COMMENT - This is a momentous day. The EFF in South Africa organized a huge march of an estimated 50,000 people, painting seas of Chavez red berets and clothes, at South Africa's most powerful financial institutions, the Reserve Bank, the Chamber of the Mines, and the Johannesburg Stock Exchange or JSE. They met with the CEO of the JSE, and made the following demands:
To the Johannesburg Stock Exchange, we demand the following:
1. All companies in the JSE should move towards socialization of their ownership, meaning that they should give real and meaningful shares to their employees, who will in turn receive dividends at the end of each financial year. A minimum of 51% of all JSE companies should be owned and controlled by workers. This is different from the BEE schemes which empower fewer individuals.
2. All companies represented in the JSE must introduce a minimum wage of R4500 for all their workers, and taking into consideration the sectoral minimum wages contained in the EFF Elections Manifesto, which are: Mineworkers: R12 500 per month, Farm workers: R5000 per month, Manufacturing workers: R6500, Retail Workers (Cashiers and Retail Store Assistants): R5000, Builders: R7000, Petrol Attendants: R5000, Cleaners: R4500, Domestic Workers: R4500, Private Security Guards: R7500, Full time Waiters and Waitresses: R4500
3. All companies in the JSE should ban labour brokers, and permanently employ their workers with proper medical aid and retirement benefits.
4. All JSE companies and all companies in South Africa should implement the principle of equal work for equal pay for all workers irrespective of race, class and background.
5. All companies and corporations that have majority of its businesses in South Africa should have the primary listing in the JSE and their Head Offices in South Africa.
6. All companies in the JSE must procure the upstream and downstream goods and services from township and rural based economic role players owned by historically disadvantaged individuals.
7. All the retail stores in the JSE should source a minimum of 70% of their goods and services from South African producers, particularly food, confectionery, beverages, textile, leather, furniture, plastic, and many other basic products that are traded in South Africa.
8. Urgent action plans and programmes from all companies and corporations in the JSE on how to increase and sustain the labour-absorptive capacity of their companies. Thoroughly drafted human resources, skills transfer, and training and education provision with sustainable care programmes should accompany this.
9. Each and every company in the JSE should adopt a minimum of 5 schools in townships and rural areas and make that each adopted school has access to quality services, including computer labs, laboratories, libraries and access to high speed internet.
10. Each and every listed company with the total turnover of R1 billion and above should adopt one of the Technical, Vocational Education and Training (TVET) Colleges and assist with all the basic necessities of a TVET college.
11. Each and every company in the JSE should adopt a minimum of 100 students and assist with their higher education and training programmes and bursaries from registration, tuition, residence, food, books, and transport money for their adopted students.
12. All companies in the JSE should make massive investments in all parts of South Africa with the aim of decentralizing economic activities and industrial programmes to all parts of the country.
13. Urgent action plans on how to decentralize South Africa’s economic development from the existing centers of economic development to other parts of the country.
14. Urgent development and implementation of Corporate Social Investment Plans, which will bring real value and benefits to communities where business operations happen.
15. All JSE companies should have all their trading bank accounts with South African banks and should be willing to be subjected to scrutiny on illicit financial flows, transfer pricing and profit shifting.
16. End to expatriation of profits to developed countries, and mandate all companies and corporations to declare publicly transactions between subsidiaries in details for the tax authorities to access necessary information to collect maximum tax due to public purse.
17. All JSE companies should commit to usage of South African based professional services, such as those for auditing, accounting, legal, marketing and all other basic services.
Today's march:
(NEWS24 SA) The Great EFF Mass Protest March
Chris Kanyane
By Chris Kanyane
Tuesday, October 27, 2015
We have seen the jihad launched by university students across the country last week. And today, this Tuesday, with EFF mass protest action across Gauteng we witnessed something that is even staggering in terms of sheer appeal, high level organizing that made the mass protest march very peaceful.
The City of Johannesburg was swimming under the blockbuster red sea of EFF juggernaut supernova protest march. The protest march in terms of its reach, depth, creativity and scope was unprecedented. The atmosphere was livid.
It was a 16 kilometres long walk of raw passion.
One lady who participated in the march expressed her personal exuberance as follows:
“I was just out there in the red sea of thousands and thousands of people, holding hands with strangers. What a sensation I felt! I felt like I belonged. I was so excited – so inspired. A young guy whispered in my ears “this is history, this is history”. I smiled and wiped my face with a comfort cloth. I just wanted to become part of something beautiful”.
photo eff
EFF is an explosive big tent protest movement that has surely energised people on the grassroots. It encapsulates the raw passions of grassroots communities from all age groups but on the main it is powered by youthful energy and dynamism. Members and supporters are passionate, emotive in their participation. But there are not from Mars – these are simple ordinary folks, Jabulani, Sipho, Themba, Mpho, Tebogo, embracing a cause that they believe in.
There has been a false theory that has clouded our view and the surging of the EFF. We base the premise of our analysis of the EFF on the charisma of Julius Malema as the leader. But it seems every person involved with EFF brings some spark of charisma. The charisma seems to be evenly spread across the members and the supporters. And when they gather there is a national sensation.
The movement has no baggage and no cronyism. That makes it exciting for every person to participate freely. Passion and exuberance defines participations. Within those passions are aspirations and hopes.
The grand meeting place for the EFF protest march was central Johannesburg – the Mary Fitzgerald Square , the cosmopolitan cultural mecca of South Africa. The Square is thus named after Mary Fitzgerald. A woman considered to be the first trade unionist in the country.
Just a brief overview bio of Mary Fitzgerald so as to contextualise the great EFF march. In 1912 and 1913 with a burst of enthusiasm Mary Fitzgerald led arguably the first major protest march in South Africa – leading the miners in front.
With the miners increasingly organised through her efforts there was a need for a communication. Mary Fitzgerald founded and edited the radical publication known as The Voice of Labour. She used the publication as a vehicle for confronting capitalism as expressed through financial institutions.
Mary Fitzgerald further organised burial societies for the Black miners who were dying in large numbers due to poor working conditions underground. The workers were working under appalling conditions, with mine accidents and deaths ever accumulating.
The EFF mass protest march included in its key demands freed education from crèche to university. That is the currency of the time that has caught the national conversation since last week.
Early in the morning people across Gauteng, from townships such as Soshanguve, Mamelodi, Soweto and so on started self organising – sporadic small groups coalescing on street corners waiting for the transport that they organised and paid from their pockets. This notwithstanding that majority are poor and live in conditions that should not exist in the 21st century.
By about time going to noon tens of thousands of people were on the move, flooding the streets in central Johannesburg- self organising themselves.
Today some people tend to consider mass marches, sit-ins, demonstrations as scary, unruly and out of fashion, so mass protests on the scale of EFF should be denounced. I invite those who suffer this fixation to realise that genuine change is made from bottom up – people feeling the pain expressing it in its raw form.
We can consider what was achieved last week by #FeesMustFall movement. If there was no such protest march to Parliament and the Union Buildings students could not have forced the hands of the authorities for 0% increase in university fees in 2016. Through sheer swarm intelligence the students outfought and outbeat the authorities and emerged victorious.
Who can forget what happened in Cape Town? The swarm intelligence that went into the conception, planning and execution and ultimate storming of Parliament; the thoughtful, meticulous reading of the police movements by students and then launching a push: outsmarting, outflanking the armoured police and soon within a few minutes they were knocking on the doors of the National Assembly. It was a victory for them.
Today’s bad economic conditions (with the growing ranks of the poor) are undermining the very idea of progress and prosperity.
