Why should the mines PS sit on FQMO board?
By Editor
Fri 08 Nov. 2013, 14:00 CAT
IT is difficult to understand why the permanent secretary in the Ministry of Mines should be sitting on the boards of First Quantum Minerals Operations, Konkola Copper Mines
or indeed on the board of any mining corporation.
The Ministry of Mines is the controlling authority, the overseer, the regulator of all mining activities in this country. And the permanent secretary of the Ministry of Mines is at the helm of these mining regulating responsibilities.
How can there be no conflict of interest if in the morning, the permanent secretary in the Ministry of Mines is sitting as a director in a board meeting of a mining company planning the mining operations of that company, and in the afternoon is chairing another meeting at the ministry to regulate those same activities? This is not making sense.
We know that the Zambian government, through ZCCM-Investment Holdings, is a minority shareholder in the Zambian operations of most of these mining corporations. But this in itself does not warrant the permanent secretary in the Ministry of Mines to sit on the boards of such corporations. The most the permanent secretary can do is to sit on the board of ZCCM-Investment Holdings, since this is an investing company majority owned by the Zambian government and is not directly involved in mining operations.
Imagine what would happen if, similarly, the governor of the Bank of Zambia - a government institution tasked with the responsibility of regulating the operations of banks in the country - was allowed to sit on the board of Zanaco and Indo-Zambia Bank simply because the Zambian government hold some shares in those banks! What a type of regulation would the governor carry out in connection with these two banks?
There is clearly a breach of fiduciary duty here. The permanent secretary in the Ministry of Mines has a duty to the Zambian government to act in its best interests and he also has a duty as a director of First Quantum Minerals to act in the best interests of its shareholders. Therefore, in this case, there is a conflict of interest. Whose best interests is the permanent secretary in the Ministry of Mines serving?
We should not forget that Frederick Chiluba was successfully sued in the United Kingdom court for the breach of fiduciary duty.
What does the permanent secretary in the Ministry of Mines say when that board he sits on starts to talk about government policy? And now that First Quantum Minerals Operations has sued the government, what does he say to First Quantum when he sits on their board meetings? And what advice does the permanent secretary give to the government concerning these matters? This is like a lawyer representing the plaintiff and the defendant at the same time! Is this acceptable? Is this ethical? Is this right? And this is the government officer who the government should depend on when it comes to its differences, legal or otherwise, with First Quantum Minerals.
In reality, or in truth, the permanent secretary in the Ministry of Mines who is also a director of First Quantum Minerals, is regulating his own company. Is this right? Is this acceptable? Is this the way things should be done?
This opens up one to corruption and abuse of one's office for personal gain. We know that there are good allowances being paid to the directors of these mining corporations. But surely, should government interests be traded on the altar of sitting allowances and other perks accruing to directors of mining corporations?
There is no doubt that the permanent secretary in the Ministry of Mines is serving the interests of First Quantum Minerals Operations and other mining operations better than those of the government. There are certainly government policy decisions that the permanent secretary is more likely to push in favour of the mining corporations than the government. The mining corporations know government policy even before it is announced. But does the government really know what these corporations are plotting in their boardrooms?
It is surprising that the permanent secretary in the Ministry of Mines can sit on the board of a company that is suing government for such gigantic sums of money. And it's not difficult to guess what happens when it comes to licences! Can the permanent secretary deny a company on whose board he sits a licence? Moreover, it is the collective duty of directors to assist the company to get its licences, favourable taxes and other things from government. How possible is it with one hand, the permanent secretary gives concessions to a mining corporation on whose board he sits and with the other hand, he is demanding a fair return for the government from these same mining corporations? Things are not tying up here. There is something seriously amiss here. This whole arrangement stinks of corruption and abuse of office.
In defence of this arrangement, we are told it has been there since Frederick Chiluba's regime, this is the way things have been for a long time. So simply because a wrong thing has been there for a long time, then it should continue forever and ever - with no redemption? This is warped reasoning. We know what type of regime Chiluba led! It was a corrupt one. So the corruption of the Chiluba regime should be continued even under this government that has vowed to stamp out corruption?
No one can deny the fact that the government needs representation on the boards of the mining corporations it has stakes in. But the individuals the government appoints as directors to these companies should not come from the Ministry of Mines, a regulatory institution. There is nothing wrong with ZCCM-Investment Holdings appointing some of its directors or any other individual to represent the government interest on the boards of mining corporations it has stakes in.
There is no good reason for the permanent secretary in the Ministry of Mines to continue sitting on the boards of these mining corporations other than greed and corruption. This is undermining the interests of government and it needs to be put to an end.
Labels: FIRST QUANTUM MINING, PERMANENT SECRETARIES, TAX EVASION
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TEO questions role of mines PS on FQMO board
By Misheck Wangwe in Kitwe and Stuart Lisulo in Lusaka
Fri 08 Nov. 2013, 14:00 CAT
THE Earth Organisation says it is a scandal for the permanent secretary in the Ministry of Mines to sit on the boards of mining companies as a director.
In an interview yesterday, TEO executive director Lovemore Muma said the organisation would demand an explanation from the government and interested groups on why and
how the permanent secretary in the Ministry of Mines was one of the directors at First Quantum Mineral Operations.
But mines permanent secretary Dr Victor Mutambo said only the Minister of Finance could explain his participation on the boards of mining companies as he was the one that appointed him to represent the government.
He is the one who appoints the government director to sit on these mining companies' boards, said Dr Mutambo, adding that the mines permanent secretary also sits on boards of other mining companies as a government representative.
However, Muma said other individuals and mining technocrats within the government through the Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH) could be appointed to serve as board members to protect the stakes of government in some mining giants, rather than the permanent secretary who is on the other hand the regulator of the mines and also has powers to issue operating licences.
He said TEO had no doubt that it was because of such irregularities that strange decisions that were not in the best interest of Zambians were being made on the mines in the recent past and "only the investor and few individuals have benefited, leaving people destitute in their own land".
