Govt to start trust funds in mining communities
By Kabanda Chulu
Monday July 14, 2008 [04:00]
DEPUTY mines minister Maxwell Mwale has said the government will soon establish trust funds that will make mining companies contribute funds towards the sustainability of local communities. And the ministry of mines has granted a grace period of one year for the implementation of the new mines and minerals development Act that came into effect on 1 April 2008 in order to allow stakeholders to comply with new requirements. Mwale said the trust funds would be controlled and managed by the communities themselves.
"We are in the process of establishing community trust funds where mining companies will contribute towards the sustainability of the communities in which the mines operate from and these trust funds will be administered by the communities themselves," he said.
Mwale also said the government was currently improving laboratory facilities at the Mines Safety Department (MSD) in order to enhance efficiency and higher standards.
And director of mines in the Ministry of Mines Gerhad Kangamba stated that the new Act became law on April 1, 2008 but the government granted a transition period of one year from April 2008 to March 2009.
"During the transition period all holders of mining rights and non-mining rights and firms operating mineral analysis, geological or mining consultancies are expected to fully comply with the requirements of the new law," Kangamba stated. "And all holders of renewed licences that do not conform to the Act should resubmit fresh applications to comply with the new law by 1 April, 2009."
Amongst other provisions, the new Act would require that all holders of gemstone licences, mining licences and mineral processing licences obtain annual operating permits from the MSD, meaning that an entity could not operate even if it has a mining licence.
Also all mining rights for industrial minerals shall only be granted to citizens of Zambia and citizen-owned companies.
Other requirements would be that all small scale mining licences, including gemstone and prospecting permits shall only be granted to Zambian citizens and citizen-owned companies.
It is expected that all mining and non-mining rights granted under the repealed Act of 1995 shall cease to be valid by April 2009.
Labels: FUNDING, MINING
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Mumbwa copper mining activities worry DC
By Chiwoyu Sinyangwe in Mumbwa
Monday July 07, 2008 [04:00]
THE only legacy that increased copper mining activities will leave in Mumbwa is pits and holes because local people are not benefiting, district commissioner Dowell Chilimboyi has complained. And Chilimboyi has urged Mumbwa residents to utilise the increasing economic opportunities in the district to uplift their standards of living so that they shrug off the tag of ‘Mumbwa-Mumbwa’.
‘Mumbwa-Mumbwa’ is a phrase that is mockingly used by most Zambians in reference to the perceived economic retardation of Mumbwa residents. In an interview, Chilimboyi urged the ministry of mines to ensure that mining companies going to the district paid some levies and taxes to the local authority. Mumbwa has in recent times reported increased mining as well as prospecting activities.
“What is happening now is that most of these mining activities, once they get their licences from the ministry of mines, that is all.
When they come on the ground, they are taking quite a big chunk of these minerals without giving anything to the district or even paying levies to the district council or even the chiefs’ palaces where they are doing their mining activities,” Chilimboyi said.
“Some of them are small and large scale miners who, after two to three years of mining, they go away and all we are just remaining with are open pits. meanwhile, our roads are being damaged by heavy trucks that are carrying the copper ore…this is despite some maintenance that is going on. So we are still battling to find a way the district can benefit from this.”
And Chilimboyi said plans to electrify chief Kaindu’s palace up to Kaindu Basic School and to link it to a very big health centre has reached an advanced stage.
“We are the people who should take advantage of the availability of some of these economic projects that are coming in Mumbwa. This is an opportunity to revamp the agriculture and other economic activities.
The time for ‘Mumbwa-Mumbwa’ is gone…local farmers are getting richer while the government is also improving infrastructure like roads in the district,” said Chilimboyi.
Labels: MINING, NEOLIBERALISM
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Outrage over £200m UK investment in Zimbabwe
Anglo American, the London-based mining giant, is to make what is believed to be the largest foreign investment in Zimbabwe to date, just as the British Government puts pressure on companies to withdraw from the country.
Anglo will invest $400 million (£200 million) to build a platinum mine in Zimbabwe — a move that has raised concern among some of the company’s shareholders and been condemned by politicians.
The Foreign Office was investigating tonight whether the company’s investment breached sanctions against Zimbabwe. Anglo insisted that its involvement in the country did not break the law.
The decision, which was criticised roundly as likely to give succour — and possibly money — to the Mugabe regime, is in stark contrast to the policy of nearly all other main British corporations in Zimbabwe. They are either withdrawing from the country or waiting for Mr Mugabe to be deposed before expanding their businesses.
Lord Malloch-Brown, the Foreign Office Minister, said this week that Britain could push for tougher sanctions against Zimbabwe and put pressure on companies doing business there to withdraw. The Government will also call a halt today to next year’s tour of England by the Zimbabwean cricket team.
International condemnation of President Mugabe and his regime intensified today when the UN Security Council issued a statement condemning the “campaign of violence against the political opposition ahead of the second round of presidential elections”.
Despite the political concern about President Mugabe’s regime, Anglo American is pressing ahead with its plans to build a mine at Unki, in central Zimbabwe. The company employs 188 people and a further 450 contractors at Unki and hopes to be producing platinum, one of the world’s most expensive metals, by 2010. A spokesman for Anglo said: “We are developing the Unki platinum project because we have responsibility to our employees, contractors and the local community. We are keeping the situation in Zimbabwe under close watch.”
Zimbabwe is rich in mineral resources and has the second-largest deposits of platinum but most large miners are avoiding the country or have put their investments on hold. Rio Tinto, the world’s second-largest miner, has a small diamond mine in the country but said yesterday that it would not invest further until President Mugabe was gone.
British American Tobacco, which makes Benson & Hedges cigarettes, and Barclays Bank also have operations in Zimbabwe. Both companies said that they would remain for the good of their local employees but neither would expand there. BP and Shell jointly own a chain of petrol stations in Zimbabwe and tonight said that they were reviewing their presence in the country. The advertising agency WPP is selling its 25 per cent stake in a Zimbabwean media company part-owned by one of Mr Mugabe's relatives. The agency is understood to be desperate to offload the stake and willing to sell at any price.
