Zambia should seek greater benefits from mines - CTPD
By Gift Chanda
Thu 07 Nov. 2013, 14:00 CAT

ZAMBIA, Africa's leading copper producer, should seek greater mining contribution through taxes to enable the country get more benefits from its main natural resource, according to the Centre for Trade Policy and Development.

The CTPD said there was need for a much bigger contribution from the mines to the country's fiscal status. Copper mining is Zambia's economic lifeblood and a key employer in the southern African country of 13 million people.

But copper's contribution to the overall tax take is minimal and has been brought into focus recently with the revocation of the Statutory Instrument 89 which finance minister Alexander Chikwanda introduced to allow mining firms to export copper concentrates and ore tax free.
On Monday last week, President Michael Sata reversed SI 89, which was to be in force up to September 30, 2014.

The SI was to reverse the November 2011 decision of the government to impose a 10 per cent export levy on copper concentrates and ores to encourage value addition to copper exports and improve accountability in the vast mining sector.

"President Sata was within his right to revoke the SI 89 because as a country we need to see a much bigger contribution from the mines to fiscal status," CTPD board member, Trevor Simumba, said in an interview.

"The SI 89 was implemented in a vacuum. It was not done transparently and that is why there are lot of problems with it."

Simumba explained that if the SI was implemented transparently, Chikwanda should have ensured that the mines gave something away too.

"For instance, if you are going to allow mines to export the concentrates as the minister said, and we know that they had stockpiles, the minister should have insisted that the mines should use Zambian registered transporters and railway lines so that we gain some revenue as country as well," he said.

"...but to wholesale the copper ore by giving it away for free like that is not correct."

He said Chikwanda should have sought consultancy beyond government officials to ensure that the country benefits from its natural resource - copper.

Copper output in Zambia is expected to rise from 800,000 tonnes this year to 1.5 million tonnes in 2017 as foreign companies invest in expanded capacity.

"As civil society, we feel that there is need for the government to consult all stakeholders," said Simumba.

"It is not just about talks between the government and the mines."