"In a case where mines contravene the law like we have seen lately in North Western and other mines on the Copperbelt, how do you expect such a senior government official to protect the people? He cannot and it becomes difficult for the permanent secretary to exercise partiality because he sits on the board and he is a beneficiary from some mines and personal gains are attached.
The PS in this case has both his legs in government and in the mine so he cannot act in the interest of the nation. We want to see urgent remedial measures taken to address this serious scandal," said Muma.
Muma said such an irregularity was pure corruption and his organisation would want President Michael Sata to take serious action to correct the situation.TEO questions role of mines PS on FQMO board
Labels: FIRST QUANTUM MINING, LOVEMORE MUMA, PERMANENT SECRETARIES, TAX EVASION, VICTOR MUTAMBO
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FQM layoffs are meant to blackmail govt - SARW
By Misheck Wangwe in Kitwe
Mon 24 June 2013, 14:00 CAT
THE Earth Organisation says mining houses should not threaten the government with job losses in order for them to get away from their obligations regarding the environment.
And the Southern Africa Resources Watch says the intended mass lay-off of over 500 workers by First Quantum Minerals is merely meant to blackmail the government.
Commenting on reports that FQM will lay off 500 workers at its Sentinel Mine in Kalumbila in Solwezi which is under construction, The Earth Organisation executive director Lovemore Muma said the government should not be held at ransom by the company to disregard environmental requirements for fear of job losses.
"Development should be in the context of sustainable development, meaning that current needs should not compromise future generation needs. So the government should not just look at current worker needs but also future generations, that is our children and their children's children's jobs, because if we destroy the environment now the future generation will have no jobs. If we are going to lose 500 jobs and preserve the environment and create more sustainable jobs in the future so be it. Furthermore, before FQM started constructing the dam, they should have sought expert option from Zambia Environmental Management Agency (ZEMA)," Muma said.
He said the river where the mine intends to construct the dam was a source of water for several cattle farmers and villagers both up and down stream and according to ZEMA regulations, erection of any project of such a nature required the investor to seek necessary approval regarding environmental protection.
Muma wondered why FQM started building a dam on the river before seeking approval from the agency, adding that the mining company should not threaten the government with job losses for not following the requirement as set by ZEMA.
And SARW country coordinator Edward Lange said the government should not abandon the corrective process just for the purpose of satisfying the interest of the operator.
"As civil society, we are alert and adhering to the guidance given by the government, and as such any mishandling of the process will not give any sustainable business environment for the company. It has been three years now since the indigenous and host community started crying, the company has disregarded their concerns, and now that the government has come to the aid of people, it should be a win-win situation," Lange said.
"We also appeal to Zambians not to abuse their rights to acquire mining rights by selling the same at a later stage without due consideration of the welfare and rights of the host and indigenous people. The Kalumbila case is a very clear lesson for us in Zambia and the SADC region on how local people can disfranchise themselves. Such threats are baseless and temporal as what we appeal for is the consideration of the main concerns of the host community in the area," Lange said.
FQM spokesperson John Gladston was quoted saying that the company had been forced to lay off the workers because it could not sustain the current high workforce, while waiting for the ZEMA to lift a protection order that had prevented further construction of the Chisola dam.
Labels: EDWARD LANGE, FIRST QUANTUM MINING, JOBS, LOVEMORE MUMA, SARW
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FQM records 15% rise in profits
By Gift Chanda
Wed 08 May 2013, 14:00 CAT
FIRST Quantum Minerals has recorded a 15 per cent jump in profits in the first three months of this year, mostly due to a surge in copper and gold sales.
The base metals miner, which operates the Kansanshi mine in Zambia, posted a gross profit of US $310.2 million in the first quarter this year, an increase of US$39.9 million over the same quarter last year.
"Gross profit was negatively impacted by lower realised copper and gold prices, higher royalty rates and higher depreciation. The Zambian copper royalty rate was increased from three per cent to six per cent, effective April 2012, resulting in an increase of US $17.2 million in the royalty expense in the first quarter of 2013 compared to first quarter of 2012," the company said.
Sales revenue was US $172.5-million or 24 per cent higher at US $901.2-million compared to the same quarter of 2012, the company said in a commentary accompanying the financial results ending March 31, 2013.
FQM's copper production rose 20 per cent to 79,308 tonnes in the period under review primarily due to increased throughput at its Kansanshi mine in North Western Province in Zambia.
The company said it expects copper production this year to be between 250,000 and 270,000 tonnes of copper and 126,000 and 140,000 ounces of gold.
Labels: FIRST QUANTUM MINING
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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.
Labels: BOZ, CLIVE NEWALL, FIRST QUANTUM MINING, MINING
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We've complied with govt's new tax regime - FQM
By Kabanda Chulu
Thu 14 Mar. 2013, 16:30 CAT
FIRST Quantum Minerals says its Zambian subsidiaries have complied with the government's new tax regime
without prejudice to the company's rights under the Development Agreement.
And construction of a 1.2 million tonne smelter has reached an advanced stage at Kansanshi Mines, a project that will result in the mining company becoming self sufficient in treating copper concentrates.
Meanwhile, the board of FQM that owns Kansanshi Mines has approved the second phase of the 400,000 tonne annual production capacity expansion project of the sulphide treatment plant facilities.
FQM stated in its financial and operational report for the three months and year ending December 2012, that the 2011 adjustment to mineral royalty from three per cent to six per cent was in breach of the Development Agreement it signed with the government at the time of investment in the country's mining sector.
"Government announced in 2008 a number of proposed changes to the tax regime in the country in relation to mining companies. FQM, through some of its Zambian subsidiaries, is party to Development Agreements with the government for its existing operations which provide an express right to full and fair compensation for any loss, damages or costs (including interest) incurred by FQM by reason of the government's failure to comply with the tax stability guarantees set out in the Development Agreements and rights of international arbitration in the event of any dispute," it stated.