Almost no large investments have been made in Zimbabwe for years over uncertainty about the Mugabe regime. Anti-Mugabe campaigners said that the Anglo investment was likely to be the largest ever in the country.
Some of Anglo’s shareholders said that they would raise the investment with the company amid concern that it may breach pension fund ethical guidelines. Legal & General is Anglo’s largest single shareholder with about 5 per cent of the company. A spokesman said: “We have a corporate and social responsibility policy and that overrides all investment activity. We do engage with companies to ensure they act in an appropriate fashion.”
The mine plan provoked a chorus of condemnation. Roy Bennett, treasurer of Zimbabwe’s opposition MDC party, said: “Any company doing business in Zimbabwe is keeping that regime alive. Anglo American is complicit with the regime as whatever they are doing in Zimbabwe has the endorsement of the regime. The money they invest is a lifeline to the politicians and government of Zanu (PF).”
Ed Davey, the Liberal Democrat foreign affairs spokesman, said: “Such an investment could only bolster this discredited evil regime and shows how pathetic the current sanctions regime is. It must now be time for the UN and EU to get serious about sanctions. If Anglo American go ahead with this, it will be the worst mistake in their history and the biggest PR disaster imaginable.”
Peter Luff, Conservative chairman of the Business and Regulatory Reform Select Committee, said: “This is a curiously bad investment. Robert Mugabe may interpret this move as a vote of confidence in himself. How can a company possibly satisfy itself that this investment will be seen truly ethical in its nature at this moment.
Zimbabwe will change and those who will be seen to have supported the old regime may in the long term pay a heavy price for that decision.”
Kate Hoey, chairwoman of the all-party Zimbabwe group, said: “Clearly this is not a time for any British company to be investing in Zimbabwe.”
William Hague, the Shadow Foreign Secretary, said: “Companies investing in Mugabe’s Zimbabwe . . . should examine their consciences very carefully. No British or international company should in any way help to prop up the regime, whether by an investment in Mugabe’s Zimbabwe or by any kind of dealings with it.”
Peter Hain, the former Work and Pensions Secretary, urged the company to put the investment on hold. “It’s unacceptable to be handing this to Mugabe on a plate at a time that mini-genocides are happening across the country.”
Earlier Mr Davey said in the Commons that British companies were operating through subsidiaries in Zimbabwe. He asked what ministers were doing to end the “scandalous situation where a British bank, namely Barclays, still bankrolls Mugabe’s thugs by operating through a local subsidiary, thereby bypassing EU sanctions”. This was, he said, an insidious loophole that flouted the spirit, if not the letter, of the sanctions against the Zanu (PF) hierarchy.
Barclays said that it complied with all European Union sanctions.
David Miliband, the Foreign Secretary, said: “I condemn anything that gives succour, either financial or moral, to the Zanu (PF) leaders.” He was not aware, however, of any British company breaking sanctions and added that companies operating in the country could offer employment and support for ordinary Zimbabweans as well as succour for the regime.
Andy Burnham, the Culture Secretary, is to write to the England and Wales Cricket Board (ECB) stating that the Government will not allow the Zimbabwean team into the country. This means the tour is off and the ECB will not face compensation claims from the International Cricket Conference (ICC) for pulling out. Mr Burnham will also urge the ECB to begin moves to exclude Zimbabwe from next year’s Twenty20 World Cup in England.
African mineral riches
— Anglo American was founded by Sir Ernest Oppenheimer in South Africa in 1917. Oppenheimer had already taken over De Beers, the diamond corporation, from Cecil Rhodes, who founded the country that became Zimbabwe
— Anglo still owns 45 per cent of De Beers and is the fourth-largest mining company in the world
— The company’s headquarters are just off Pall Mall, Central London and is listed on the FTSE 100. It employs 162,000 people worldwide
— It is being sued over working conditions in South Africa during the apartheid era. Miners claim that they were treated as slave labour, The company denies wrongdoing
Source: Times database
Labels: ANGLO-AMERICAN, MINING, ZIMBABWE
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Global mining companies on acquisition trail
By Joan Chirwa
Saturday June 21, 2008 [04:00]
CHIEF executives of global mining companies are on the acquisition trail as they believe mining companies are still being undervalued by a market that has not fully grasped the story of China and other fast-developing countries. According to PricewaterhouseCoopers (PWC), a new generation of mining CEOs believes demand for metals will outstrip supply by far in the near future as they have learnt that bringing on new supply is difficult and costly.
A review of global trends in the mining industry conducted by PWC indicates that the CEOs of mining giants believe the market and analysts still do not fully comprehend the story of China and other fast developing countries that will lead to the increase in demand to occur over the next decade.
Mineweb reports that Hugh Cameron, African Mining leader at PWC, notes that the high level of cash generated at the top of the industry, implied that large companies did have the cash to make acquisitions.
"The CEOs believe that analysts haven't understood the China and India story and that the future prices they are using in their models are out of date," said Cameron. "The subprime crisis has also carried a silver lining for big miners as it has led to lower stock prices, while it would now also be more difficult to finance projects owned by juniors."
Interestingly, companies based in emerging markets are expanding globally and mining CEOs recognise the top end of the industry is not the domain of Western companies any longer.
Labels: MINING
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Mining boom cheers UNZA geology lecturer
By Mwila Chansa
Monday June 16, 2008 [04:00]
THE current boom in mining activities will turn the tables in as far as the shortage of geologists in the country is concerned, a University of Zambia (UNZA) lecturer has said. In an interview, School of Mines assistant dean Professor Imasiku Nyambe said Zambian geologists were not enough due to the slump in mining activities that the country experienced in the past years. He said the slump saw very few Zambians studying geology or any geo-science such as mining engineering or metallurgy and mineral processing.
