Maravi

Miners will have last laugh over Rupiah – Sata

Miners will have last laugh over Rupiah – Sata
By George Chellah
Tue 31 Aug. 2010, 14:00 CAT

PATRIOTIC Front (PF) leader Michael Sata yesterday said miners will have the last laugh over President Rupiah Banda’s arrogance and uncaring attitude towards their numerous grievances.

And Sata warned President Banda that his government risks facing an international legal battle due to its failure to honour agreements with the mines. In an interview, Sata said President Banda had clearly shown that he had no regard for the ordinary miners on the Copperbelt.

“Rupiah is to blame for the problems on the mines, particularly the problems facing the miners. What is clear is that Rupiah is more concerned and is ready to protect the interests of some of these bogus investors at the expense of the ordinary Zambians. They are not giving concessions to mining firms with heavy investments in the mining sector,” Sata said.

“No wonder our miners are getting a raw deal from these investors. Our miners are suffering like they are just guests in their own country. Sadly, the government is not even willing to assist them.

At the moment our people are not even benefiting from the mines. Anyway, come 2011 the miners will have the last laugh over Rupiah’s arrogance and uncaring attitude towards their numerous grievances. Rupiah will bite his arrogance in 2011.”

And in a letter to President Banda dated August 12, 2010, Sata reminded President Banda that he was writing to him about the tax regime for mining companies just like he did with his predecessor.

“I realise that the mines are mostly in areas where my party dominates, but it would appear that no one in your government is aware of the damage the ongoing dispute is doing to the industry and to jobs on the mines.

Maybe no one in your government cares about the jobs that are being sacrificed by the delinquent and illegal tax regime introduced by the previous government,” Sata stated.

“It is possible that your government would care if it stopped to think that loss of jobs in the mining industry carries its effect into all other parts of the job market, possibly even into areas where your party is strong.

As I remarked to your predecessor, the calculation that mining companies were paying 47 per cent tax was in fact wrong.”

Sata explained that depending on the cost of production, most companies were paying in excess of 50 per cent.

“My party looks with envy at the wealth of Chile, a country which used to produce less copper than our wonderful country but now produces ten times more than Zambia. It is very easy to see, for anyone who is prepared to look that the entire Chilean economy has benefited enormously from a healthy mining industry.

Our government will move toward emulating Chile where the tax rate on mines is less than 35 per cent and where investment is thereby encouraged and jobs are created,” Sata stated.

“We believe it is necessary to be competitive with the best countries, not the worst. I am distressed to learn that your current Minister of Finance and his cohorts are pressurising the mines to capitulate to the previous government’s demands. I know this is because I can see all the investments that should be taking place and creating jobs are just not happening.


I wouldn’t be surprised, if he continues down this road, to see our country launched into a very public international legal case brought about because your party doesn’t honour agreements. This will no doubt cause us to lose even more investment and jobs.”

Sata said after the 2011 general elections, PF would be left with the unenviable task of trying to extract Zambians from the mess.

“Your Excellency, you and I are old enough to remember what happened to the mining industry in the first Republic. 100 per cent ownership and therefore 100 per cent taxation curtailed all investment in the mines by ZCCM, leading to the impoverishing of our country. We had to beg for our daily bread from the World Bank and other donors.

Thanks the country’s debt has been forgiven because we all know how servicing that debt was further impoverishing us all. It worries me that your government and its misguided policies are going to put us right back in that situation,” Sata stated.

“Zambia needs international investors more than they need us. In order to retain and attract these investors, we must honour our agreements and also establish a stable, predictable, attractive and unambiguous tax regime. We cannot afford an adhoc tax regime. You may remember before the mines were nationalized whenever copper prices where high the miners of all ranks received a copper bonus.

Further, Your Excellency may remember that on 24th October, 1964 because of a stable, predictable and attractive tax regime, the New African government under UNIP inherited 764 million British pounds. Today, we have high copper prices what is the benefit to Zambia and its people?”

Labels: MICHAEL SATA, MINING, TAXATION, WINDFALL TAX

posted by MrK @ 3:27 AM