Friday, April 12, 2013

Govt should stick to monitoring new BoZ Act implementation - Newall
By Kabanda Chulu and Gift Chanda
Fri 12 Apr. 2013, 14:00 CAT

GOVERNMENT should restrict itself to monitoring the implementation of the new Bank of Zambia Act because any extension of its application towards currency control will negatively affect the economy, says First Quantum Mineral (FQM) president Clive Newall.

Government has made amendments to the Bank of Zambia (BoZ) Act whose objective is to regulate foreign exchange inflows and outflows and amounts remitted, and monitor international transactions in services and investment in the form of equity and debt securities abroad.
The new Act also seeks to maximise international money transfers into and out of Zambia and monitor profits and dividends received in respect of investments abroad.

There are concerns that these new regulations would scare away investors especially that the Zambian economy was based on free market policies hence some investors might consider pulling out or scaling-down their investments.

But government has argued that the new Act would stop capital flight and compel investors, especially mining companies, to spend foreign exchange locally to result in stability of the kwacha.
When asked to comment on the matter and if FQM, which owns Kansanshi Mines Plc, had engaged the Zambian government to dialogue on the Act, Newall confirmed that conversations had been held with government about the new law.

"We have been given assurances that it is simply legislation to allow monitoring of currency movements, rather than currency control. We will, of course, monitor the implementation of this Act and enabling legislation as any extension of its application towards currency control would be an unwelcome development," stated Newall, in an emailed response.

"We cannot, in any case, overlook the increasingly heavy administrative burden being placed on investors by this and similar recent measures."

Meanwhile, First Quantum Minerals has indirectly acquired a 3.7 per cent stake in Zincore Metals after its "takeover" of Inmet Mining Corporation last month, the company has said.

First Quantum, which operates in Zambia, acquired control of Inmet Mining Corporation on March 21, 2013.

Inmet holds 7,820,500 Zincore Shares representing 3.7 per cent of the issued and outstanding Zincore Shares.

"Together with Zincore Shares indirectly held by First Quantum prior to its acquisition of Inmet, First Quantum has control of 49,888,245 Zincore Shares, representing 23.7 per cent of the issued and outstanding Zincore Shares," the company said in a statement.

Zincore Metals is an exploration company focused on the identification, acquisition, exploration, evaluation and development of primarily Zinc and related base metals projects in the Americas.

First Quantum Minerals (FQM) is Zambia's biggest copper producer and is currently spending US$2 billion on its Trident project which it says would help increase its Zambian copper production to almost 700,000 tonnes yearly by 2015.

The company is also spending US$1.3 billion to $1.4 billion on an expansion at Kansanshi, already Africa's biggest copper mine.

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