“So we saw a decline in enrolment at the University of Zambia in particular in the geology department such that over the past four years or so, we have been graduating around two geologists,” Prof Nyambe said. “If you graduate two but the numbers that are needed in the industry are over fifteen, then there is definitely that shortage and as a result to fill up that gap, people or companies have to employ geologists from outside the country.”
And Prof Nyambe said the enrolment pattern in the School of Mines was that geology always had the least number of students.
However, he said things had begun to change as a result of the huge investments in the mining industry as well as the high metal prices on the world market.
He said the department had this year enrolled 26 students against last year’s 24 and that things were improving.
Prof Nyambe said the department still faced the challenge of attracting females to enrol as geologists.
He said most parents created an impression in their daughters’ minds that geology was an underground career and yet it was a field career where one could work underground, on the surface or anywhere.
Prof Nyambe said the department was trying to reverse that trend by creating geo-sciences in schools focusing on the girl child.
Labels: GEOLOGY, MINING
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ZCCM-IH ready to buy shares from mines planning withdrawal
By Joan Chirwa
Friday June 13, 2008 [04:00]
ZCCM-IH will be more than willing to buy shares from companies that want to pull out of Zambia because of the new tax regime, company chief executive officer Joseph Chikolwa has said. But First Quantum Minerals country manager Chisanga Puta-Chekwe said mining companies were not against the new tax regime but the manner in which the law had been implemented, insisting that the government had breached legally binding agreements entered into at the time of investments.
During a discussion on Zambia's new mining sector in Lusaka at the just ended Euromoney Zambia Investment conference, Chikolwa said Zambia had for a long time been at the bottom of taxes for mining companies compared with other mineral rich countries in Africa.
"If some mining companies want to sell their shares because of the new taxes that government has come up with, ZCCM-IH will not hesitate to buy them off," Chikolwa said. "Zambia has been at the bottom in terms of taxes for the mines and that has not benefitted us in any way because copper prices now are very high. "Copper prices are very high, so why are the mining companies complaining?
I am likening the mining companies to farmers who complain when it rains and again complain when it doesn't rain. At the moment, no one expects the mining companies to pack up and go because they have made investments of up to US $3 billion in the sector."
Chikolwa further said none of the mining companies had paid dividends to the government through the Zambia Consolidated Copper Mines-Investment Holdings (ZCCM-IH).
"The business model that was developed for the mining sector did not work. The mining sector has not paid any dividend to the government through ZCCM-IH, so government's decision to revise mining taxes was in the best interest of Zambians," said Chikolwa.
But Chamber of Mines general manager Frederick Bantubonse said ZCCM-IH was aware of the reasons why mining companies had not paid any dividends to the government.
"The prices of copper went down significantly in 2001. When the price of metals started going up in 2004, mining companies had a backlog of carryover tax loses," Bantubonse said. "We also took advantage of the high prices to invest more in the mines. Dividends were not even declared, not that they were withheld."
The government a month ago implemented the three per cent royalty tax on gross revenue of the mining companies, with an initial collection of K29.7 billion at the end of May.
A windfall tax on copper has also been imposed on the mining companies, with government expecting to raise at least US $415 million (about K1.3 trillion) from mining taxes at the end of this year. Other mineral rich countries such as Chile are taxing the mines at five per cent of their gross revenue with collections of up to US$270 million in copper royalties (approximately K874 billion) only in the first quarter of 2007.
And Puta-Chekwe said the fundamental point was not the rate of taxation but the manner in which the new tax regime has been implemented.
"There was a breach of contract on the Development Agreements (DAs) which were signed between the government and the mining companies," said Puta-Chekwe. "Government abolished the DAs after the amendment of the Mines and Minerals Act last year before discussions could be held with the mines on the new tax regime."
Labels: MINING, WINDFALL TAX, ZCCM-IH
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FSSMAZ calls for re-introduction of patrols in gemstone mining
By Chiwoyu Sinyangwe
Wednesday June 11, 2008 [04:00]
Federation of Small-Scale Miners Association of Zambia (FSSMAZ) has declared that its biggest objective is to eliminate illegal foreign middlemen whom they accuse of plundering from small-scale miners in the country. FSSMAZ inaugural president Pauline Shialumba Mundia has urged the government to re-introduce the routine patrols in gemstone mining areas to help eliminate illegal foreigners who were conducting business there.
In interview, Mundia announced that about 14 local small-scale miners in the country would next month participate in the diamond and gemstone expo in the United States.
“The foreign illegal traders have for a long time now been plundering our natural resources because when they come, they offer very low prices which make it difficult for our miners to plough back whatever they sale into the businesses and at the same time contribute effectively to the economy of Zambia,” Mundia said. “We want to eliminate the middlemen so that our miners start dealing directly with the end users so that the sector is able to get the true value of their gemstones unlike at the moment whereby the stones go through many hands, sometimes three to four hands before they reach the end users.”
Mundia said in that way, the miners suffered because they ended up selling at very low prices.
“That is why we want to take our members to the expo in US next month, so that we can allow our miners to have direct contacts with the end users for the metals unlike now when they have to deal with middle men,” he said.
And Mundia said the gemstone sector in the country still faced a challenge of lack of infrastructure for marketing the commodity.
“The gemstone exchange is there in Ndola but then it has not really started but it is in the pipeline. But on the same gemstone exchange, we wish the government could develop a system where there could a mean gemstone exchange in every area where there are major mine operations,” said Mundia.
Labels: FSSMAZ, MINING
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ESMAZ bemoans condition of gemstone sector
By Chiwoyu Sinyangwe
Wednesday June 04, 2008 [04:00]
THE economic diversification of the Copperbelt will be incomplete as long as government continues to neglect the gemstone sector, ESMAZ general secretary Victor Kalesha has observed. Kalesha was commenting on the statement by British High Commissioner to Zambia Alistair Harrison that the government should seriously start economic diversifications of the Copperbelt from traditional copper mining to other sectors like agriculture and tourism because the current boom in metal prices would not last forever.