A sense of history demands us moving away from being fiction makers and start addressing in a sober – sobering practical reality, the worsening conditions of people on the ground – the masses are steeped in grim lives, trapped by poverty and depression.
As a nation we tend to equate countless promises with achievement. After piles of promises made we go into a spree of premature celebration, as if just by making those promises achievement is made. And that is where we are with persistent waves of uprisings, at the ward level, community level, and national level.
A country, like a person, cannot leave on luck perpetually. Luck and chance can only carry a person or a nation so far. As of now we have exhausted our stock of luck.
Labels: ANC, CHAMBER OF MINES, EFF, JULIUS MALEMA, NEOLIBERALISM
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Diversifying the economy: Reducing risks from mining
June 20, 2012 |
MINING MATTERS By CHAMBERS OF MINES ZAMBIA
THE present over-dependence on copper is true to the proverbial saying of ‘putting all eggs in one basket’. It has been apparent, from many stakeholders in the economy, that the mines hold the key to the country’s overall economic growth through increased GDP, tax revenues, spill-over effects to other sectors of the economy and employment.
This line of thought has inevitably led to stakeholders exerting a lot of pressure on the mines to contribute much more than they are doing, often regardless of the world economic environmental factors and the risks against which the sector is operating.
Specifically, there is often little consideration of the costs of production of individual mines because typically, revenues are taken as the yard stick in the performance of the mines.
There is, therefore, a strong case for policy measures to be implemented that facilitate the growth of other sectors in order to reduce this burden on the mines. For instance, the mines are not large job creators due to the capital intensity of their operations, yet agriculture and manufacturing could employ larger numbers of people. Statistics show that the country’s potential in agriculture is not fully exploited. Out of a total of 7.5 million hectares of land, 4.2 million (58 percent) hectares are classified as medium to high potential for agricultural production while 12 percent is suitable for arable production, with only an estimated 14 percent currently cultivated.
These two sectors, agriculture and manufacturing, also have the greatest potential for creating value-addition compared to mining. The tourism sector also holds greater potential to create jobs at various skill levels than mining. Each of these other sectors individually and collectively would substantially add to economic growth; increase the tax base and earn foreign exchange.
Getting other sectors moving, so to say, cushions the economy from externally-induced shocks and internal imbalances from time to time. For instance, the effects on the Zambian economy of reduced demand for copper and the consequential low world prices could be off-set by exports of processed agricultural goods or electricity; ensuring stability of the exchange rate of the Kwacha and keeping inflation low.
There is also a long-term perspective to this. The mines are a wasting asset and sooner or later, the ore will finish. It is also acknowledged in economics that the mines have a technical life and an economic life. The technical life refers to the size of the ore reserves and the extractive period given a specific technology. This can go on for the period of the ore availability. But there is also the economic life; which can be any time soon. This refers to viability of mining operations. This is influenced by many economic factors, including demand, supply and prices; financial markets; developments in technology; changes in fiscal and monetary policies, among others. Each of these has the potential to make mining not viable and mines can close, like some did during the world financial crisis of 2008. Most mineral-dependent countries without a diversified economic base were caught truly napping, budgets were thrown to the wind, jobs were lost, inflation rose, shortages of goods and services were experienced and some governments almost crumbled due to discontents.
There is, therefore, more to the need for the diversification of the economy away from mining to other sectors but should not mean abandoning mining. Info@mines.co.zm
Labels: CHAMBER OF MINES, ECONOMIC DIVERSIFICATION, MINING
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COMMENT - The effective tax rate for the mines in Zambia isn't even close to 31%. PAYE is not taxes paid by the mining industry, they are taxes paid by workers. Your tax liability doesn't defer to the people who work for you. You might as well say that the copper purchasers paid the taxes, which would be more accurate, but still wrong.
The Zambian government should engage foreign auditors- Chamber of mines
TIME PUBLISHED - Wednesday, December 14, 2011, 4:31 pm
NCHANGA Mine rescure Team B Captain Jonathan Kolala inspects air underground during the Zambia Mine Rescure Association competetion at Namundwe MineTHE Chamber of Mines of Zambia has recommended that the Government should appoint an independent international auditor to carry out compliance audits to address concerns expressed by stakeholders and members of the public on whether the mining companies are honest enough in their voluntary declarations.
Chamber general manager Frederick Bantubonse said in a statement obtained in Kitwe yesterday that it was imperative that assertions by some parties were addressed and subsequently appreciated.
Mr Bantubonse noted that in January 2008 late president Levy Mwanawasa told the nation that the Government had discovered that effective tax rate in Zambia was the lowest in the world at 31%.
The Government then wanted the effective tax rate to be increased to 47%.
He explained that after the budget was presented to Parliament in 2008, which proposed to introduce, among others, windfall tax, the mining industry contracted tax consultants to advise on what the effective tax rate would be once the new tax measures were introduced.
The consultants informed the industry that the effective tax rate would be well over 80% far above the 47% that was targeted by the
Government.
[Huh? That's insane. - MrK]
“The perception by many people in Zambia seems to be that the abolition of windfall tax means that mining companies have been exempted from paying taxes,” Mr Bantubonse said.
He said it was not the case as mining companies pay other taxes including company tax, minerals royalty tax, Value Added Tax, and others.
The company tax at 30% of profit, in particular, would increase greatly once carry over losses and capital allowances are liquidated and more mining companies become tax liable.
[And yet taxes would disappear completely, if the price of copper collapsed. - MrK]
“There is still, therefore, a form of windfall tax in operation called variable profit tax which is based on profit and is triggered when a mining company makes operating profit of over eight per cent,” Mr Bantubonse explained.
[That's BS. The 'variable profit tax' is not 'a form of windfall tax'. The variable profit tax can only be calculated to the degree that the mining companies deign to declare any profits - which they don't. Glencore's Mopani was caught redhanded using 'price transfer' or 'money laundering', and the Finance Minister did nothing. - MrK]
He said in view of the misunderstanding, the chamber was recommending to the Government to engage an independent international auditor to carry out compliance audits.
Efforts to get mines minister Wilbur Simuusa and his deputy Richard Musukwa failed as their mobile phones were not reachable by press time.
[Times of Zambia]
Labels: AUDITING, CHAMBER OF MINES, FREDERICK BANTUBONSE
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COMMENT - This is a direct betrayal of the electorate. The Zambian state must collect the $1.3 billion a year it is owed. Anything less than that is an insult. The attempt to paint income tax by workers as taxes paid by the mines is trickle down brainrot at it's worst. If it is the same, then why don't the mines object? It doesn't bare two seconds of contemplation. Also, is extremely disrespectful to the people of Zambia, that openness about decisions of this magnitude only takes place after the fact, after the decision has been made. This is not democracy.
Government won’t re-introduce windfall tax – Veep
TIME PUBLISHED - Tuesday, November 15, 2011, 8:28 am
VICE-PRESIDENT Guy Scott has said the Patriotic Front (PF) government will not re-introduce the windfall tax to save the economy from collapsing and urged Zambians to seek relief in the US$200 million royalty tax that has been gained from mining companies.
Dr Scott, who was reacting to statements by some trade unions and stakeholders that
the PF cheated people using the windfall tax said the government had
managed to remove US$200 million from the mining companies and transferred it to the workers in form of Pay-as-You-Earn(PAYE).
Dr Scott explained that whether the money drawn from the mining companies would be referred to as windfall tax or mineral royalty, the fact remains that the Zambian government had gained a huge amount of money and relieved workers from paying high taxes.