"Following the change of government in 2011, the first Budget of the new government introduced a further increase in the copper mineral royalty tax from three to six per cent, effective April 2012, in breach of the Development Agreements. In the 2013 Budget, delivered in October 2012, the government has decreased the rate of Capital Allowances from 100 per cent per annum to 25 per cent per annum. This will impact the timing of the tax benefit from FQM's significant capital programs at Kansanshi and Sentinel. Until resolved differently with the government, FQM is recognizing and paying taxes in excess of the Development Agreement, resulting in an effective tax rate of approximately 43 per cent at Kansanshi."
According to highlights of the report, Kansanshi's concentrate was currently treated at smelters in Zambia.
"However, existing domestic smelting capacity will be insufficient to process the substantial increase in production resulting from the Kansanshi expansion and the Sentinel project hence the construction of a new copper smelter designed to process 1.2 million tonnes of concentrate to produce over 300,000 tonnes of copper metal annually," it stated.
"The smelter is also expected to produce one million tonnes of sulphuric acid as a by-product at a low cost which will benefit Kansanshi by allowing the treatment of high acid-consuming oxide ores and the leaching of some mixed ores. The additional acid is also expected to optimise the expansion of the oxide leach facilities and allow improved recoveries of leachable minerals in material now classified and treated as mixed ore."
It stated that detailed design works on the smelter were well progressed and all of the major equipment packages have been ordered.
"On site, earthworks construction is approximately 85 per cent complete and concrete pouring is 20 per cent complete. Mechanical installation commenced in January 2013. The project is scheduled for construction completion in mid-2014 followed by commissioning and ramp up," stated FQM.
Labels: DEVELOPMENT AGREEMENTS, FIRST QUANTUM MINING, TAXATION
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COMMENT - Also check the comments on the Zambian Economist blog,
"PAYE Is Not A Mining Tax".
FQM claim dismissed
August 9, 2012 | Filed under: Business | Posted by: web editor
By NANCY MWAPE
GOVERNMENT has dismissed claims by First Quantum Minerals (FQM) that Zambia has the highest fiscal regime for the mining sector globally,
challenging the company to substantiate its claims with reputable publications. Deputy Finance Minister Miles Sampa says Government is working with the Zambia Revenue Authority to ensure that there are no income leakages from the mines.
Mr Sampa was reacting to
FQM’s head of tax Adam Little who, in an interview with Daily Mail this week, stated that the tax rates applicable to the mining industry in the country are
the highest in the world.
In an interview, Mr Sampa said a holder of a mining right is exempt from customs, excise and value added tax duties in respect of all machinery and equipment required for exploration or mining activities.
“Mr Little sounded more of a politician than an expert. His claims are unsubstantiated and as an expert in tax he should be factual,” he said.
Mr Sampa said mining companies should not claim pay-as-you-earn (PAYE) as part of their taxes as this is paid by workers.
[That kind of claim by the mines is infuriating, and shows their tendency towards tax evasion. All their money comes courtesy of the Zambian people, who own the copper in the first place. It are the end users who actually pay for everything, not the mines, not anyone else. - MrK]
In a separate interview, University of Zambia, School of Mines lecturer Mattias Mphande said mining companies should open up their books for public scrutiny. Dr Mphande said Zambia’s taxes are the lowest compared to other mining countries such as Australia, Canada, Botswana and Namibia.
He said Zambian mines enjoy 10 years tax holiday, 100 percent capital allowance as an investment incentive, reduced customs duty on heavy fuel oil from 30 to 15 percent. Dr Mphande said Zambia’s tax is very low compared to Australia that has introduced a windfall tax at 40 percent.
“The mining sector’s contribution to treasury is very low in totality, they pay low electricity rates. If they import fuel, it’s duty free while Zambians pay excise duty,” he said.
Dr Mphande said the wages and salaries paid to Zambian mine workers are very low compared to the Democratic Republic of Congo and Malawi.
“PAYE is tax paid by workers and when this is removed from their tax bracket, the mines contribute very little to the treasury,” he said.
He said it is sad to note that in all places where mining activities have taken place in Zambia citing the Copperbelt and now North Western provinces, people are poorer compared to places where there are no minerals.
Labels: FIRST QUANTUM MINING, MATHIAS MPHANDE, MILES SAMPA, PAYE, WINDFALL TAX
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Zambia’s mining tax rate highest in region
TIME PUBLISHED - Monday, August 6, 2012, 9:31 am
FIRST Quantum Minerals (FQM) Limited says the tax rates applicable to the mining industry in Zambia are the highest globally. Company head of tax Adam Little in an interview in Lusaka said FQM has from 2005 to date paid over K 9 trillion (US$ 2 billion) of taxes.
Of the total taxes paid, about K390 billion (US$ 84 million) is Pay As You Earn and K1.97 trillion (US$ 234 million) mineral royalties. Mr Little said despite the high taxes and high cost environment, mining prospects in Zambia remain bright for as long as Government does not try to kill the golden goose laying the golden egg.
“When you combine high existing taxes and high cost of production, it’s a country people will think twice before investing,” he said.
He described windfall tax introduced in 2008 as the worst tax he has ever seen, adding that it was retrogressive as it was charged on revenue rather than profits.
Mr Little said had the windfall tax persisted, a number of mines would have shut down at the time copper prices were high.
“I understand why people are calling for it (windfall tax) because they see what looks like a healthy industry and they see a contribution from the industry which isn’t high enough,” he said.
He said some companies are paying lower tax than people expect due to huge investment following privatisation.
[Privatisation was over a decade ago. - MrK]
Mr Little said once a number of companies reach tax paying levels and copper prices on the international market improve, tax and mining profits are expected to improve.
He said there is need to also improve capacity and capability levels of the Zambia Revenue Authority to collect taxes from the mines.
