Zambia will get K800bn from sale of Equinox, says Simuusa

COMMENT - The MMD is clearly mismanaging the mining sector and the economy. These deals have to be turned back. It is completely unacceptable that in a country with 40% malnutrition, the government can just get rid of the windfall tax, and be this uninterested in benefiting from the mining industry. Of course they personally benefit from taking bribes to do just that, which is why their excuses make no sense.

Zambia will get K800bn from sale of Equinox, says Simuusa
By Chiwoyu Sinyangwe
Wed 04 May 2011, 16:30 CAT

ZAMBIA will get US$171 million (over K800 billion) from the imminent US$7.68 billion sale of Equinox Minerals, the parent company for Lumwana Mining Company, reveals Wylbur Simuusa. And Simuusa says President Rupiah Banda was celebrating deprivation of Zambians by ground-breaking a large-scale Trident mine wholly-owned by foreigners.

Simuusa, who is Patriotic Front chairman for mines, said Zambia’s low stake in Lumwana Mining Company would result in the country getting a paltry amount from the country’s record transaction in the mining sector. Barrick Gold agreed to buy Equinox Minerals, whose Lumwana Mining Company, built for over US$1 billion in Solwezi is Equinox Mineral’s primary asset while other operations include a copper development project in Saudi Arabia.

“Hon Maxwell Mwale mines minister should explain what’s going to be the future of ZCCM-IH’s stake in the new company after Barrick Gold takes over Lumwana Equinox Minerals,” said Simuusa, who is also Nchanga Constituency member of parliament. “Because as things stand now, we are only going to receive about US $171 million from this deal but our shareholding might be diluted. So, let Mwale explain.”

Both finance minister Dr Situmbeko Musokotwane and Mwale could not be reached by press time as their mobile phones went unanswered. Simuusa also regretted that the government position on the transaction of the Lumwana magnitude remained unclear despite the country hosting the mines.

And Simuusa says President Banda was worsening the poverty levels in the country by creating an environment that exclusively favoured growth of the foreign capital. Simuusa regretted that President Banda went to celebrate the opening of the new mine with little benefits for the country.

During the official opening of the over US$1 billion First Quantum Minerals Trident mining in North Western Province, a project to be heralded by Kalumbila Mines in Solwezi, President Banda said it was gratifying that the mining sector had become viable again and contributing significantly to the economic growth of the country. President Banda hailed the Trident project as a boost to economic and social wellbeing of people in Solwezi and the country as a whole.

But Simuusa said President Banda was depriving the Zambian people of their birthright by abrogating the Zambian laws on mining which stipulated that Zambia, through ZCCM-IH needed to retain 35 per cent stake in new mining projects. “What was the President groundbreaking and celebrating about when we don’t have a single share in Trident,” said Simuusa.

“In the absence of the windfall tax, and the in view of the projected high copper prices, the future is that we should start increasing our stake in these mines, especially new ones and in that way, we will be benefiting from higher copper prices in the future, that’s more pertinent. But there you have the President celebrating where we are losing out. And since the shareholding is not being handled properly, the foreigners in the end will get everything while we will be left yawning and quarrelling among ourselves. So, the celebration by the President doesn’t make sense.”