Sunday, December 15, 2013

First Quantum dealings
By Editor
Mon 28 Oct. 2013, 14:00 CAT

COMMENT - Also see: Magande questions removal of duty on copper concentrates, By Chiwoyu Sinyangwe, Mon 28 Oct. 2013, 14:01 CAT

It is solliciting corruption, when it is legally possible for a minister is able to grant individual corporations tax exemption. The law must apply to all companies and all individuals at all time. It must not be possible fora company to approach a minister, and walk away with a tax exemption. Also, the Development Agreements were secretive and should all be scrapped for that rason alone. I say - nationalize the criminal enterprise. - MrK

The way our government is handling issues pertaining to First Quantum Minerals raises a number of issues and concerns. It is either those government officials responsible for the government's dealings and decisions concerning First Quantum Minerals are very corrupt and are receiving kick-backs or they are very incompetent.

First Quantum Mining has sued the Zambian government in the United Kingdom courts for allegedly abrogating the Bwana Mkubwa Development Agreement. The matter is now under arbitration and the Zambian government has filed in a plea to the claim by First Quantum Mining, who consequently submitted a counter claim based on the government's defence on September 25, 2013.

This same company, this same First Quantum Minerals that has sued the Zambian government, continues to receive benefits from our government and to be defended in all sorts of ways by some of the leading elements of our government. How is this possible?

On October 4, 2013, our government issued Statutory Instrument number 89 to waive export duty and allow First Quantum Minerals to export concentrates. This is difficult to understand for a government that wants to go and borrow hundreds of millions or billions of dollars on the international money markets. What is the purpose of us borrowing such huge amounts of money when we are allowing legitimate export duties not to be collected from First Quantum Minerals?

And why should First Quantum Minerals be exporting concentrates at a time when we have adequate refining capacity? Who can say they really know the other minerals other than copper that those concentrates contain? Again, there is something seriously amiss here; there is something stinking here. Is this a product of oversight, incompetence or outright corruption?

Whatever some may say or claim, it will not be wrong for anyone to conclude that Statutory Instrument number 89 was exclusively procured for First Quantum Minerals, which has stockpiled concentrates and does not want to export them because they will have to pay 10 per cent export duty on them.

First Quantum Minerals claims that there is no capacity in Zambia to treat concentrates. But this is contrary to what the smelter owners are saying. This is simply a strategy for avoiding to pay the correct tax to the Zambian government. And the Zambian government has allowed this to happen. Instead of collecting this duty, the government is opting to allow First Quantum Minerals to keep this money and burden the Zambian taxpayer with further national debt by going to borrow.

We have been advised by the international community, including the World Bank and International Monetary Fund, to collect more revenue from our mining activities. But what do we hear from our leaders responsible for these things? They are always defending the mining investors; they speak like they are directors of these mining companies. They seem to be more concerned about the profits of the mining companies than the benefits accruing to the Zambian people. Why? Again we ask: is it because of incompetence or it's simply a matter of corruption?

It is clear that the government is making the Zambian taxpayers subsidise the operations of First Quantum Minerals in this country.
When one critically analyses all that is happening, it is clear that the Zambian government is actually paying for the investment that First Quantum Minerals is putting in Kalumbila and other projects at Kansanshi. For what? Is it because someone in government is incompetent or is getting kick-backs from First Quantum Minerals?

And these people have no shame. They even went as far as trying to mobilise that clean man, that honest man, that apostle of our liberation struggle, Dr Kenneth Kaunda, to defend these clearly unjust and unfair dealings of First Quantum Minerals. Of course, Dr Kaunda, if he was told the truth, would never have agreed in any way to defend the interests of a company that is engaging in such unfair and unjust dealings against the Zambian people. There has been a strong lobby for First Quantum Minerals to have its permits, title deeds, Zambia Environmental Management Agency clearance to be processed quickly.

Regardless of the lawsuits that First Quantum Minerals has initiated against the Zambian government, whatever this company needs, it is still getting from our government. How is this possible?

First Quantum Minerals is claiming US$30 million from the Zambian government. The company has also stated that in the coming few months, it will be suing the government for US$2 billion for allegedly abrogating the Kansanshi Development Agreement. Surely, is this a company whose interests our apostle, our government should be made to defend and promote? There is definitely something wrong with those in government who are handling these issues. As we have already stated, it's either they have been bribed by First Quantum Minerals or they are extremely incompetent and not fit to hold the positions they hold in our government.

It is important for the Zambian people and their leaders to know what type of company First Quantum Minerals truly is. First Quantum Minerals is trying to portray itself as a very good investor when it is not. These dealings we are commenting on cannot be said to be acts of a very good investor. They actually project the very opposite.

The question is: should we continue as a nation to grant benefits to such a company? Should our government continue to allow such a company to operate in Zambia? Why should our government continue to be so nice, so kind, so generous to a company that is suing the Zambian state for over US$2 billion?

This behaviour is not new or strange to First Quantum Minerals. We shouldn't forget that this is the same company, the same First Quantum Minerals, that was kicked out of Congo because of similar behaviour or conduct.

We urge the Zambian government to be very transparent over matters pertaining to First Quantum Minerals. Given what is going on, it may be necessary for the Attorney General of the Republic to make known to the Zambian people these legal suits that their government is having with First Quantum Minerals. It is important for the Zambian people to have a direct say on these issues because those who are handling these matters on their behalf seem to be compromised; they continue to give incentives to First Quantum Minerals, ignoring its lawsuits against the Zambian people.

There should be no incentives or other benefits extended to First Quantum Minerals by the Zambian government until it withdraws its lawsuits against the Zambian people.

Why should the Zambian government give First Quantum Minerals title deeds to 600 square kilometres of land in North Western Province when the same company is demanding over US$2 billion from the Zambian people?

It is clear that there is some arm-twisting here, some blackmail here. But why should the Zambian government accept to be arm-twisted, to be blackmailed by First Quantum Minerals in this way? If there are Zambian government officials who have eaten First Quantum Minerals' money, promising to deliver all these things to them come what may, then let them give to First Quantum Minerals that which belongs to them and let the Zambian people hold on to what is theirs because they were not a party to those deals.

It's clear that right now, First Quantum Minerals thinks it is calling the shots. Yes, First Quantum Minerals may be calling the shots now. But for how long? This type of behaviour, conduct or deals cannot be sustained over the long term. It is such things that lead to nationalisations. They can be told to park their equipment and go. And in saying this, we are not in any way advocating anarchy. We believe in the rule of law. But what is happening borders on corruption and not legitimate business dealings. And the law punishes such conduct and practices.

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