Africa Rainbow hails government's stance on windfall tax
Africa Rainbow hails government's stance on windfall taxBy Masuzyo Chakwe
Sun 15 Apr. 2012, 13:27 CAT
AFRICA Rainbow Minerals (ARM-Copper) chief executive Dan Simelane has expressed excitement over the government's pronouncement that windfall tax would not be introduced on mining companies operating in Zambia.
Making a presentation at the Zambian High Commission in Pretoria on Wednesday, Simelane, who was in the company of chief operations head at ARM, Pierre Joubert, and Vale senior project leader, Renato Souza, said ARM and Vale were scared that there would be radical changes in the policy when the PF government took over power, but was happy that the new government took less than four days to finalise the agreement with the mining company.
ARM and Vale have entered into a joint partnership of 50-50 to own 80 per cent of the shares to develop the Konkola North mine (KONNOCO), with Zambia Consolidated Copper Mines-Investment Holding(ZCCM-IH) contributing the remaining 20 percent of the US$412 million investment in the mining project.
This is according to first secretary for press at the Zambian High Commission in South Africa, Patson Chilemba.
On the same issue, Zambia's High Commissioner to South Africa Muyeba Chikonde said the government campaigned on the basis of lower taxes and did not want to go against that policy.
[The PF did not campaign on lower taxes for the mining industry. - MrK]
He assured Simelane and his counterparts that their investment in Zambia was safe because the political environment in the country was mature.
High Commissioner Chikonde further said President Michael Sata was trying to align the government to professionalism so that investment is sustained, saying that was why the mission was happy with the company's promise to prioritise local companies.
Simelane said the mining companies had come up with a deliberate policy to hand exclusive rights to Zambian companies for the supply of goods to the mine, which would become fully operational in December this year, with an initial workforce of 2000.
"We are grappling with the definition of a local Zambian company. A company from South Africa that opens a branch in Zambia is not a Zambian company. Zambia has got more experience in terms of copper mining than South Africa," he said
Simelane said over 95 per cent of senior positions in the company would be held by Zambians in order to ensure the advancement of the local people in senior positions.
Simelane said ARM was the biggest 'black' mining company, with a market capitalisation in the South African economy of R40 billion, with interest in platinum and coal mining, adding that KONNOCO would be the first mining company they would build outside South Africa.
Souza said Vale was the second largest mining company in the world with representation in over 28 countries which included Mozambique, Australia and Canada.
Joubert said the name KONNOCO would be changed to Lubambe and would have its own logo to stop people from confusing it with Konkola Copper Mines (KCM), which was owned by Vedanta.
He said the company would comply to pay mineral royalty of six percent on the gross value, 30 percent corporate income tax, plus the variable profit tax, while the direct training costs of the mine was budgeted at $1.5 million per year.
Joubert said the mineral royalty was approximated at US $15 million per annum, company tax, including variable tax at US $45 million to US $50 million per year, among other costs.
He said the life expectancy of the mine was 28 years, with a projected concentrate output of 45,000 tonnes per annum, which they planned to increase to 100,000 tonnes per year when they expand operations to the Southern limb.
Labels: WINDFALL TAX
posted by MrK @ 1:18 AM
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