“Government should encourage future development, I don’t think that means offering individual incentives to the mines “No sweetheart deals” but coming up with consistent and fair tax environment,” he said.
Mr Little said because of the huge investments involved in mining, it is prudent that tax rates are stabilised as was in the old development agreements.
He said to operate new mines, citing the Trident project that includes Sentinel, Enterprise and Intrepid copper projects, one has to be efficient to control costs.
“Any additional taxes will make the next generation of mines that run on slim margins of copper very hard to succeed,” he said.
[Poor mines. - MrK]
Commenting on corporate social responsibility, Mr Little said FQM has been involved in upgrading of the local general hospital, Solwezi technical institute, upgrade of the Solwezi-Chingola road, sports development in Solwezi and was the major sponsor of the African Cup of Nations.
“As much as it is important that our corporate social programmes get through to the media, the big thing for us is tax contributions. Once the mines pay tax, the money is in the hands of Government and how it spends that money is between the citizen and Government,” he said.
[Zambia Daily Mail]
Labels: DEVELOPMENT AGREEMENTS, FIRST QUANTUM MINING, TAXATION, WINDFALL TAX
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Unemployment a time bomb - sata
By Abigail Chaponda, Misheck Wangwe and Joseph Mwenda
Sun 01 July 2012, 13:25 CAT
PRESIDENT Michael Sata says
youths in Zambia will turn against the government if the high unemployment levels are not addressed immediately.And President Sata says the Zimbabwean International Trade Fair he attended in Bulawayo recently was better organised than the one he officially opened in Ndola yesterday.
Speaking before the luncheon hosted in his honour sponsored by First Quantum Minerals (FQM) at Mukuba Hotel in Ndola yesterday, President Sata said it was unfortunate that he was invited to dine with investors when a majority of Zambians were going for many days without a meal.
He said he was disheartened to see thousands of youths fighting for recruitment in the Zambia Army when the government was previously pleading with citizens to join the defence forces.
"We cannot be here enjoying this lunch while the youths are fighting for employment. We should be ashamed as Zambians because in the past, the army brass band would have to perform to encourage youths to join them," President Sata said.
He said the unemployment levels in the country were a time bomb and warned that if nothing was done about it, youths would turn against the government.
"When you see children fighting over recruitment in the army, it means they
are warning us. If we are not careful, these young people will beat us one
day with these flags we are carrying on our vehicles," President Sata said during his address to senior government officials, exhibitors and organizers of the 2012 Zambia International Trade Fair.
"When we are sitting here and eating what First Quantum is giving us, let us think of how many of our relatives have gone for three days without a meal. Yesterday I was in Chama, I saw Mr.Tom Mtine's relatives, they are as thin as a thread. They don't even know when they last ate. And here we are eating. We don't even know what to do with what is going to remain."
He said Zambia would not survive if all stakeholders, both public and private, fail to join hands to end the high levels of unemployment among young people.
"At every point we have young people trying to remind us leaders why we are
lying idle. The purpose of the Trade Fair is to come and watch your innovations on how you are creating employment," he said.
President Sata said it was sad that in Zambia today the Zambia Army, Zambia Police, Zambia Air Force and the Zambia National Service were being accused of corruptly recruiting fewer youths when defence wings did not have the capacity to recruit annually.
He challenged ministers and other senior government officials who were present to find ways of creating employment in their respective sectors.
"All industries are closed, what are we doing honourable ministers? Let us
work hard to revamp the industries," he said.
He asked the ministry of commerce to reopen Dunlop in Ndola and Mulungushi Textiles in Kabwe.
And President Sata commended the Bank of Zambia over the Statutory
Instrument banning the pricing, quoting and general transaction in foreign
currency, saying it was the only way of giving the kwacha its own identity.
"When you go to Britain, the legal tender is pound, when you go to America, it's dollar and in Zambia when we say we want kwacha, you have the so called politician saying they can't be tourist, let them be," he said.
President Sata said some of the critics of the Statutory Instrument were tourism operators and did not want to pay loyalties to the government.
Meanwhile, police officers almost caused chaos during the President's tour
of exhibitors' stands at the Trade Fair.
Close to a thousand police officers have been deployed to maintain order at
the event, but the exaggerated security detail blocked journalists from covering the tour of stands yesterday.
The heavily armed officers at one instance manhandled Post Photojournalist Joseph Mwenda for getting pictures of the Head of State using a flash.
Mwenda was hurled out of the Ministry of Agriculture exhibition hall by one of the senior police officers who told him that he had taken enough pictures of the President.
President Sata's press aide George Chellah, however, intervened and wondered why the police officers were harassing journalists who were merely doing their job.
Labels: DOLLARISATION, FIRST QUANTUM MINING, MICHAEL SATA, UNEMPLOYMENT, ZIMBABWE INTERNATIONAL TRADE FAIR
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First Quantum Minerals chairman Philip Pascall praises Sata after government approves construction of new mine
TIME PUBLISHED - Sunday, May 13, 2012, 8:36 am
FIRST Quantum Minerals (FQM) chairman Philip Pascall has praised President Michael Sata for demonstrating strong commitment to boosting investor confidence in the Zambian economy.
Mr Pascall, who is also FQM chief executive officer, said the decision to proceed with Sentinel Copper Mine “strongly” validated Mr Sata’s pledge to see greater investment that was mutually beneficial to investors and Zambians.
The acknowledgement comes barely days after FQM announced a go-ahead for full construction of the company’s K8.8 trillion (US$1.7 billion) Sentinel Mine, the first of the three potential mines at the Trident project in North-Western Province.
The decision followed confirmation from Zambia’s State-owned electricity company, Zesco, for the connection and supply of power to the mine.
“We greatly appreciate the efforts of Honourable Christopher Yaluma, Minister of Mines, Energy and Water Development for his leadership and tireless efforts in guiding the project to this stage.
