put in up to $5 billion in reviving the mining industry in the last eight years.

"You have to be patient that you allow investments to come, make it stablise and then the tax revenue will come and I am absolutely sure the tax revenues will come up," he said.

Analysts say pressure has been mounting on the government from the opposition to raise taxes in view of a presidential election in 2011 with mining discussions increasingly becoming emotive in this country of 13 million people, where the mines are a major employer.

Musokotwane said the government would continue with policies that support growth of the mining sector to ensure the mines help with the diversification of the economy.

"We need a strong mining sector to help us diversify the economy," Musokotwane said.

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


Philip commented:

Of course, the GRZ won't talk about the ridiculous dividends received by ZCCM-IH...

This money is the most simple to receive and more important than windfall taxe, but the GRZ is silent about this ..!

who receive money ? that is the question !

Labels: AUDITING, SITUMBEKO MUSOKOTWANE, TAXATION, WINDFALL TAX

posted by MrK @ 1:58 PM