He said while the Emerald and Semi-precious Minerals Association of Zambia (ESMAZ) agreed with High Commissioner Harrison’s observation, gemstones were more economically profitable than both agriculture and tourism. Kalesha charged that the government had not shown serious commitment to developing the local gemstone sector.
“When the farmers cry, government immediately responds. The same happens to the tourism sector…when they just ‘cough’, government listens but the same can’t be said about the gemstone sector,” Kalesha said.
He further said the government had not put in place enough favourable policies to attract investors into the gemstone sector.
“Even the geological data on areas that have potential for gemstones is not readily available at the Ministry of Mines headquarters so how do you expect to attract investors when such important information is not available?” said Kalesha. “Just recently, a bank from Canada expressed interest in providing us with US $30 million loans to help purchase equipment and machinery for our sector…and all they needed was for government to give that transaction a blessing.
But up to now, our repeated meetings with both Ministry of Finance and mines have not yielded anything as government has just not been responsive. So, while we agree that we need to diversify the economy of the Copperbelt, we feel such move would be incomplete for as long as the emerald sector remains neglected.”
He further disclosed that of the 450 mining licences that government had issued in the emerald sector in the province, only 10 mines were currently operational, of which about 80 per cent were foreign owned.
Kalesha named some of the mines that were currently under full operation as Kagem, Gemfields, Grizily, Twampane, Santas, Ebenizer, Aakala and Melai.
Labels: ESMAZ, MINING
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Diversification on the Copperbelt
By Editor
Monday June 02, 2008 [04:00]
The potential of the mining industry to improve Zambia’s economy should not be underestimated and undermined because to do so would be suicidal. The curse of being born with a copper spoon is the most common explanation of Zambia’s poor economic development. But we believe that this curse is just a big hoax to wish away a more serious analysis of the reasons for Zambia’s poor economic management. The fact that Zambia is endowed with copper resources is a big asset that the country could have used to develop not only the mining industry, but also the other sectors of the economy.
And for this reason, we urge those in government to take seriously the issue of economic diversification on the Copperbelt to sectors such as agriculture and tourism. The advice given on this score by British High Commissioner to Zambia, Alistair Harrison deserves our government’s most serious consideration. And there is no need to pretend, as Copperbelt minister Mwansa Mbulakulima is trying to do, that we are on course with diversification. We are not on course with diversification on the Copperbelt – we are very far away from even making a good start.
There is clearly no need for us to move away from mining to develop other sectors. We can develop other sectors like agriculture and tourism while increasing and improving our country’s mining activities. Two thirds of Kenya is arid and the country has no mineral resources to write home about, but this has not stopped Kenyans from developing a broad-based agricultural sector as well as an impressive industrial and tourism sector.
There is no reason that being mineral-rich should result in an inability to farm or nurture a dynamic industrial structure. In fact, a developed mining sector like Zambia's could easily be the motor for a fast-growing economy.
A large mining sector has resulted in a concentration of population on the Copperbelt. This population, if it were well paid, would have the potential to generate an increased demand for various agricultural and industrial products. The sophistication of the industry would also generate skills that could be used in the other industries. Furthermore, demand for industrial equipment would produce a large enough demand to justify local assembly and later manufacture of industrial equipment.
A good illustration of this is the mining industry's demand for pumping equipment. Pumps of different sizes and capacities are used in almost all operations of the mining industry. Pumps are also in prime demand in various manufacturing industries as well as in agriculture. However, despite the demand for pumps, Zambia does not produce pumps. This is not because there is not a large enough demand for pumps, but rather because certain positive policies have not been taken to encourage such a development.
While the mining industry has been an integrative force in almost all aspects of Zambian life: high urbanisation rate, multilingualism, inter-tribal marriages, heavy drinking habits and so on, it has never been used as the integrating force in the economy.
There are many reasons for this gross omission.
First, the mining industry has always been treated as an external part of the economy.
Second, the dominant position of large international firms in the industry re-enforced the alienation of the industry from the rest of the economy. Consequently, the large mining corporations were left to fashion and determine the country's mining policy. In turn, this re-enforced the view on the part of the government - both colonial and post-colonial - that the industry was only good as a foreign exchange milk cow.
The original sin was committed during the early 1920s when the colonial government gave huge mining concessions to large companies only. In spite of protests from the settler community who had been excluded from participating in the industry, the large mining houses consolidated their hold on the industry by sponsoring policies and pieces of legislation that made it difficult for small mining enterprises to enter this sector of the economy.
In addition, the large international mining corporations fostered a culture that treated the industry as a net exporter of metals without the need to go into semi-fabrication. Unfortunately, this culture became dominant even after the industry was nationalised. In spite of the huge mining activities and the complexity of the technology required, the Ministry of Mines is one of the smallest ministries in the country and possibly, also the least powerful.
While the Zambian mining companies inherited the power that was exercised by the international mining companies, they also inadvertently inherited the corporate culture and strategies of these international firms.
The more poignant examples could be summarised as follows: only mine copper, cobalt, lead and zinc; procure inputs from external suppliers; only export ingots and wire-bars without moving into semi-fabrication; consistently undermine the power of the ministry and by all means never let yourselves be integrated with the rest of the economy.
On the part of the government, the mining industry has always been treated as a special one to an extent that most Zambians, including policy-makers, are ignorant about it. The mystique associated with the mining industry turned into a sacred cow. ‘Touch me not,’ became the industry's clarion call. It was certainly the goose that laid the golden egg.