“We also wish to thank Cyprian Chitundu, managing director of Zesco and Andrew Chipwende, CEO of the Zambia Development Agency and their teams for their valuable and constructive input,” Mr Pascall said.
He reiterated that Sentinel would be a major catalyst for the diversified growth of the Zambian economy, and would significantly augment the benefits and opportunities for Zambians.
[Times of Zambia]
Labels: FIRST QUANTUM MINING, MICHAEL SATA, MINING
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Unions take Kansanshi, FQM to Industrial Relations Court
By Misheck Wangwe in Kitwe
Sun 18 Mar. 2012, 11:57 CAT
THE Mineworkers Union of Zambia and the National Union of Miners and Allied Workers have taken the failed 2012 salary negotiations with Kansanshi Mine and First Quantum Minerals Operation Limited to the Industrial Relations Court.
And the unions say President Michael Sata must do everything possible within his powers to resolve the impasse between workers and managements of Kansanshi and FQMOL which would negatively result in the mineworkers not receiving their deserved and agreed items, including salaries.
The MUZ and NUMAW a fortnight ago reached a deadlock with managements of both Kansanshi and FQMO over the 2012 negotiations for a pay rise.
At a joint press briefing in Kitwe on Friday, MUZ acting president Charles Mukuka said in terms of the provisions of the industrial and labour relations Act on the settlement of collective dispute, the parties to the dispute took the inevitable action of taking the process to another level.
"The matter is now proceeding to the Industrial Relations Court for adjudication, now that the mediation process still leaves the parties to the dispute apart. We would like to appeal for calm and commitment to duty, now that the process has entered an untouched territory in terms of our recent history in industrial relations," Mukuka said.
He said in a memorandum of understanding signed, Kansanshi Mine management, among other things, conceded to consider permanent employment and to work towards working out modalities of implementing the decision.
Mukuka said in subsequent joint industrial council meetings, management had informed the unions that the board met and could not make a decision on permanent and pensionable employment and proposed to defer the issue and effectively meant it falling off the 2012 collective agreement.
He said in the case of FQMO, there were disagreements on the tenure of the collective agreement from one to two years, adding that the parties in their rounds of negotiations made progress on a number of items, except on salaries.
"We would like to remind our members and the nation that in 2008, the Unions, MUZ and NUMAW, reached a similar impasse. The actions of management then was to entice our members with money to withdraw from the two unions.
That episode was painful to the unions and the members," he said.
Mukuka said it was distressing that managements at Kansanshi and FQMO had refused to accept the amicable way of resolving the impasse and subsequently implement the items in the 2012 collective agreement.
And Mukuka said President Sata and his government must take action and help the unions to get a better deal through collective agreements.
He said the Minister of Labour, Fackson Shamenda, was empowered in the industrial and labour relations Act to intervene even at the last and inevitable hour of the matter.
Mukuka said Kansanshi and FQMO were key drivers in the mining industry and "the unfortunate developments of deadlocks and misunderstandings should not be allowed to derail the country's march to mining growth and expansion…"
Labels: FIRST QUANTUM MINING, KANSANSHI MINING PLC, MICHAEL SATA, SALARIES
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FIRST Quantum Minerals and others face closure over exploration licencing
TIME PUBLISHED - Sunday, March 18, 2012, 11:44 am
FIRST Quantum Minerals (FQM) Zambia Limited, Equinox Zambia Limited and ZCCM-IH are among over 400 mining companies facing closure for defaulting on meeting statutory obligations as required by law.
The Ministry of Mines and Natural Resources has since warned the defaulting companies that they risk having their mineral processing or exploration licences cancelled if they do not remedy the defaults within 60 days starting from Friday, March 16, 2012.
This is according to a default notice issued by Geological Survey Department director Chipilauka Mukofu to the erring companies.
“In accordance with provisions of section 102 of the Mines and Minerals Development Act number 7 of 2008, the director of Geological Survey hereby gives default notices to the under-listed holders of prospecting licences and mineral processing licences with the following defaults:
“Non-payment of area charges on the anniversary of grant, contrary to section 143 of the Mines and Minerals Development Act, failure to commence and carry outprospecting operations contrary to section 19 of the Mines and Minerals Development Act, and failure to submit quarterly and annual exploration reports, contrary to provisions of the Act,” the notice reads in part.
Further defaults are submission of sub-standard or false reports that do not represent exploration progress, failure to submit a decision letter in respect of an environmental project brief and failure to keep full and accurate exploration or mining processing records.
“As provided under section 102, all defaulting holders are hereby given a period of 60 days, effective from the date of publication of this notice, to remedy the defaults cited above, failure to which theprospecting licence or mineral exploration licence shall be cancelled,” the notice adds.
Other notables on the list include Ndola Lime Company Limited, TEAL Development Zambia Limited, BHP Billiton World Exploration Incorporation Zambia Limited, Zhonghui Mining Industry Limited and Euro Africa Kalengwa Mines Limited.
Others are Jiaxing Mining Zambia Limited, Central Africa Mining Limited, Mwembeshi Resources Limited, Sino-Kasempa, Zhonglian Mining Group Corporation Limited and China Mining Group Corporation.
Some of the individuals on the list are Jason Mfula and Jazzman Chikwakwa.
But FQM says it is fully compliant with all statutory requirements.
The company says the Kipushi mining prospecting licence cited for has been in dispute for three years.
“The dispute has put First Quantum Minerals in a position in which it cannot do anything until the matter is resolved,” a company spokesperson said in response to a Sunday Mail query.
And Ndola Lime Company Limited says it will have to check the prospecting licences being referred to by the ministry.
Company general manager Abraham Witika said the company holds a mining licence.
“We have to check the prospecting licences being referred to because we are in mining industry, with a mining licence,” he said.
He was speaking in an interview in Ndola yesterday. Ndola Lime Company produces limestone, quicklime and hydrated lime.