[You did not collect what was owed and is owed, and is going to be owed next year. If copper prices don't collapse in between, which the PF has no control over. When prices return to normal, the windfall will have gone. Mining companies will be gone too. - MrK]
He said the new PAYE in the 2012 national budget was the start of better things to come while the taxation system was still under review. The vice president said the US$200 million gained from the increased mineral royalty tax had been imposed on the mining companies to close the gap created by the reduction in thresholds on PAYE and seeks to earn ordinary Zambian workers an average of K1 million on their take-home-pay.
[Now that is all fine and dandy, but it is no $1.3 billion in taxes - income tax, and dividends to ZCCM-IH, which is what is owed every year, with the present taxation system. And it will be easily collected through the Windfall Tax. So collect it, or get out of the way. - MrK]
In an interview in Lusaka yesterday, Dr Scott said the increased mineral royalty tax had not reflected in the 2012 national budget because the amount had been captured by the mineral royalty tax. The vice president said the mineral royalty tax was the best form of tax because it stops mining companies from cheating government in terms of how much they were making.
[Then raise it to 20% of turnover, and drop all other taxes. The mineral royalty tax IS a great tax, but 6% is not enough. Plus, I want to see the return of all the taxes that have not been paid since privatisation. - MrK]
Dr Scott said the government had not stopped managing the tax system to ensure that it benefits the Zambian people. He said the tax was determined by the volumes of copper they had sold internationally and that systems had been out in place to ensure that Zambians benefit from the system.
Union president Mundia Sikufele said in Kitwe yesterday that the union felt betrayed because the windfall tax was one of the major items the PF used during the campaign.
“What matters is how much the mining companies will contribute to the national budget whether it is called windfall tax or mineral royalties. Our aim was to save at least US$200 million so that it goes to the workers in form of tax relief,” Dr Scott said.
[$200 million is still $1100 million short. - MrK]
The vice president said the government had succeeded in removing US$200 million from the mines to transfer it to the workers as the PF administration moves to meet its campaign promises.
The new budget has provided for the tax free bands that start from a minimum of K2 million that will fall out of the tax bracket which means that the workers earning that amount would not be subjected to PAYE.
But National Union of Miners and Allied Workers (NUMAW) has questioned the Government for what it called back peddling on the re-introduction of the windfall tax. Union president Mundia Sikufele said in Kitwe yesterday that the union felt betrayed because the windfall tax was one of the major items the PF used during the campaign.
And Chamber of Mines general manager Fred Bantubonse said it was important that the Government realised that dialogue with stakeholders before the re-introduction of windfall tax was the way forward. HE Civil Servants and Allied Workers Union of Zambia (CSAWUZ) has also urged Government to pursue the introduction of windfall tax if Zambia was to move forward.
Meanwhile, the German Government is expected to send its director of Southern Africa for the Ministry of economic corporation and development Dr Ingolf Dietrich to Zambia for talks with the minister of Finance Alexander Chikwanda. The talks would establish entry points in the national budget which the German Government would fund the one per cent that had remained for donor partners. In an interview in Lusaka on Sunday, German Ambassador to Zambia Frank Meyke said the discussions will take place on November 29 and November 30 November, 2011.
Mr Meyke said the German government was impressed with the national budget because it gave workers greater relief on their take-home pay which would promote investments and saving.
[Times of Zambia]
Labels: CHAMBER OF MINES, FREDERICK BANTUBONSE, GUY SCOTT, MINING, PAYE, PF, TREASON, WINDFALL TAX
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COMMENT - 1) Every time the mines threaten to leave, they pay a $30 million fine; 2) when they leave, all their assets revert to state ownership within 30 days. Sounds good to me.
Zambia miners ask government to facilitate tax policy
Monday, December 20, 2010, 13:37
The Zambia chamber of mines has asked government to facilitate predictability of the tax policy regulations to enable the industry contribute positively to the growth of the economy.
There have been calls from various players for the government to revise the tax regime in the industry to enable the country benefit from the mines, Zambia’s crown jewel, since copper prices have soared high above USD 8,000 per tonne. Chamber of mines in Zambia president Mr Nathan Chishimba noted that uncertainty in the policy formulation was creating anxiety among investors.
Zambians should focus on the future and its long term benefits that are accruable from the industry. The mining industry requires collaborative effort and networking among sector players to further spur sustainable growth for the country. For the industry to sustain growth and contribute to national development positively, sector players should ensure transparency and efficiency in the way they ran affairs in the industry.
Mr Chishimba speaking during the 2010 International Mining Conference and Exhibition hosted by Konkola Copper Mines in Chingola noted that said since the year 2000, more than USD 5 billion investment had been made to the industry, an indication that the sector was growing.
He said certainty of policies in the industry was vital, now than ever before as the players were focusing on one objective of steering the industry to higher heights. The chamber, he said, formed the column which could spearhead the common vision of resolving the problems the industry was facing rather than existing just to criticize the partners.
The investment in the mining sector since 2000 had resulted in tripled copper production from 250,000 tonnes to more than 700,000 this year and attributed the growth to the contributions from various mines.
The chamber of mines envisions that production, if enhanced by good and reliable policies, could help increase copper production to one million tonnes target by the year 2012. And government has asked mining companies to help sustain growth in the industry and job creation in the aftermath of the rebound in the price of the mineral, copper, especially now that the financial crisis was over.
Mines minister Mr Maxwell Mwale said it was government’s desire to support companies that remain vibrant and steadfast even in an event that another shock occurred in the industry. He said that “I note that Zambia’s largest mining house, KCM, has led in many areas. The most notable is the expansion program and a commitment to make Zambia a global giant in copper production.”
The mining industry would continue to be the main driver of the Zambian economy. The industry was the major earner of foreign exchange and highest contributor to the growth domestic product of about 11% in 2009.
He said that “As Government, we note that along these investments has come a massive transfer of mining and construction technology into Zambia. This will help in the improvement of efficiency. We are convinced that with more mining firms following KCM, our industry should be able to make progress towards attaining the 20% contribution to GDP by 2015.”
[Steel Guru]
Labels: CHAMBER OF MINES, NATHAN CHISHIMBA, WINDFALL TAX
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COMMENT - More shilling for corporate profits from the Chamber of Mines.
Mining companies not obliged to develop areas they operate in - Bantubonse
By David Chongo in Solwezi
Mon 19 July 2010, 15:10 CAT
MINING companies are not obliged to develop infrastructure in the areas they operate but they can do community social responsibility projects on voluntary basis in order to be viewed as good citizens, says Chamber of Mines of Zambia general manager Frederick Bantubonse.
And Centre for Trade Policy and Development (CTPD) executive director, Saviour Mwambwa has challenged government to reveal the contents of ‘secret’ Development Agreements that it signs with mining companies to residents of investment areas.
Speaking at a public discussion hosted by Caritas Solwezi in conjunction with CTPD on the subject: “the mining tax debate: an endless tug of war’’ on Saturday, Bantubonse said there were no such conditions requiring mining firms to build developmental structures in their areas of operation.
Bantubonse said it was not clearly stated in statutory regulations whether the mining firms had a strictly assigned role in developing areas where they worked part from their core businesses.
“It’s not a condition that you should build a road; it’s voluntary for you to do so. If Lumwana wants to do it, let them build but that is the responsibility of the government. There is division on who should do what and who should do what. Infrastructure development is up to the central government to do that,” he said.
He said residents of North Western Province should not blame the mines and transporters for causing damage to the roads in the region, saying even in Chingola, truckers to Kasumbalesa border were not charged anything despite damaging roads.
He said if there was a remedy, it should be introduction of tollgates.
And Bantubonse has described as unfortunate the decision by Lumwana Mine to distribute information booklets on uranium to villagers in chief Mukumbi’s area in English.