Labels: DEVELOPMENT, ECONOMY, MINING
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Harrison urges economic diversification on C/belt
By Kabanda Chulu in Kitwe
Monday June 02, 2008 [04:01]
THE GOVERNMENT should seriously start economic diversification on the Copperbelt because high mineral prices will not last forever, British High Commissioner to Zambia Alistair Harrison has advised. In an interview at the just-ended 51st Copperbelt Mining, Agriculture and Commercial Show, High Commissioner Harrison said the increase in both local and international exhibitors was a demonstration of vibrancy in the economic growth of the Copperbelt region.
"This is positive because the economy is getting strengthened through various activities taking place in the region especially in the area of mining," said High Commissioner Harrison. "And the boom in mineral prices is likely to continue, but higher commodity prices cannot last forever; hence, government should seriously embark on economic diversification on the Copperbelt to sectors such as agriculture."
And Copperbelt minister Mwansa Mbulakulima said mining operations would continue but the government was considering economic diversification.
"We are on course with diversification and soon this region will be able to balance food production and mining but we cannot just abandon mining," said Mbulakulima.
During the official opening of the show last Friday, President Levy Mwanawasa, who was represented by Vice-President Rupiah Banda, said there was need to minimise exposure to the risk of falling prices of copper through developing other sectors such as agriculture.
"A few years ago when the price of copper was very bad, government stressed that it was necessary to encourage other sectors like agriculture so that livelihoods that had been lost in mining can be replaced by some in agriculture and we should not lose sight of this important goal even when copper prices are high," said President Mwanawasa.
Labels: ALISTAIR HARRISON, ECONOMY, MINING
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FSSMAZ seeks to achieve unity in mining sector
By Chiwoyu Sinyangwe
Wednesday May 28, 2008 [04:00]
NEWLY formed Federation of Small-Scale Miners Association of Zambia (FSSMAZ) has said the immediate objective is to achieve unity in the country's small-scale mining sector. In an interview after the new association was ushered into office last week, publicity secretary Rosemary Mundia de Boer also appealed for all regional organisations of small-scale miners to support FSSMAZ, an umbrella organisation.
"This is important for the small-scale miners as traders and lapidaries as it would strengthen our voice when it comes to lobbying government and other stakeholders on the demands of our industry unlike in the past when regional organisations used to speak independently," Mundia de Boer said. "We also hope that all the regional organisations will fully support this new association so that as we lobby for policies and other issues that affect the sector, we do it with one voice. This sector offers best opportunities for economic growth but if only we could have enhanced funding to the sector...and those are the things we want achieve as FSSMAZ."
And commenting on the recent statement by mines minister Dr Kalombo Mwansa that most small-scale miners were allegedly buying mining plots and later reselling them to foreigners, Mundia de Boer blamed the trend on lack of working capital and equipment among small-scale miners.
"That is true. But of course the problem is that miners don't have access to things like capital or equipment and that is what we want to address as the new federation," Mundia de Boer said.
The new office bearers include Pauline Shialumba Mundia (inaugural president), Emmanuel Kunda (vice-president), Ian Mashekwa Kalenda (general secretary), Mark Kalemba (vice-general secretary) and Mary Nguni (treasuer general). Others are Thomson Chikolela (vice treasurer), Rosemary Mundia de Boer (publicity secretary), Davies Kakoma (vice-publicity), Carol Chisanga, Winfred Ndlovu, Charles Chilufya and Misheck Chewe are the committee members.
Labels: FSSMAZ, MINING
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Mining has regained position as mainstay of economy, says Mwansa
By Kabanda Chulu
Friday May 23, 2008 [04:00]
MINES minister Dr Kalombo Mwansa yesterday said the mining sector has regained its position as the mainstay of Zambia’s economy. And Dr Mwansa has said employment in the mining sector increased to 58,108 in 2007 from 35,355 in 2000 while the sector’s contribution to Gross Domestic Product (GDP) increased to 8.7 per cent in 2007 from 6.4 per cent in 2000.
Commenting on the 2008 Copperbelt, Mining, Agriculture and Commercial Show that takes place in Kitwe next week, Dr Mwansa said the mining sector’s growth was evident from other developments that had taken place over the years.
“Apart from increased GDP, employment creation and business opportunities for local suppliers of goods and services, the mining sector is growing with new developments taking place and these include establishment of new mines, construction of processing plants and increased exploration activities by private investors,” Dr Mwansa said. “And new mines have been established in non traditional mining areas and for traditional minerals and these include Lumwana in North Western and Munali Nickel in Southern Province and all these are examples of extension of mining activities to non-traditional mining areas.”
Dr Mwansa said the revised mines and minerals Act would enhance efficiency in the delivery of services relating to mining rights.
“Through the introduction of the computerised mining cadastre and geographical information system, fairness in the granting of mining rights will be adhered to through applying first-come-first-served principle and it will also eliminate possible overlaps of mining rights,” he said.
Dr Mwansa said the new system would also enhance availability of full history of licence life-circle for auditing and tracking of actions.
The Copperbelt Mining Agriculture and Commercial Show takes place from May 28 to June 1, 2008 under the theme: ‘mining delivers, agriculture develops and environment matters.’
Labels: ECONOMY, KALOMBO MWANSA, MINING
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Govt affirms cordial relations with mining firms
By Chiwoyu Sinyangwe
Wednesday May 21, 2008 [04:00]
MINES minister Dr Kalombo Mwansa has said the government's relationship with the mining companies in the country has remained cordial despite the new mining taxes. The government introduced new mining fiscal regime which came into effect on April 1 this year. The move resulted in increased mineral royalty to three per cent from 0.6 per cent, while corporate tax on mines rose to 30 per cent from 25 per cent.
The government also introduced a 15 per cent variable profit tax on taxable income above eight per cent and a minimum of 25 per cent windfall profit tax.
The move led to an outcry from mining companies operating in the country which congregated through the Chamber of Mines of Zambia, a cartel of mining companies operating in the country, to denounce the new tax regime.
The mining companies insisted that, by implementing the new mining fiscal regime, the government had abrogated the development agreements that it signed with them.