[Zambia Daily Mail]
Labels: FIRST QUANTUM MINING, LICENSES
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Kansanshi mine strike is illegal says FQM
TIME PUBLISHED - Wednesday, January 4, 2012, 2:32 pm
First Quantum Minerals says the strike action by miners at its Kansanshi mine in Solwezi is illegal.
Workers at the Kansanshi mine, Zambia’s largest copper mine which produced 231,000 tonnes of the red metal in 2010, downed tools on Tuesday demanding 100 percent pay rises and bringing production to a halt.
Company spokesperson Godfrey Msiska says there was no deadlock reached and as far as the management is concerned the strike is illegal.
He confirmed that the strike action by the workers has entered the second day today, with workers blocking the gate to the mine plant.
Mr Msiska has appealed to union officials to convince the workers to go back to work so that negotiations, which had been suspended because of the strike, could resume.
[Reuters]
Labels: FIRST QUANTUM MINING, GODFREY MSISKA, KANSANSHI MINING PLC, MINING, STRIKE
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COMMENT - If FQM rehabilitated Chingola-Solwezi road, and it's trucks use that same road, it is just a business expense. Also, does this 'K8 billion' include the taxes that their workers pay on their incomes (PAYE)? If so, those are not taxes paid by FQM, any more than taxes paid by copper buyers are paid by FQM or anyone else.
Kansanshi pays about K8bn in taxes daily - Gen Chinkuli
By Bright Mukwasa
Wed 28 Dec. 2011, 13:20 CAT
KANSANSHI Mine pays about K8 billion in various taxes to the Treasury on a daily basis, says First Quantum Minerals country manager General Kingsley Chinkuli. And First Quantum Minerals has spent about K23 billion for the rehabilitation of the Chingola-Solwezi road.
Speaking when he, together with Kansanshi Mine public relations manager Godfrey Msiska, toured The Post Newspapers offices in Lusaka on Friday, Gen Chinkuli said his company had to date paid up to K8 trillion in various taxes to the government since attaining a taxpaying position over five years ago.
"The projections were that we will make profits after five years, but we did that in 18 months and immediately started paying taxes. We have so far paid US$1.6 billion (about K8 trillion) to date," Gen Chinkuli said.
He said the company had an ambitious expansion drive that could see many young people given a chance to be employed in the next few years.
"First Quantum is a homegrown company and its operation has made a significant contribution to the people of Solwezi. We have a workforce of approximately 1,300, plus the sub-contractors," Gen Chinkuli said.
He also observed that the view that mining companies were not contributing much to the communities they operated in was a debate that could be allowed for people to suggest which areas the companies could contribute development to.
General Chinkuli also said he was hopeful that relevant authorities would work to develop infrastructure in Solwezi that could accommodate the pressure that has been brought as a result of expanding industrial base in the province and Solwezi in particular.
And Kansanshi Mine has set aside about K35 billion for the upgrading of the Solwezi Airport to international standards.
Kansanshi Mine public relations manager Godfrey Msiska said the company was currently involved in community development projects such as the training of youth in various skills.
"We have plans to turn Solwezi airport into an international airport. We're currently upgrading the runway to a level where it can handle a Boeing 737 and for that project we have budgeted K35 billion for the upgrade of the runway," Msiska said. "Of course we expect government and other stakeholders to come in."
He said the mine had also invested in the upgrade of Solwezi General Hospital, a project that would cost K11 billion.
"We have projected to spend about K30 billion on health, social welfare and infrastructure development like the maintenance of Chingola-Solwezi road. We have spent K23 billion on maintaining this road. For instance the Kibombenene area, the road was totally eaten up, but we have put a bridge and culverts," said Msiska.
Kansanshi mine, the largest copper mine in Africa, is 80 per cent owned by Kansanshi Mining PLC, a First Quantum subsidiary while the remaining 20 per cent is owned by a subsidiary of ZCCM. First Quantum bought Kansanshi Mine from Phelps Dodge in 2001. It started production in 2005, and soon afterwards made profits and begun paying taxes to the government. To date, Kansanshi is the only company that pays dividends to the government for the 20 per cent shareholding held via ZCCM-IH.
Labels: FIRST QUANTUM MINING, KANSANSHI MINING PLC, TAXATION
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FQM, Zambia’s largest copper producer, happy with President Sata’s drive
TIME PUBLISHED - Thursday, October 13, 2011, 5:01 pm
First Quantum Minerals Ltd. Chairman and CEO Philip PascallFirst Quantum Minerals Limited is happy with President Michael Sata’s drive to boost foreign investment in Zambia.
First Quantum Minerals Chief Executive Officer Philip Pascal says President Sata’s willingness to engage with foreign investors to strike a balance for benefits of both investors and Zambians is welcome.
Mr Pascal says the president’s stance is key in maintaining and enhancing investor confidence in the country.
Mr Pascal who met with President Sata at State House in Lusaka says the discussions with the fifth Republican President of Zambia, who marked his 20th day in office on Wednesday, were cordial and positive.
He says it is clear that President Sata wants to see increased investment that gives both investors and Zambians mutual benefits.
This is according to a statement released to ZNBC News by the mining firm.
First Quantum is Zambia’s largest copper producer, and is the single largest contributor to the national treasury.
In his inaugural speech, President Sata emphasised that foreign investment is important to Zambia as it does not only create jobs but equally contributes to the economic empowerment of Zambians.
The President also highlighted that the Patriotic Front (PF)-led government will continue to work in fair partnerships with investors already in the country and welcome new ones.
Labels: FIRST QUANTUM MINING, MICHAEL SATA
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‘Trident Mine project launch disappointing’
By Kombe Chimpinde
Thu 18 Aug. 2011, 13:59 CAT
BDAVIS Kapijimpanga says he is disappointed with President Rupiah Banda’s move to launch Trident Mine without due consent of the people in the area and approval of the Zambia Environmental Management Agency (ZEMA).