He said uranium was governed by rigid regulations, which needed to be well understood by concerned parties but advised that people should raise alarm if there was something wrong in their areas.
He was responding to a concern by chief Mukumbi’s son Kennedy Muluka who questioned why “illiterate” people in his area were handed sensitive uranium information in English which most of them could not understand.
And Mwambwa said there was growing dissatisfaction from people in areas where mining firms were not contributing satisfactorily to local development.
He said the local people were not seeing the benefits of having such huge investment in their areas, saying such situations left people wondering whether the secret agreements really contained local people’s concerns.
“The ordinary people are not seeing the benefits. Local people are supposed to share the revenue based on a certain percentage with the central government. Certain amounts should be allocated to them; a portion should be returned to specifically develop these areas where resources are coming from,” he said.
Mwambwa observed that it had now become a tendency for central governments to forgo their responsibility to develop infrastructure for citizens, leaving it in the hands of financial institutions like the World Bank.
“Infrastructure is not developed here. Why should the World Bank come to develop the province when there is money from the mines? Government should come in the open and explain to the people how these things (development agreements) are done. There is no transparency from the government on these issues,” he said.
Mwambwa advised that central government should deliberately draw up a policy in the constitution that would guide the specific percentages in benefits to the concerned local people regarding development agreements.
Meanwhile, Rodney Machila, sitting in for deputy permanent secretary Nkolola Hazemba and other stakeholders to the debate, expressed displeasure over the apparent boycott by officials from the local council and the two mining companies Kansanshi and Lumwana.
Labels: CHAMBER OF MINES, FREDERICK BANTUBONSE
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Chamber proposes 10pc stake for locals
by Business Reporter
11/02/2010 00:00:00
ZIMBABWE’S Chamber of Mines has made an eleventh hour proposal for the reduction of the government-fixed company shareholding threshold for indigenous Zimbabweans from 51 percent to 10 percent.
Under regulations published on Tuesday, and in line with a law passed in 2008, Zimbabwe will from March 1 require companies to maintain a 51 percent ownership by locals.
Prime Minister Morgan Tsvangirai has moved to allay investor fears by calling the regulations “null and void”, but Youth Development and Empowerment Minister Saviour Kasukuwere told parliament on Wednesday there would be no retreat.
The Chamber of Mines president Victor Gapare claimed on Thursday that the government had in principle agreed to its proposals.
"We have given the government our proposals that equity (should be) a minimum of 10%, then empowerment credits will make up to 15% and this will cover local procurement," Gapare said.
"One of the concessions the government has given is that if a company lists on the local stock exchange, that will be considered as local empowerment mainly because most of those shares will be bought by local pension funds.”
Mining group Rio Tinto which owns a large stake in diamond producer Murowa Diamonds has already raised concern over the impact of the law on its diamond mining operations.
Other foreign investors in the banking sector, agriculture and mining are also reportedly apprehensive about the new reforms which President Robert Mugabe has backed.
Labels: CHAMBER OF MINES, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), NEOLIBERALISM
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COMMENT - Outrageous! These people are basically arguing that they don't need to pay income or revenue tax because they are already paying council taxes. The ordinary citizen is taxes far more heavily than the mining corporations are. Imagine a worker turned around and said - I don't need to pay PAYE, I'm already paying council taxes. Which I would support by the way, because unlike the copper mines, workers DO pay income tax. Workers get double taxed, so mines won't have to be.
Chamber of Mines speaks out on Tax payment.
By Kabanda Chulu in Kitwe
Wed 10 Feb. 2010, 11:10 CAT
THE Chamber of Mines, a consortium of mining companies in Zambia has stated that a false impression has been created that the mines do not want to pay taxes.
Commenting on
government’s intention to seek high interest loans to finance infrastructure projects like roads damaged by mining activities, highly placed sources that preferred anonymity said all taxpayers including the mines contribute to the central treasury.
The sources said that government was independent enough to supplement taxes through borrowing to finance public projects such as roads and other infrastructure.
The sources advised people to bear in mind that the mines paid taxes that go into the national treasury.
“We are not in a position to know the distribution of resources from the national treasury and government is independent enough to decide on how to supplement taxes through borrowing to finance public projects such as roads and other infrastructure,” said the sources.
“And a false impression has been created that mines don’t pay taxes but money is paid into the national treasury including VAT (Value Added Tax), increased PAYE (Pay As You Earn), import and customs duty and several domestic taxes including council rates.”
Nevertheless, the sources stated that the Chamber of Mines was working with the government on various developmental projects and was looking forward to embrace the public-private-partnership (PPP) framework.
“We are happy to get involved in projects under PPP but this will be decided by individual mining companies depending on their corporate policies and generally it is our desire to work with government on various developmental projects,” said the sources.
Labels: CHAMBER OF MINES, WINDFALL TAX
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Zim mining chamber proposes softer laws
by McDonald Dzirutwe
28/10/2009 00:00:00
ZIMBABWE'S Chamber of Mines has made proposals for the country’s mining bill that seek to strike a balance between attracting investors and indigenisation, to reassure foreign investors worried by talk of nationalisation.
An initial bill, which sought to force foreign mining firms to sell 51% shares to locals and gave 25% equity without paying in some companies, raised concerns among investors, but lapsed before it was passed.
That proposed bill led to the withholding of badly needed investment in Zimbabwe, which is struggling to recover from economic collapse under a unity government between President Robert Mugabe and old rival Morgan Tsvangirai.
Following the collapse of commercial agriculture [massively aided by Western economic sanctions such as ZDERA - MrK], mining has become the top foreign currency earner, with gold alone bringing in a third of total export earnings to a country that says it is unlikely to receive bilateral assistance soon.
As part of its proposals, seen by Reuters on Wednesday, the chamber of mines has asked the government to set mining firms a target of 25% local ownership within 10 years and use a scorecard system to measure empowerment levels in the sector.
The government will decide whether to include the proposals in a long-awaited mining amendment bill that is expected to be debated in parliament before the end of the year.
The mining chamber’s proposals, which have already been presented to the country’s mining ministry, require mining companies to set aside a minimum 10% equity for acquisition by locals within 10 years.
The chamber of mines said social and infrastructure spending, assistance to small-scale miners and release of mineral rights to government by miners would all contribute to the empowerment scorecard.
The chamber also proposes that miners be compelled to attain an empowerment score of 7% after three years, 18% after six years and 25% after 10 years.
“The empowerment score shall comprise the direct and indirect Zimbabwean equity ownership in the company plus the equity equivalent of other qualifying empowerment benefits provided by the company,” the chamber of mines said.
The chamber’s proposals are in line with a similar drive in South Africa, which has adopted the black economic empowerment (BEE) to include blacks in the mainstream economy after years of exclusion under apartheid.
South Africa, the biggest producer of precious metals, adopted BEE legislation four years ago compelling mining companies to sell 15% of their assets to black investors by 2009 and 26% by 2014.
Some of the key players in Zimbabwe include Impala Platinum Holdings (Implats), the world’s second largest producer of the metal, which has the biggest mining investments in Zimbabwe. Its bigger rival Anglo Platinum and Rio Tinto also have mining interests in the country.
Zimbabwe has the world’s second-biggest platinum reserves and large deposits of diamonds, coal and nickel.- Reuters
Labels: BEE, CHAMBER OF MINES, CORRUPTION, NATIONALISATION, NEOCOLONIALISM
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Zambia needs development plan - Chamber of Mines
By Zumani Katasefa in Kitwe
Wed 28 Oct. 2009, 04:00 CAT
CHAMBER of Mines assistant general manager Lawrence Chileshe has said there is need for Zambia to have a development plan that gives direction to help various sectors to grow.