But Dr Mwansa insisted that the government had clarified with the mining companies and that the new mining taxes were not meant to stifle growth of the sector in the country.
"We still have a cordial relationship with them. Nothing has change. I think they have understood that our reasons to increase the taxes were not meant to hurt them but that we only wanted to get a fair return for our mining sector," said Dr Mwansa. "In fact, we should have been meeting them through their chamber Chamber of Mines of Zambia when we were on the Copperbelt last week for our quarterly meeting but we postponed but we should be meeting them very soon."
Labels: MINING, WINDFALL TAX
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Construction of Konkola North mine to start
By Chiwoyu Sinyangwe
Tuesday May 20, 2008 [04:00]
Construction of Konkola North Mine and a 125 000 tonnes concentrator by Konnoco Zambia Limited is nearing as the mining company has already submitted an Environmental Impact Statement (EIS). According to the EIS, Konnoco has identified inferred mineral resources of 78.8 million tonnes of 2.14 per cent copper in the northern sector for large-scale mining licence of Konkola north area.
The statement which was prepared by SRK Consulting engineers and scientists of South Africa stated that power supply for the mine would be sourced through the Copperbelt Energy Corporation (CEC).
“The concentrator would process about 125 000 tonnes per month of copper sulfide and the oxide concentrate will be sold to a third part for toll processing. Konnoco has conducted feasibility study to recommission the existing shaft and developing a concentrator plants and associated infrastructure on site,” stated the EIS.
Konkola North Mine and Concentrator project is being promoted by Konnoco Zambia Limited which is an indirectly owned subsidiary of Teal Explorations and Mining Incorporated while the project is subjected to buy-in right of up to 20 per cent including five per cent carried interest by Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH).
Teal Explorations and Mining Incorporated acquired large-scale mining licence No. 20 for the Konkola North project in 1997 and the licence confers exclusive rights to Konnoco for a period of 23 years.
Labels: EIS, KCM, MINING
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First Quantum profit doubles
By Rob Delaney
Tuesday May 20, 2008 [04:00]
First Quantum Minerals Ltd., the Canadian miner of copper in Zambia and the Democratic Republic of Congo, said first-quarter profit more than doubled because of higher output and prices. Net income climbed to $182 million, or $2.65 a share, from $78.3 million, or $1.14, a year earlier, Vancouver-based First Quantum said yesterday in a statement. Net sales nearly doubled to $512 million.
First Quantum Chief Executive Officer Clive Newall is increasing copper output to take advantage of rising demand from China and other developing countries.
Copper on the London Metal Exchange was 30 per cent higher, on average, in the first quarter compared with a year earlier, and reached a record $8,880 a metric tonne on April 17.
First Quantum’s total copper output may rise 32 per cent to 310,000 metric tonnes in 2008, from 226,693 tons in 2007, Newall said on January 22.
That estimate was higher than the 300,000 tons previously forecast because of better-than-expected performance at the Kansanshi mine in Zambia.
Kansanshi yielded 52,303 tonnes in the first quarter, accounting for 69 per cent of the company’s total copper output in the period. Commercial copper production at First Quantum’s frontier mine in Congo, which began in November, will be about 84,000 metric tonnes in 2008, the company stated.
Labels: FIRST QUANTUM MINING, MINING
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Mining of uranium to start next year
By Chiwoyu Sinyangwe
Tuesday April 22, 2008 [04:00] Print
GOVERNMENT is set to start issuing mining licences for uranium this June as the International Atomic Energy Agency (IAEA) approves Zambia’s new regulations on Uranium, mines minister Dr Kalombo Mwansa has announced.
And African Energy Resources (AER) Zambia Limited has spent about US$5 million in exploration works at the Chirundu Uranium joint venture project and that the company expects to start mining activities by last quarter of 2009, according to project manager Wilscort Banda.
Speaking in Southern Province last week where he went to inspect the progress on uranium explorations, Dr Mwansa said the law to cover for the mining, storage and transportation of uranium would be ready by June this year.
Dr Mwansa insisted that the government would be ready with the regulations on the mining storage, and transportation of uranium before any of the companies exploring for the energy mineral could reach production stage.
He also said that the government would start issuing mining licences for uranium by June this year and that the regulations would encompass the proposed mining, milling and transportation of uranium and other radioactive minerals in the country.
“We have almost completed finalisation of the regulation that would enable us supervise, licence production of storage and transportation of Uranium to consuming destinations,” Dr Mwansa said.
“The regulations would be ready in the next two months. Much of the work has been done and the United Nations in charge of uranium regulations has had a look at our regulations and at our programme and we are now just finalising them and making them part of the law as a formal statutory instrument and that should done by end of June. I hope companies like Omega Corporation Minerals that are already exploring for Uranium would be among the first ones to be issued with these mining licences.”
Among the companies exploring for uranium in the country include African Energy which is which is exploring uranium jointly with Albidon Zambia Limited at the Chirundu Uranium joint venture project as well as the Kariba Valley joint project.
Other companies include Omega Corporation Minerals Limited of Canada which is searching for uranium in Mutanga area in Siavonga, Southern Province while Equinox Minerals Limited has also reported heavy presence on Uranium at its Lumwana Mine in North-Western Province.
And Dr Mwansa also disclosed that the government did not have immediate plans of starting value-addition process for uranium inform of generating electricity from the energy metal.
He said despite the energy crisis that the country has been plunged into, the government only wanted to use uranium for “economic” benefit to the country and not as an alternative source for energy.
Energy experts estimate that about 200 tonnes of Uranium Oxide (U3O8) are required to produce 1,000 megawatts of electricity for one year, slightly higher that the 900 megawatts of power that can be produced by Kafue Gorge hydropower at its optimum capacity.