In an interview, Kapiji-mpanga who hails from the Kapijimpanga Royal Establishment of North Western Province, said that he was disappointed with President Banda’s governments’ decision to go ahead and sanction the multi-billion dollar mining project owned by First Quantum Minerals, a company once rejected by the Democratic Republic of Congo government for evading tax, without concluding talks with the relevant stakeholders.
Labels: CHIEF KAPIJIMPANGA, FIRST QUANTUM MINING, TAX EVASION
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First Quantum Mineral lists today on LuSE
TIME PUBLISHED - Wednesday, July 20, 2011, 5:18 am
FIRST Quantum Minerals’ Zambian Depositary Receipts (ZDRs) are expected to be listed and admitted to trading on the Lusaka Stock Exchange (LuSE) today, the mining company has said. The company says the ZDRs will trade on the LuSE under the symbol FQMZ (ISIN ZM0000000375), according to a statement issued by the company and availed to the Mail yesterday.
“Further to prior announcements, Renaissance Capital and First Quantum Minerals (FQM) Limited are pleased to confirm that following closure of the offer period, First Quantum’s Zambian Depositary Receipts will be listed and admitted to trading on the Lusaka Stock Exchange from 09:00 on Wednesday July 20, 2011.”
“Each ZDR will represent interests in First Quantum’s underlying Common Shares (TSX: FM). An allotment announcement with full details of the listing will be published prior to listing,” the company said.
LuSE chief executive officer Beatrice Nkanza hailed First Quantum for becoming the first mining company to issue shares on the local stock exchange, adding that the listing avails Zambians the opportunity to invest directly in the company.
“The capital market is very excited about this development and establishes the LuSE as a prime listing destination for multinational mining companies operating in the region,” she said.
Commenting on the listing, Pangaea Renaissance Securities Limited chief executive officer Ceaser Siwale said, “The First Quantum listing has been very well received by Zambian investors, and we at Renaissance Capital are delighted to have worked with First Quantum to bring this landmark transaction to the Zambian market.”
Renaissance Securities are the book runners for FQM.
FQM resident director Kwalela Lamaswala said the listing is in recognition that Zambians are important stakeholders of First Quantum and creates another way for Zambians to identify with and participate in the growth of the company.
And THERE was impressive activity on the Lusaka Stock Exchange (LuSE) last week with turnover sky-rocketing to a massive K25 billion from the previous week’s K8.7 billion.
According to LuSE Weekly News for July 15, 2011, a total of 9, 558,050 were transacted in 182 trades, yielding a total turnover of K25 billion.
This is compared to 2,747,950 shares that were transacted in 64 trades yielding over K8.7 billion.
LuSE attributed the highest volume to trades in Shoprite shares amounting to 4,248,189 shares worth K17 billion.
Overall trading activity occurred in 15 listed stocks namely; BP Zambia, Cavmont Chartered Holding Zambia, Copperbelt Energy Corporation, Lafarge Cement Zambia, Farmers House, Investrust, Standard Chartered Bank Zambia, Zambeef Products and Zamefa.
Trading activity also occurred in Zambian Breweries, Zanaco Bank, Zambia Sugar, African Explosives Limited Zambia and BATA Shoe Company.
LuSE indicates that the all-share index closed at 3,931.47 points down by negative 1.45 percent from 3,989.43 points over the previous week ending July 8, 2011.
On year-to-date in Kwacha terms, the index which measures performance of stocks on the stock market rose by 18.99 percent. The stock exchange also recorded 2,450,139 rights worth K247,014 in Investrust letters of allotment.
Labels: CEASER SIWALE, FIRST QUANTUM MINING, LUSE, PANGAEA RENAISSANCE SECURITIES
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COMMENT - This article came to my attention, courtesy of
Cho's Zambian Economist blog. Glencore is a company led by a convicted criminal, Marc Rich. Convicted of tax evasion, and pardoned by former president Bill Clinton.
UPDATE 1-EIB halts Glencore lending on governance concerns
By Clara Ferreira-Marques and Philip Blenkinsop
Wed Jun 1, 2011 11:33am GMT
LONDON/BRUSSELS, June 1 (Reuters) - The European Investment Bank has frozen all new loans to commodities trader Glencore and its subsidiaries, it said in a statement, citing "serious concerns" over the group's corporate governance.
The EIB, the European Union's lending institution, provided a $50 million loan to Mopani Copper Mines, a Zambian subsidiary of Swiss-based Glencore, in 2005, to help pay for the modernisation of a copper smelter.
But Mopani has since been accused by some non-governmental organisations (NGOs) -- most recently by campaign groups in an open letter signed by a group of European parliamentarians -- of tax evasion and of causing widespread pollution.
Glencore has denied the allegations, the bulk of which stem from a leaked version of a pilot audit report commissioned by the Zambian tax authorities. The EIB, in a statement issued to answer comments from NGOs, said it has commissioned its own independent probe into the matter.
Any conclusive proof of tax evasion would lead to local penalties and could trigger early repayment of the loan, the EIB said, adding it would, if necessary, improve its own due diligence audit mechanisms.
"We welcome the EIB taking a close look at Mopani, since we are confident that we will be completely exonerated," a spokesman for Glencore said on Wednesday.
"The allegations are based on an incomplete, draft desktop study that was circulated in Zambia several months ago. We publicly refuted the draft conclusions of this document at the time," he said.
Mopani itself has also placed advertisements in local Zambian newspapers to reject claims made in the draft audit on sales volumes, manipulated copper prices and improperly recorded hedges, saying the conclusions were based on "errors and inconsistencies" and were a "calculated move to tarnish the image and integrity of Mopani".
MORE THAN MOPANI
But the EIB said in its statement its concerns went "far beyond" Mopani, repeating comments made in a letter to a group of parliamentarians who last week called for EU financing for mining projects in Africa to be suspended.
"Due to serious concerns about Glencore's governance, which has been brought to light recently and which go far beyond the Mopani investment, the president of the EIB has instructed the services to decline any further financing request from this company or one of its subsdiaries," it said.