Presenting a paper during a post-budget tax review workshop at Kitwe’s Hotel Edinburgh, Chileshe also said there was need for the government to use tax relief strategies as one of the tools in promoting growth in different sectors of the economy.
“There is need for the country to have a development plan that gives direction, to help various sectors grow and also maximise on the benefits that the nation will derive from each sector,” he said.
Chileshe added that Foreign Direct Investments (FDIs) would remain a very important source of financing.
“African continent continues to lag behind in attracting FDI. Over the years, it has been only attracting as little as three per cent of global FDI inflows, Zambia has been attracting less than one per cent of the said three percent of FDI that Africa receives,” he said.
Chileshe said the FDI figures were an indication of how much competition there was regarding FDI globally and also how important the level of investor confidence was in attracting investments.
And Chileshe said the 2010 budget did not present any changes in terms of taxation in the mining sector compared to the 2009 national budget.
Chileshe commended the government on its efforts in trying to mitigate the effects of the global financial crisis and the continued efforts to diversify the national economy from over-dependency on copper.
He said the mining sector was the largest foreign exchange earner and one of the major employers in Zambia.
Chileshe said the presence of viable mining houses contributed to the existence and growth of efficient local enterprises.
Labels: CHAMBER OF MINES, DEVELOPMENT, LAWRENCE CHILESHE
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Zim eyes re-admission to bullion market
by Oscar Nkala
12/08/2009 00:00:00
THE Zimbabwe Chamber of Mines (CoM) says the country could rejoin the London Bullion Market (LBM) fold within two years, but warns that this would only be possible if the current rate of recovery in the key gold-mining sector is maintained or exceeded.
Zimbabwe was kicked out of the LBM last year, when its annual gold production hit rock bottom, at just 3 072 kg, compared with slightly over 10 000 kg in 2006 and the high of 27 000 kg attained in 1999. The ouster followed numerous production problems, financial constraints, a worsening power crisis and the nonpayment of a huge debt owed to producers by Fidelity Printers & Refineries, a Reserve Bank of Zimbabwe subsidiary, which, at the time, was the sole buyer and exporter of gold in the country.
Addressing mining industry stakeholders and business leaders at the recent Mining, Transport and Engineering exhibition, in Bulawayo, CoM president Victor Gapare said the prediction of Zimbabwe’s early return to the international bullion market was based on the steadily increasing output from gold-mining since the liberalisation of the economy in February.
He said both the trading and operating environments were generally favourable for producers and this had prompted the return of more players, which had, in turn, resulted in increased gold production.
“As far as trading on the LBM is concerned, this is [based on] producing 10 t/y and there is need for us to show that consistency for two years. At the moment, gold production is picking up. Between January and June, the country saw 1 t delivered, and if this trend continues, within another year, we will be exceeding 10 t,” Gapare says.
He said Zimbabwe stood a good chance of achieving this because the favourable conditions ushered in by the deregulation of trading in the sector could lure more investors. He added that the unity government had managed to reduce the political risk factors associated with investing in the country.
Gapare, however, noted the threat presented by renewed power cuts to a quick rebound of the mining industry. Incessant power cuts had intensified over the past weeks, after Zimbabwe’s neighbours, who supplied power to the Southern African country, decided to reduce supplies by half.
Mozambique, Zambia and the Democratic Republic of Congo each cut their supplies to Zimbabwe to press for the payment of a collective US$57-million debt that has remained unpaid for more than a year. The countries had earlier decided to switch off power supplies completely, but were persuaded to relent.
Zimbabwe’s power generation capacity has been whittled down by ten years of economic meltdown, and the new unity government, comprising President Robert Mugabe’s Zanu-PF and Prime Minister Morgan Tsvangirai’s Movement for Democratic Change, says it needs more than US$600-million to revive the power sector. - Mining Weekly
Labels: CHAMBER OF MINES, GOLD MINES
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Chamber of Mines explains mines’ absence at trade fair
Written by Chiwoyu Sinyangwe
Monday, July 06, 2009 11:51:39 AM
MINING companies have not attended this year’s Zambia International Trade Fair (ZITF) as they streamline expenditure in view of the collapsed international metal prices, Chamber of Mines of Zambia (CMZ) has explained.
Reacting to concerns that none of the mining companies in the country had exhibited this year at the international trade fair, Chishimba said the absence did not amount to shunning. He said mining companies were no longer exhibiting as individual companies but under the umbrella of the Chamber.
“With difficulties we are facing to normalise our operations, we have to rationalise our expenditure,” Chishimba said.
“You remember that this year, we exhibited at the Copperbelt Mining and Agriculture show which had a theme much closer to our hearts…we were able to marshal ourselves and exhibited as one under the umbrella of the Chamber [CMZ]. We gave it full support.”
Chishimba also said the international trade fair was more of a trade show than actual mining.
“But we are not shutting the doors permanently…we are learning to walk before we run. We just want to rationalise our expenditure,” said Chishimba. “We have not really shunned the show as we are looking at participating in the future.”
Labels: CHAMBER OF MINES, ZITF
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COMMENT - I thought the mines already had their stimulus package - the development agreements.
Chamber of Mines calls for stimulus package
Written by Kabanda Chulu and Florence Bupe
Thursday, June 11, 2009 12:23:47 PM
THE Chamber of Mines, a consortium of mining companies in Zambia, has asked the government to provide a stimulus financial package to the mines to mitigate effects of the global financial crisis on the sector.
And Zambia Association of Chambers of Commerce and Industry (ZACCI) chief executive officer Justin Chisulo has said
the government should lend money to the mines rather than increasing its shareholding.
But sources at Ministry of Finance have indicated that it is not possible for the government to find money to finance the mines because only two of the 13 registered mining companies agreed to pay windfall taxes to the government when Copper prices were selling above US$8, 000 per tonne.
Speaking last week, Chamber of Mines general manager Frederick Bantubonse said in the short-term, the government should provide a stimulus package to mitigate the crisis and restore investor confidence in the long-term.
Under the short-term stimulus, Bantubonse said there was need to re-evaluate the tax structure for the mines to maximise production and collect revenue through income tax.
He said this development would boost foreign exchange earnings and increase economic activity with multiplier benefits to the economy in general.
“Currently, mineral royalty tax rate (MRT) is at three per cent, irrespective of the level of Copper prices at London Metal Exchange and we request that MRT rate be graduated at levels of Copper prices as follows, above US$3 per pound at three per cent, at US $ 2 per pound at two per cent and below US$2 per pound at zero per cent,” Bantubonse said. “And in calculating MRT, mining companies must be allowed to offset Copper and Cobalt price participation from gross sales, as these are not realised in the hands of mining companies and mining companies should be allowed to offset selling expenses against revenue, in short royalty tax should be based on realised income and not some theoretical income.”
Bantubonse also said company tax for the mines should be reduced to 25 per cent from the current 30 per cent so that available earnings could be retained for developmental projects.
He observed that Zambia Revenue Authority was applying withholding tax to services provided by foreign companies even when the service was performed outside Zambia such as engineering and design of new processing plants for which there was no capacity.
“It is a disincentive to future investments since the end user of such services generally becomes liable for this withholding tax, whilst we agree with the principle of withholding tax being applied to services performed within Zambia, we request that it should not be applied to services performed outside the country and the rate of withholding tax at 15 per cent is unacceptably high and we request that this rate be reduced to 10 per cent,” Bantubonse said. “Withholding tax is even applied on interest payments on funds borrowed form outside Zambia. For large, projects, it is inevitable that borrowing form foreign banks is required, but cost of borrowing is increased to the extent of withholding tax payments so we request that this tax on interest charged on foreign borrowings be abolished as it discourages borrowing to finance developmental projects.”