“Uranium mineral can be transformed into energy but I am not sure we as Zambia are ready to do that just yet,” said Dr Mwansa. “It is a long-term project which I don’t think we will be able to do in the next 10 years. But for us we are looking at giving employment to our people and earning us some more money into the coffers through taxes but the question of transforming Uranium into energy is a long-term development which is not for the immediate concern now.
And obviously the coming of uranium mines is welcome because it will help in our programme of diversification from the tradition copper and cobalt mining that Zambia has been known for a long time and also helps in the diversification of mining from tradition Copperbelt to other areas like Southern Province.
And in terms of economic growth, it will definitely add to our Gross Domestic Product, increasing employment levels and the general uplifting of the welfare of the people around the area of mining because mining has the capacity to transform areas into phenomenon economic growth immediately when you see mining growing, other activities like agriculture also growing.”
And Banda said the construction of the uranium mine on the Chirundu Uranium was expected to start next year.
Banda also explained that although uranium mining provided a lot of anxiety, it provides the cleanest source of fuel for generating base load electricity with, with very low greenhouse gas emissions.
He also said the AER projects could deliver had the Chirundu Uranium joint venture project had the capacity to deliver enough uranium to produce 1,000 megawatts of electricity per year for almost 17 years at the current resource and that approximately 16 per cent of the current world electricity base load provided by nuclear was likely to rise significantly over the next 20 years particularly in China, Russia, India and South Africa.
“This demand is likely to rise significantly over the next 20 years because if you look at the current trends, there is just more and more demand for power and I think the hydropower is not just meeting that is giving a sharp rise in uranium prices because everyone is now going nuclear energy,” he said.
AER has two uranium joint ventures with Albidon Zambia Limited namely Chirundu joint venture which consists of Njame and Gwabe uranium deposits, while the Kariba Valley joint venture projects encompasses Chisebuka uranium anomaly and Namakande Uranium anomalies.
“One tonne of uranium oxide (U3O8) produces as good as 15, 000 tonnes of energy as coal would produce and about 9,000 tonnes as oil would produce…so uranium is quite powerful and also very clean source of energy,” Banda said. “So you can see that you don’t need lot of uranium to generate lots of power. Just 9.1million pounds of uranium would generate that much fuel for 17 years and so I think that would be a good approach if everything goes well in our project.”
The Chirundu Uranium joint venture project is said to contain approximately 9.1 million pounds in uranium resource.
Banda also said the AER is expected to deliver the first uranium cake by the fourth quarter of next year.
“We just completed a pre-feasibility study and anytime we should be proceeding with the bankable feasibility. According to our schedule, we are suppose to come with it by the last quarter of the year after which we will proceed with construction and the like and the first delivery of uranium is scheduled for the last quarter of 2009 assuming that all the permitting go through. So come late 2009, we are doing the first uranium deliveries,” Banda explained.
He also said AER, an Australian energy company focused on Uranium projects in Zambia, Botswana and Malawi, had the capacity to run a successful uranium mine.
“African Energy board has got widespread experience in developing mines in Africa. Munali Nickel is the best example, Gallery gold in Botswana, Sally Malay Nickel in Australia and Olympic dam which has uranium, copper and gold deposits are also best examples where Albidon and AER directors where directly involved. So we have a lot of experience in both explorations and mining industry, so there is no doubt that they will deliver the standards.” said Banda.
Labels: IAEA, KALOMBO MWANSA, MINING, URANIUM
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Zambia to produce 1m tonnes of copper
MINISTER of Finance and National Planning, Ng’andu Magande, has predicated an increase in the production of copper in the country with tonnes hitting a million by 2010. Mr Magande said the discoveries of new copper deposits, especially in the North-Western Province, would have an upward effect on the output of copper in the next two years. He was addressing Zambians based in Washington DC at a reception hosted by the Zambian Ambassador to the United States of America, Dr Inonge Mbikusita-Lewanika.
Mr Magande also said other rich minerals like nickel and uranium had been discovered and hoped that more jobs would be created at the mines in the country. “The search for uranium in Zambia is part of an exploration that is raising new hope for jobs and tax revenue,” he said. Mr Magande said the Munali Nickel Project in Mazabuka was expected to produce over 900,000 tonnes of nickel in the next 10 years.
He also said he was happy with the 2008 World Bank/International Monetary Fund (IMF) spring meetings, which he attended in Washingston and described them as positive. “We have had very good discussions with the IMF and World Bank. I was proud to meet with members of the two institutions because of the good fiscal policy Zambia has pursued,” Mr Magande said.
He said Zambia was now looked upon as a good partner in development unlike five years ago when Government found it difficult to negotiate with the two institutions.
Mr Magande said Zambia’s reserves were currently over US$1 billion, which was the highest figure the country has ever recorded.
He said the side spring meetings mainly centred on sectors such as energy and water, transport, agriculture, education, health and regional infrastructure.
Mr Magande assured that Zambia’s economy was on track and that the country had registered positive economic growth over the last few years.
He said Zambia was no longer a highly indebted nation as the country had managed to reduce debt from US$7.2 billion to US$500,000.
“Zambia is now in a position to make its own decisions on how to develop because the donors can no longer instruct the government on what to do,” Mr Magande said.
He urged Zambians living abroad to invest at home because of the good business opportunities put in place.
Mr Magande said Zambia had changed for the better and that her citizens were now able to invest in various sectors of the economy.
And Bank of Zambia Deputy Governor for Operations, Denny Kalyalya, said the Zambian economy had performed well in the recent past.
Dr Kalyalya said Zambia had recorded positive real Gross Domestic Product (GDP) growth and that inflation and interest rates had gone down.
He said the unprecedented developments in inflation in the country had been due to continued implementation of prudent monetary and fiscal policies, coupled with increased food supply.
He said Zambia had become an attractive country for foreign investors because of her sound economic performance.
