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(REUTERS) Zambia says may bring back mine windfall tax

Zambia says may bring back mine windfall tax
Thu Feb 9, 2012 12:44pm GMT

* Gov't says to engage miners on tax
* Sees windfall if copper tops $10,000/t

LUSAKA Feb 9 (Reuters) - Africa's top copper producer Zambia may bring back a mining windfall tax if copper prices hit $10,000 per tonne, the Zambian high commission in South Africa said on Thursday, quoting the minister of mines.

Copper steadied on Thursday, holding near the year's high, as hopes Greece would reach a bailout deal boosted the euro, offsetting data showing a rise in inflation in top consumer China.

Benchmark copper on the London Metal Exchange (LME) was at $8,576.75 a tonne at 1050 GMT, almost flat from a close of $8,580 on Tuesday.

"For the whole of this year windfall tax will not come up unless prices go up to the region of $10,000 per tonne," mines minister Wylbur Simuusa was quoted in the statement as saying during a meeting with Rio Tinto officials on the sidelines of a mining conference in Cape Town.

"The projections are that it will hit $10,000 and at that time we may sit around the table. If the prices hit those ranges it is only logical that we talk," he said.

Zambia scrapped the 25 percent windfall tax in 2009 following complaints from mining companies that it raised production costs and discouraged investment.

It doubled royalties on copper miners to six percent in the 2012 budget to bring in badly needed revenue to increase social spending and farm subsidies, a move miners have warned may cause them to scale back operations.

Foreign mining companies operating in Zambia include Canada's First Quantum Minerals, Vedanta Resources Plc, Glencore International Plc, Barrick Gold, Brazil's Vale and Metorex of South Africa. (Reporting by Chris Mfula; Editing by Ed Stoddard and James Jukwey)

Labels: MINING, WINDFALL TAX, WYLBUR SIMUUSA

posted by MrK @ 8:58 PM