He said imposition of import duties on fuel products was a heavy blow to the mining industry.
“Safety rules in Zambia requires that only low sulphur diesel is used underground, however, Indeni Refinery does not produce this type of diesel, which is therefore imported from outside hence we ask for the removal of duty on these low sulphur products,” said Bantubonse.
And Chisulo said the dramatic fall in copper prices had reduced earnings of the mines with the cost of production outstripping revenue.
“It became unprofitable to mine at such low prices and foreign capital in flows have reduced thus making it difficult to borrow easily on the market because such businesses have become a credit risk and government should lend money to the mines,” said Chisulo said. “We are not of the view that government should increase its stake in these mines but to lend them money and agree on repayments terms since the copper price is bound to rebound.”
But sources at Ministry of Finance said it was not possible to find money to support the mines since the budget had already been passed.
The sources further said providing a stimulus financial package would have been possible if the mines had complied with tax payments under the repealed regime which also catered for windfall taxes.
“But only two out of 13 companies agreed (with conditions attached) to pay windfall taxes, the rest refused and they still owe government funds since the mines are still arguing about paying windfalls taxes, so had they paid like elsewhere, these are the same funds that could have been provided to mitigate the crisis,” said the sources.
And when making submissions to the parliamentary committee on economic and labour affairs, Bantubonse said the mining industry was ‘sick’, saying the government should support it since it was the main stay of the Zambian economy.
He said large mining companies such as Anglo American Corporation, Rio Tinto and BHP Billiton had not been spared and had also reviewed their operation costs resulting in job losses.
“However, the Zambian situation is different in that problems started early in 2008 with the enactment of the mines and minerals development Act and the amended Income Tax Act 2008 and these two pieces of legislation resulted in eroding investors confidence and slowing down the growth of the sector as some projects were either deferred or cancelled altogether and the implication of this is that even when metal prices rise some projects will still not be implemented,” said Bantubonse. “So mining industry is ‘sick’ but since it is the main stay of the economy it needs government support so that it can continue playing its role regarding economic development.”
Meanwhile, Chamber of Mines president Nathan Chishimba observed that Zambia will not benefit from attractive copper prices for as long as operating costs remained high in the industry.
In an interview, Chishimba said it was vital for the government to come up with ways aimed at addressing the high cost of doing business for the mining industry if any meaningful gains were to be attained.
“The cost of doing business in Zambia has remained high, not only for the mining industry but every other area. We need to vigorously bring the cost of doing business down if we are to benefit from rising copper prices,” he said.
International copper prices have risen by 61 per cent since January this year, having peaked to US $5,060 per tonne last week.
Chishimba said the high costs of running the industry would eat into profits and exert pressure on mining companies.
“Even though we are seeing a recovery in copper prices, we don’t stand to benefit because costs have remained high. High costs tend to feed into production. There’s need to tackle the cost of infrastructure and utilities,” he said.
On whether the upward trend in copper prices was sustainable, Chishimba said it was dependent on strong economies like China and the United States as these were the main determinants of international market movements.
“We need to learn that the futures of those economies determine demand levels. China’s restocking to a large extent led to the rebound we are witnessing, although market experts have stated that the fundamentals are still weak and the increase in copper prices may not be sustainable,” Chishimba said. “However, there is some level of optimism as well because confidence has begun to return to the international financial markets.”
Chishimba further called for diversification within the mining industry to cushion the country’s economy against the vulnerability in copper prices.
He advised the government to prioritise the implementation of policies that will promote diversification within the sector.
“Zambia still has a broad potential in other minerals than copper, such as industrial minerals and precious stones. What we lack is conducive policies that will promote sub- sectors within the mining industry. We should focus on diversification within the mining industry in order to address the current vulnerability in the industry. We are encouraging the mining sector and other policy makers to make it a policy priority to create a conducive framework that will see other sectors apart from copper to thrive,” said Chishimba.
Labels: CHAMBER OF MINES, JUSTIN CHISULO, ZACCI
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Bantubonse implores legal means to raise govt shareholding in mines
Written by Chiwoyu Sinyangwe
Monday, April 20, 2009 4:31:56 AM
INCREASING government shareholding in foreign mining companies in the country can only be done through a normal business transaction, Chamber of Mines of Zambia (CMZ) general manager Frederick Bantubonse has said.
Commenting on recent indications by mines minister Maxwell Mwale that the government would raise its stake in foreign-owned copper mining firms up to 35 per cent to have a bigger say in their running and prevent mine closures, Bantubonse said there was nothing wrong with the intention provided it was done through legal and commercially accepted procedures.
Bantubonse, however, advised that it was important for the country to critically weigh the benefits and pitfalls of the country increasing its equity in mining companies.
He also wondered the method the government was going to use to achieve its intention of increasing shareholding in mining companies.
"Anybody can acquire shares in any mining company but that should be done commercially...it should be trader-seller relationship. In fact, Equinox is now selling shares in Lumwana and the government is free to buy," Bantubonse said. "Probably the only question that should be asked is: to whose benefit? It is not always every year that shareholders draw dividends and sometimes the same shareholders have to inject in more capital to expand in the activities of the mine if the mine is not making profits...so, should the government get money from schools and hospitals and put it into running the mines? It is not up to the Chamber to answer those questions but all Zambians."
When reminded that the government had indicated that it did not plan to nationalise the copper mines, but would negotiate with the companies and seek to convert debt owed to government into equity, Bantubonse responded: "What obligations? I really don't know how the government is going to achieve that...when the mine is placed under care and maintenance, it is not the same as saying the mines has been abandoned where the government can push to get the assets for free but it means we are not able to produce due to the market conditions and as soon the environment improves, the mine would be re-opened, even next week."
Bantubonse also said foreign mining companies have over the last two to three years poured over US $4 billion of investment in the local mining sector compared to less that US $100 million which was injected in the country's lifeblood two years preceding the privatisation process.
Mwale recently said the government would target a stake of between 25 to 35 per cent from the average of 15 per cent and that mining firms would soon be informed of the new plan. The new plan cheered mine unions who had been urging the government to take a bigger stake in the mines to exert influence, prevent mine closures and save jobs.
Labels: CHAMBER OF MINES, FREDERICK BANTUBONSE, NATIONALISATION
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Chamber cautions mine owners
By KANGWA MULENGA and REBECCA CHILESHE
THE Chamber of Mines has appealed to mine owners to exercise caution before making final decisions on future operations of their mines even in the face of the global financial recession which has affected the mining sector globally.
Chamber of Mines president, Nathan Chishimba, said in an interview yesterday that it would be beneficial for both mine owners and Government to exercise maximum restraint when making decisions that would affect the operations of the mines.
He also appealed to Government to consider talks with mine owners about the future prospects of mines in Zambia following the drop in metal prices globally.
Mr Chishimba said there was need for mine owners and Government to make productive decisions for the mines to continue operating.
“This is a very difficult period for the mining sector not only in Zambia but globally,” Mr Chishimba said.
And Mr Chishimba said there was need for Government and Glencore to meet and discuss comprehensively on the way forward before implementing the directives by Government that Glencore should surrender assets of Mopani Copper Mines (MCM) in Mufulira and Nkana Copper Mines in Kitwe.
Government last week ordered Glencore to surrender the assets following the decision by the investor to suspend operations at the two mines and place them under care and maintenance until copper prices returned to US$5,500 per tonne.