Those who attended the reception included International Monetary Fund (IMF) senior advisor to the executive director for Africa, Inyambo Mwanawina, special assistant to the vice president at the International Finance Corporation (IFC), Dolika Banda, senior lawyer in the legal department of World Bank vice president, Kenneth Mwenda and executive members of the society of Zambians in the United States of America (SOZUSA). – ZANIS.
Labels: INONGE MBIKUSITA-LEWANIKA, MAGANDE, MINING
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Chief seeks govt help over illegal mining activities
By Chiwoyu Sinyangwe
Wednesday April 16, 2008 [04:00]
PARAMOUNT chief Chitimukulu is seeking the government’s intervention over a matter in which a named company is mining copper ore in an area where Bemba chiefs are buried. But mines deputy minister Maxwell Mwale has said it is highly unlikely that any company can start conducting mining activities in the chiefdom without the consent of the chief.
Speaking at his palace in Mungwi over the weekend, Paramount chief Chitimukulu complained that the company was mining in Nkula area in Chinsali, a sacred place where Bemba chiefs were buried.
He, however, did not disclose the name or specifications of the mining company.
“Now the problem is that we don’t know where these people came from or who authorised them to start doing those activities because as far as we are concerned, they did not even approach me because that is my area. So how do you have people starting to mine in an area without even paying a courtesy call on me? So I appeal to government to intervene in this matter,” he said.
And in a separate interview, Mwale said there was something wrong about the whole situation surrounding the mining activities in Paramount chief Chitimukulu’s area.
He, however, said the government was not aware of any company that was conducting mining activities in the area and stressed that it was unacceptable for any company to conduct mining activities in burial places.
“There is something amiss about the whole issue because there is no way a company can start conducting mining activities in that area without the consent of the paramount chief because that it his area. It is traditional land,” said Mwale.
Labels: CHIEF CHITIMUKULU, MINING
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Chief seeks govt help over illegal mining activities
By Chiwoyu Sinyangwe
Wednesday April 16, 2008 [04:00]
PARAMOUNT chief Chitimukulu is seeking the government’s intervention over a matter in which a named company is mining copper ore in an area where Bemba chiefs are buried. But mines deputy minister Maxwell Mwale has said it is highly unlikely that any company can start conducting mining activities in the chiefdom without the consent of the chief.
Speaking at his palace in Mungwi over the weekend, Paramount chief Chitimukulu complained that the company was mining in Nkula area in Chinsali, a sacred place where Bemba chiefs were buried.
He, however, did not disclose the name or specifications of the mining company.
“Now the problem is that we don’t know where these people came from or who authorised them to start doing those activities because as far as we are concerned, they did not even approach me because that is my area. So how do you have people starting to mine in an area without even paying a courtesy call on me? So I appeal to government to intervene in this matter,” he said.
And in a separate interview, Mwale said there was something wrong about the whole situation surrounding the mining activities in Paramount chief Chitimukulu’s area.
He, however, said the government was not aware of any company that was conducting mining activities in the area and stressed that it was unacceptable for any company to conduct mining activities in burial places.
“There is something amiss about the whole issue because there is no way a company can start conducting mining activities in that area without the consent of the paramount chief because that it his area. It is traditional land,” said Mwale.
Labels: CHIEF CHITIMUKULU, MINING
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State against mines job cuts
By MUKULA MUKULA
MINISTER of Labour and Social Security, Ronald Mukuma, has
advised investors in the mining sector against measures that will result in labour cuts and the imposition of a freeze on wage increments to make savings for payment of new mineral taxes. Mr Mukuma said in an interview yesterday in Kitwe that there was no justification for mine owners to think of reducing their workforce or imposing such a freeze because they still remained viable even after the introduction of the new taxes.
‘’The fact that they are supposed to pay the windfall tax does not mean that it has changed their financial status in anyway, they are still viable organisations. Therefore, there is no reason for them to reduce the labour force,’’ Mr Mukuma said.
The Non Ferrous Africa Mining Company (NFCA) last week said it would invest US$150 million in its west ore body on the Copperbelt but that salary increments may suffer next year.
At Mopani Copper Mine (MCM), tension among workers is running high following instructions allegedly given to personnel managers to identify areas where the mine could reduce the labour force to ameliorate the mineral taxes.
MCM Chief Services Officer, Passmore Hamukoma, declined to give details of the new measures.
However, he said management would consider the interests of Zambia.
Mr Mukuma said government’s priority at the moment was to reduce unemployment levels because that was the best way of reducing poverty.
‘’The excuse of tax for reduction of labour cannot be accepted by government.
They have to give another reason, not the reason of tax that government has introduced,’’ he said.
Mr Mukuma said government was extremely cautious when it arrived at the new tax figures because it took into consideration the fact that mines had to sustain their workforce and make reasonable profits.
He said the action government took was fair and in the interest of the country and that the mines should not create an impression that government was unjustified in introducing the new mineral taxes.
‘’We took all that into account and found that it was a fair action by the government.
They should not show a picture that government took this action without taking a lot of things into account,’’ Mr Mukuma said.
NFC deputy Chief Executive Officer Goa Xiang said last week that his company had no choice but to pay the new taxes except that it would have adverse effects on workers who expected an 18 to 20 per cent salary increment every year.
Konkola Copper Mines (KCM) has unconditionally agreed to pay the new mineral and royalty taxes because of the high copper prices at the international market which justify government’s decision to increase the taxes.
KCM Resident Director, Deb Bandyopadhyay said last week that there was no point in taking government to court because the mineral and royalty taxes were justified by the copper prices at the international market.
Minister of Finance and National Planning Ng’andu Magande announced the new tax regime during the budget presentation in January.
Royalty tax has been pegged at three per cent from 0.3 per while company tax has been increased from 25 to 30 per cent.
Some mine owners threatened to take the government to court if it insisted on implementing the new tax regime, which they claim contradicted legally binding development agreements signed when purchasing the mines.
Labels: CASUALISATION, JOBS, LABOUR, MCM, MINING, NEOLIBERALISM
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