EIB invests in mining projects throughout Africa and beyond as part of EU development cooperation policy.
Other projects with EIB involvmement include the Ambatovy nickel project in Madagascar and the Tenke Fungurume mining project in the Democratic Republic of Congo.
The group of more than 50 members of the European Parliament called last week for a moratorium on EU public financing for mining projects until "adequate standards and regulations" are brought in.
They questioned the environmental impact of the EU investment in Mopani, arguing the EIB was ill-equipped to monitor mining projcts and to deal with related risks.
Mopani, in which Canada's First Quantum and the Zambian state own minority stakes, has generated over $380 million in tax payments to the Zambian government since its privatisation in 2000, through royalties, import/customs duties and income taxes.
Glencore, the world's largest diversified commodities trader, listed on the London stock exchange in May.
Its shares were trading at 523 pence, down 1.5 percent, at 1050 GMT, underperforming a 0.9 percent rise in the broader sector and still below their 530 pence debut price.
(Editing by Greg Mahlich)
Labels: CORRUPTION, EIB, FIRST QUANTUM MINING, GLENCORE INTERNATIONAL AG, MOPANI, TAX EVASION, WINDFALL TAX
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COMMENT - The MMD is clearly mismanaging the mining sector and the economy. These deals have to be turned back. It is completely unacceptable that in a country with 40% malnutrition, the government can just get rid of the windfall tax, and be this uninterested in benefiting from the mining industry. Of course they personally benefit from taking bribes to do just that, which is why their excuses make no sense.
Zambia will get K800bn from sale of Equinox, says Simuusa
By Chiwoyu Sinyangwe
Wed 04 May 2011, 16:30 CAT
ZAMBIA will get US$171 million (over K800 billion) from the imminent US$7.68 billion sale of Equinox Minerals, the parent company for Lumwana Mining Company, reveals Wylbur Simuusa. And Simuusa says President Rupiah Banda was celebrating deprivation of Zambians by ground-breaking a large-scale Trident mine wholly-owned by foreigners.
Simuusa, who is Patriotic Front chairman for mines, said
Zambia’s low stake in Lumwana Mining Company would result in the country getting a paltry amount from the country’s record transaction in the mining sector. Barrick Gold agreed to buy Equinox Minerals, whose Lumwana Mining Company, built for over US$1 billion in Solwezi is Equinox Mineral’s primary asset while other operations include a copper development project in Saudi Arabia.
“Hon Maxwell Mwale mines minister should explain what’s going to be the future of ZCCM-IH’s stake in the new company after Barrick Gold takes over Lumwana Equinox Minerals,” said Simuusa, who is also Nchanga Constituency member of parliament. “Because as things stand now, we are only going to receive about US $171 million from this deal but our shareholding might be diluted. So, let Mwale explain.”
Both finance minister Dr Situmbeko Musokotwane and Mwale could not be reached by press time as their mobile phones went unanswered. Simuusa also regretted that the government position on the transaction of the Lumwana magnitude remained unclear despite the country hosting the mines.
And Simuusa says President Banda was worsening the poverty levels in the country by creating an environment that exclusively favoured growth of the foreign capital. Simuusa regretted that President Banda went to celebrate the opening of the new mine with little benefits for the country.
During the official opening of the over US$1 billion First Quantum Minerals Trident mining in North Western Province, a project to be heralded by Kalumbila Mines in Solwezi, President Banda said it was gratifying that the mining sector had become viable again and contributing significantly to the economic growth of the country. President Banda hailed the Trident project as a boost to economic and social wellbeing of people in Solwezi and the country as a whole.
But Simuusa said President Banda was depriving the Zambian people of their birthright by abrogating the Zambian laws on mining which stipulated that Zambia, through ZCCM-IH needed to retain 35 per cent stake in new mining projects. “What was the President groundbreaking and celebrating about when we don’t have a single share in Trident,” said Simuusa.
“In the absence of the windfall tax, and the in view of the projected high copper prices, the future is that we should start increasing our stake in these mines, especially new ones and in that way, we will be benefiting from higher copper prices in the future, that’s more pertinent. But there you have the President celebrating where we are losing out. And since the shareholding is not being handled properly, the foreigners in the end will get everything while we will be left yawning and quarrelling among ourselves. So, the celebration by the President doesn’t make sense.”
Labels: EQUINOX, FIRST QUANTUM MINING, MAXWELL MWALE, PF, SITUMBEKO MUSOKOTWANE, WYLBUR SIMUUSA, ZCCM-IH
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Rupiah happy with mining sector
By Misheck Wangwe in Solwezi
Fri 29 Apr. 2011, 19:10 CAT
PRESIDENT Rupiah Banda says it is gratifying that the mining sector has become viable again and contributing significantly to the economic growth of the country.
Speaking on arrival at Solwezi Airport where he went to officially open First Quantum Minerals multi million dollar, Kalumbila Mine, President Banda
hailed the project as a boost to economic and social wellbeing of people in North Western Province and the country as a whole.
“We are happy about this project because our people will benefit greatly.
It will create about 2000 jobs for locals; schools and roads will be constructed because of these mining activities. We want our people to live well, to come out of poverty to live well together with their families, hence the investment,” President Banda said.
He said it was gratifying the copper projections and output have continued to rise in the mining sector thereby creating employment for the people particularly young men and women who needed jobs. He said the significant growth the mining and agriculture sectors were recording should inspire all well-meaning Zambians to join the process of development.
President Banda said his government had demonstrated real commitment to the fight against poverty and underdevelopment by constructing schools, hospitals and other important infrastructure for the rural population.
Kalumbila Mine, through its business units, has since employed 596 workers and it would attract more than 2,000 jobs. Full scale operations were expected to begin by the year 2014. The mine is located in Chief Musele's area.
Labels: FIRST QUANTUM MINING, MINING, RUPIAH BANDA
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