“That matter can nicely be handled by the owners of the assets but as a chamber, we can only advise that the two parties should sit down and discuss the matter comprehensively on the way forward,” Mr Chishimba said.
And Minister of Mines and Minerals Development, Maxwell Mwale, says systems have been put in place to ensure that assets of Mopani Copper Mine (MCM) in Mufulira and Nkana Copper Mines are secured to prevent asset stripping.
Mr Mwale said in an interview yesterday that other than the measures that had been put in place, it was not possible for Glencore - the owners of the mines - to flee the country because there were a number of legal procedures that were in place.
He assured Zambians that assets were safe and that Government was now waiting for Glencore to hand them over at an appropriate time.
Glencore is a Swiss company which operates the two mines as a joint venture with First Quantum Minerals of Canada, which also owns Kansanshi Mines in Solwezi.
Mr Mwale at a press briefing last Friday ordered Glencore to surrender assets of the MCM and Nkana to ensure continued operations and avoid further job losses in the mining industry.
“We have put systems in place to ensure that assets of MCM and Nkana are secured. The same systems will apply to any other mining company that will in future write to us with intentions of putting their assets under care and maintenance. I can assure you that the assets are safe,” he said.
Mr Mwale said the legal procedures to be followed in such a situation were many and that all of them had to be met before any investor could be allowed to leave.
Labels: CHAMBER OF MINES, GREAT DEPRESSION II, NATHAN CHISHIMBA
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COMMENT - How ironic that the same people who received billions of US dollars in tax exemptions because taxes would be 'bad for business' now want us to accept massive joblosses, because it's 'just business'. I guess everything that is good for Lumwana's shareholders is good for Zambia too, right? It is time for a government that tells the foreign mining companies to take a hike. They take and take and take, and when it is time for the smallest sacrifice, they threaten to leave or have their cronies in the media and society cry all kinds of foul. Either we have a government that benefits the people of the country, or a government of stooges for the mine corporations. Rupiah Banda has a choice to make.
‘Mines’ job-cuts inevitable’
By Times Reporter
THE Chamber of Mines in Zambia (CMZ) has defended retrenchments in the mining industry saying the exercise is inevitable and not intended to pressure the Government to revise the tax regime.
But other stakeholders yesterday insisted that the retrenchments were unjustified, as most mines would remain profitable despite the falling copper prices and global economic meltdown.
CMZ president Nathan Chishimba said in Lusaka yesterday that the retrenchments that the mining companies had embarked on were also being done in other sectors of the economy but received little publicity.
The Zambia Congress of Trade Unions (ZCTU) on Wednesday accused the mining companies of using the copper prices and global financial crisis to hit at the Government over the new mining tax regime introduced this year.
Mr Chishimba said the problems brought about by the falling copper prices and global economic recession were real and the mining companies were ready to dialogue with the Government to come up with the best way of addressing the situation.
“The question of arm-twisting the Government does not arise because what the mining companies are going through in Zambia is happening elsewhere in the world and the best we can do as a country is sit down and discuss,” he said.
Mr Chishimba said the mining companies did not take pleasure in seeing Zambians being left jobless and it was for that reason that the investors were ready to meet with Government officials to resolve the problems.
He further called for calm among Zambians as the mining companies, the Government and other players in the industry attempted to find a solution to the problems.
On Wednesday, President Rupiah Banda expressed concern over the retrenchment of workers by mining companies and called for dialogue to look at other ways of reducing costs without resorting to job cuts.
Mr Banda said the Government would always encourage negotiations in resolving problems facing mining and other investors as a result of falling copper prices and the global financial crisis.
Transparency International Zambia (TIZ), the Southern African Centre for the Constructive Resolution of Disputes (SACCORD) and the United Liberal Party (ULP) separately said the mines previously made huge profits to sustain today’s operations.
TIZ president, Rueben Lifuka said the mining firms had for years made huge profits with little benefit to ordinary citizens and it would therefore be socially irresponsible for them to retrench workers at this critical stage.
He said that most of the workers had been loyal to their employers who should this time around shown signs of being socially responsible by ensuring that the workers remained in employment.
“When the going was good they did not want to share the benefits but as TIZ our advice to them is that they should be socially responsible to the workers who have stayed with them in good and bad times,” Mr Lifuka said.
Saccord executive director, Lee Habasonda said the Government should quickly initiate dialogue with the mining companies in order to avert the retrenchment exercise.
Mr Habasonda emphasised that investors should be socially responsible and it was in difficult times like this that they should be interested in the well-being of the Zambians.
“They are now showing us that their interest is to make money and leave. What we expect from these investors is for them to keep the workers in employment even in difficult times,” Mr Habasonda said.
ULP president, Sakwiba Sikota said that most mining firms would be profitable because of the money they made when copper prices were at the peak and the most prudent thing for them to do was to absorb some losses that might arise as a result of the falling prices.
“The mines have to come up with figures justifying the need to retrench because at the current copper prices, they can still not make a loss. The prices are still high and so they need to explain why there is this need for retrenchments,” Mr Sikota said.
He further said that the firms could not give the recently introduced windfall tax as the excuse for retrenchments because such tax only comes into effect when a certain target has been met.
The opposition leader advised the Government not to take kindly the decisions by mining firms to retrench workers but demand a thorough explanation.
Labels: CHAMBER OF MINES, JOBLOSSES, MINING, NATHAN CHISHIMBA
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Chamber of Mines urges govt leaders to exercise self-control
By Kabanda Chulu
Tuesday September 02, 2008 [04:00]
CHAMBER of Mines president Nathan Chishimba has appealed to government leaders to exercise self-control in order to maintain current economic growth rates. And Zambia State Insurance Corporation (ZSIC) financial and investments director Zingani Phiri said there was no need to disturb the budget cycle because of the state funeral.
During the contribution of K100 million towards the funeral for the late President Levy Mwanawasa at the Bank of Zambia (BoZ) yesterday, Chishimba said the mining sector had continued to grow due to the good policies of the late President.
"When President Mwanawasa was elected in 2001, the mining sector was not performing well but over the years and due to his guidance (President Mwanawasa), the mining sector has continued to grow and just last year, a UK based group of investors voted Zambia as the best mining destination," said
Chishimba. "So we appeal to government leaders to exercise self-control and show good leadership during this solemn moment in order to maintain and sustain the current economic gains."
And presenting a ZSIC cheque worth K20 million, Phiri said the state funeral should not be left to government to handle alone.
"During the reign of the late President, the insurance sector has continued to record positive gains and in appreciation to what late President Mwanawasa did, we are presenting this little token to supplement government efforts because they should not be alone in this funeral," said Phiri.
"We hope this will help in one way or another especially that the funeral was not planned for hence the budget cycle should not be disturbed."
And receiving the donations, BoZ deputy governor Dr Denny Kalyalya said the financial contributions would ease the financial pressures which government is faced with the state funeral.
"We thank the stakeholders for making these contributions and it shows that the late President touched on many lives through his able leadership qualities and we need to remain steadfast to ensure continued growth," said Dr Kalyalya.
Last Friday, Investrust Bank Plc made a contribution of K20 million and so far the Central Bank has remitted K196.5 million towards the funeral.
Labels: CHAMBER OF MINES, NATHAN CHISHIMBA, ZINGANI PHIRI, ZSIC
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Zambia Approves Amendment to Mining Act to Increase Taxes
By Geoffrey Kapembwa
March 26 (Bloomberg) -- Zambia's parliament approved an amendment to the Mines and Minerals Act that will increase taxes and abolish existing agreements between the government and mining companies, the Zambian Chamber of Mines said.
