Maravi

Chilipamushi bemoans limited benefits from the mining sector

COMMENT - If 'the breakeven price of copper is $5,000 per tonne', how come Mopani sold copper to Glencore for $2,500 per tonne? Davidson Chilipamushi should get his numbers straight. Bottom line - you can't trust the foreign mining companies. So don't, and either have high tax on turnover, or nationalize. Also, unless 'corporate social responsibilities' add up to $1100 million a year, they don't replace actual taxation.

Chilipamushi bemoans limited benefits from the mining sector
By Kabanda Chulu in Kitwe
Tue 01 Mar. 2011, 04:01 CAT

LIMITED benefits from the mining sector will result in political resentment against the government by people living on the Copperbelt, says a Copperbelt University academic.

Davidson Chilipamushi, a lecturer in the school of business at the Copperbelt University, who was until recently a permanent secretary in the Ministry of Commerce, Trade and Industry, said many Copperbelt residents were feeling hopeless because of their failure to benefit from the thriving mining activity in their region.

He made the remarks during a Zambia Institute of Certified Accountants' (ZICA) forum, "Booming copper price-what is the economic impact on the Copperbelt?"

Chilipamushi said government’s reluctance to reintroduce the windfall tax on mining had confirmed people’s perception that the state was protecting foreign investors.

“The trickle-down effects to local communities are minimal and we hear that the break-even on copper is about US$ 5,000 per tone, with the price currently above US$9,000 per tonne. So the mines should be more serious with their corporate social responsibility and do something that will uplift people’s living standards.

Things like sponsoring the Zambia Golf Open in Nchanga is elitist and does not benefit local people,” Chilipamushi said.

“The benefits are not clear since there is high unemployment, use of casual workers, no skills transfer whenever the mines use foreign labour and, generally, there is hopelessness in the minds of many people in this region that will result in political indignation towards the government.”

He said there was need to find a solution that would result in benefits for mining companies and improve the living standards of local people.

Chilipamushi said that while Zambians needed more investment, it should not result in exploitation.

But Chamber of Mines assistant general manager Lawrence Chileshe argued that the impact of high copper prices had increased government revenue and contributed to both existence and growth of efficient local enterprises.

And Cathy Walubita, from Konkola Copper Mines Plc, said people should not expect more from the mines but question how the government was using the taxes it received.

George Bester, from Copperbelt Energy, said the government should develop mechanisms to compel mining companies to use a substantial percentage of their earnings for corporate social responsibilities.

Labels: DAVIDSON CHILIPAMUSHI

posted by MrK @ 3:51 PM