The bill, which will be signed into law by President Mwanawasa on April 1, will lift royalties on sales fivefold to 3 percent and increase corporate income tax to 30 percent from 25 percent. That will raise the effective tax rate on miners to 47 percent from 31 percent.
The government's ``unilateral decision to dishonor existing development agreements'' is disappointing, Fred Bantubonse, general manager of the chamber, said in a telephone interview from the capital, Lusaka, late yesterday. ``This is arm twisting.''
Zambia, Africa's largest copper producer, expects to earn $450 million in additional revenue this year from higher mining taxes as it seeks to benefit from the metal's seven-year rally, Kolombo Mwansa, the southern African country's mines and mineral development minister said on March 4.
The law will result in miners reconsidering any expansion projects because of poor returns, Bantubonse said.
``Any bad law always affects future investment,'' he said.
Copper accounts for about 70 percent of Zambia's export income and production has been rising since the nation sold off state-owned mines 1999, almost three decades after they were nationalized. The proposed increase in taxes comes amid record profits earned by companies including Vedanta Resources Plc., India's largest copper producer, and First Quantum Minerals Ltd., a Vancouver-based miner of copper in Africa.
-- Editor: Athol Bolleurs, Dylan Griffiths.
To contact the reporter on this story: Geoffrey Kapembwa in Lusaka via the Johannesburg bureau at +27- abolleurs AT bloomberg.net.
Labels: CHAMBER OF MINES, FREDERICK BANTUBONSE, MINES AND MINERALS ACT, MWANAWASA
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Mine owners stay put
...as Parley Committee advises them to come up with alternative tax proposals
By Times Reporter
A PARLIAMENTARY Watchdog Committee has advised mining firms to submit alternative tax proposals following their resistance of the mines tax regime proposed by the Government which they claim is detrimental to their operations. The Expanded Committee on Estimates yesterday told the Chamber of Mines in Zambia (CMZ) that they should come up with proposals and submit to the Committee, which would hear their presentation tomorrow.
Appearing before the Watchdog Committee, the CMZ general manager, Frederick Bantubonse said the new tax regime was unfair to the investors and suggested that an urgent meeting to review the levels of taxation be called.
Mr Bantubonse argued that the proposed tax regime by the Government would undermine the operations and sustainability of the mining industry.
He said although mining companies agreed with the principle of fair and equitable distribution of earnings from the mineral resources, the decision to arrive at the new taxes should be agreed through dialogue.
“It is appreciated and understood that as a sovereign State, Zambia has the right to pass laws as it sees fit in the overall national long-term interest. It is in the light of this that development agreements were entered into,” Mr Bantubonse said.
He said the existing Development Agreements (DAs) which set out the long-term relationship between investors and the Government formed the basis for sustainable inflow of billions of dollars in Foreign Direct Investment (FDI).
Mr Bantubonse said since privatisation, copper production had more than doubled to over 500,000 tonnes per year in 2007 and with further ongoing investments, the output was expected to exceed 1,000,000 tonnes in the next few years.
Lusaka Central member of Parliament (MP), Guy Scott (PF) accused the mining investors of been confrontational, aggressive and defensive.
Dr Scott said since this was the second time that the mining investors were appearing before the Committee, it was anticipated that they should come up with proposals that they felt the Committee should present to the House before finally reaching the Government.
But Mr Bantubonse said that the CMZ members had confirmed their willingness to discuss and renegotiate the agreements in the context of the changed economic circumstances.
He argued that the mining industry was highly capital-intensive and served a market that was unique in nature. He further said the industry required continuous investment for its sustenance and growth.
“It is in this context that the tax proposals have to be seen in terms of equitable distribution of the surpluses rising out of the current high prices. A scrutiny of the new mining tax proposals by tax experts has shown that the effective tax rate is in fact significantly higher than those indicated by the Government,” Mr Bantubonse said.
It was at that point that Mr Beene suggested to Mr Bantubonse that they go back and consolidate their proposals on the tax regime. Mr Beene said since the matter was urgent and of great importance, the proposals from Mr Bantubonse should be brought back to the Committee tomorrow.
“Because this matter is so serious, you have to prepare a consolidated proposal which you should bring back on Saturday. We do not usually sit on Saturday but because of the urgency, we have no option but to do so,” Mr Beene said.
He advised that the mining investors should not underrate the role of the Committee, as the House and the Government as a whole took its recommendations seriously.
Mr Bantubonse, however, continued and said that during this period, the extent of investment and cost of operations had increased substantially due to the increases in the prices of commodities, manpower and other inputs. He said these aspects seemed to have been overlooked in the tax proposals.
“Member companies are concerned that implementation of the proposed tax regime in its current form will adversely affect the long-term sustainability of the mining industry and will not be in the national interest.
‘‘We welcome constructive and open dialogue with the Government as soon as possible, to come up with a viable mining tax regime prior to the current Bill being enacted by Parliament into law,” Mr Bantubonse said.
While the Chamber of Mines did not have comments on the aspects of the Income Tax Bill, it was of the view that the portion of it be relevant to the mining industry. As a result, the Chamber was ready to dialogue with the Government before the Bill was enacted.
On the Value Added Tax (VAT) Amendments Bill, the Chamber submitted to the Committee that it did not have any objections to the definition of ‘‘an operating lease’’ and a ‘‘finance lease’’.
Similarly, the Chamber did not have any objections to the clause that states that ‘‘provide for the eligibility of diplomats and other designated officials to claim VAT paid on eligible goods and services’’.
Mr Bantubonse further said that the Chamber did not have objections to the Customs and Excise Bill.
On the introduction of export levy on cotton seed and copper concentrates, Mr Bantubonse said the current position regarding facilities for the processing of copper concentrates into finished copper were not adequate to process all the concentrates arising from operations in Zambia.
He submitted that there should be revision of customs and excise duty on cement, copper, unrefined copper and copper waste and scrap.
“We will accept the principle of fair and equitable distribution of earnings from the mineral resources for all stakeholders. We do not believe that the proposed tax regime for the mining sector will achieve this,” Mr Bantubonse said.
Labels: CHAMBER OF MINES, WINDFALL TAX
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Chamber of Mines nods Levy’s tax indaba
By NKWETO MFULA
THE Chamber of Mines has accepted President Mwanawasa’s invitation to discuss with Government over their concerns on the newly introduced mine tax regime so that misunderstandings can amicably be resolved. General manager, Fred Bantubonse, said yesterday in an interview in Ndola that the mining companies were ready to meet Government to advance their concerns on the new mine tax regime.
“The mining companies are more than ready to meet with Government; that was the reason why we had gone public on the issue,” he said.
Mr Bantubonse said the mining companies had earlier requested for a meeting with Government, which, however, did not materialise. He said the mine development agreements did not only include tax issues but other concerns, such as environmental and local community projects. Mr Bantubonse also refuted allegation that the Chamber of Mines was a cartel for mining companies. He said each sector had its own chamber to look into in the mining sector.
“The chamber represents the interest of the mining companies just like any other association,” he said.
President Mwanawasa has invited mining companies opposed to the proposed tax regime to seek audience with Minister of Finance and National Planning, Mr Ng’andu Magande and Minister of Mines and Mineral Development, Dr Kalombo Mwansa.
Dr Mwanawasa said the mining firms should be prepared to explain to the government why they were not happy with the proposed increase, which was for the benefit of Zambians.
He said mining taxes in Zambia were still the lowest as compared to other countries whose taxes were between 40 and 53 per cent.
The President said Government was just asking for a fair share of the resources to improve the living standards of the ordinary Zambians and that he still could not understand the criticism.
Labels: CHAMBER OF MINES, FREDERICK BANTUBONSE
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