COMMENT - 1) Every time the mines threaten to leave, they pay a $30 million fine; 2) when they leave, all their assets revert to state ownership within 30 days. Sounds good to me.
Zambia miners ask government to facilitate tax policy
Monday, December 20, 2010, 13:37
The Zambia chamber of mines has asked government to facilitate predictability of the tax policy regulations to enable the industry contribute positively to the growth of the economy.
There have been calls from various players for the government to revise the tax regime in the industry to enable the country benefit from the mines, Zambia’s crown jewel, since copper prices have soared high above USD 8,000 per tonne. Chamber of mines in Zambia president Mr Nathan Chishimba noted that uncertainty in the policy formulation was creating anxiety among investors.
Zambians should focus on the future and its long term benefits that are accruable from the industry. The mining industry requires collaborative effort and networking among sector players to further spur sustainable growth for the country. For the industry to sustain growth and contribute to national development positively, sector players should ensure transparency and efficiency in the way they ran affairs in the industry.
Mr Chishimba speaking during the 2010 International Mining Conference and Exhibition hosted by Konkola Copper Mines in Chingola noted that said since the year 2000, more than USD 5 billion investment had been made to the industry, an indication that the sector was growing.
He said certainty of policies in the industry was vital, now than ever before as the players were focusing on one objective of steering the industry to higher heights. The chamber, he said, formed the column which could spearhead the common vision of resolving the problems the industry was facing rather than existing just to criticize the partners.
The investment in the mining sector since 2000 had resulted in tripled copper production from 250,000 tonnes to more than 700,000 this year and attributed the growth to the contributions from various mines.
The chamber of mines envisions that production, if enhanced by good and reliable policies, could help increase copper production to one million tonnes target by the year 2012. And government has asked mining companies to help sustain growth in the industry and job creation in the aftermath of the rebound in the price of the mineral, copper, especially now that the financial crisis was over.
Mines minister Mr Maxwell Mwale said it was government’s desire to support companies that remain vibrant and steadfast even in an event that another shock occurred in the industry. He said that “I note that Zambia’s largest mining house, KCM, has led in many areas. The most notable is the expansion program and a commitment to make Zambia a global giant in copper production.”
The mining industry would continue to be the main driver of the Zambian economy. The industry was the major earner of foreign exchange and highest contributor to the growth domestic product of about 11% in 2009.
He said that “As Government, we note that along these investments has come a massive transfer of mining and construction technology into Zambia. This will help in the improvement of efficiency. We are convinced that with more mining firms following KCM, our industry should be able to make progress towards attaining the 20% contribution to GDP by 2015.”
[Steel Guru]
Labels: CHAMBER OF MINES, NATHAN CHISHIMBA, WINDFALL TAX
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Foreign firms call for new Zambia mine policies
Written by Reuters
Wednesday, August 19, 2009 6:26:13 PM
LUSAKA (Reuters) - Foreign mining firms in Zambia, Africa's top copper producer, want the government to adopt mining policies that will boost investment at a time when copper prices are recovering, an industry official said on Wednesday.
Nathan Chishimba, president of the Chamber of Mines of Zambia (CMZ), which represents interests of the mining firms, said companies wanted stable and longterm policies that would reduce risk to their investments.
"(Mining companies) are not saying the policies should not be changed, but that there should be consistency so that any changes to the policies should not result in fundamental shift in the direction of the industry," Chishimba said.
In 2008, Zambia introduced a 15 percent profit variable tax, 25 percent mineral windfall tax -- which it scrapped in 2009 -- and raised corporate tax to 30 percent from 25 percent, upsetting foreign mining firms.
Zambia said last week it will not refund foreign mining companies millions of dollars they paid in taxes when the controversial law was in force, but could revise existing taxes.
"We must have policies that recognise the magnitude of the risk in the mining sector, which is the longterm nature of the industry," Chishimba said.
Chishimba said Zambia was set to achieve the targeted production of 600,000 tonnes of copper this year.
"The country can achieve the target provided that all other factors such as reliable supply of power and other logistical arrangements are met," Chishimba said.
Some of the foreign mining companies operating in Zambia include Canada's First Quantum Minerals, London-listed Vedanta Resources Plc, Equinox Minerals and Glencore International AG of Switzerland.
Labels: CMZ, NATHAN CHISHIMBA, WINDFALL TAX
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Chamber cautions mine owners
By KANGWA MULENGA and REBECCA CHILESHE
THE Chamber of Mines has appealed to mine owners to exercise caution before making final decisions on future operations of their mines even in the face of the global financial recession which has affected the mining sector globally.
Chamber of Mines president, Nathan Chishimba, said in an interview yesterday that it would be beneficial for both mine owners and Government to exercise maximum restraint when making decisions that would affect the operations of the mines.
He also appealed to Government to consider talks with mine owners about the future prospects of mines in Zambia following the drop in metal prices globally.
Mr Chishimba said there was need for mine owners and Government to make productive decisions for the mines to continue operating.
“This is a very difficult period for the mining sector not only in Zambia but globally,” Mr Chishimba said.
And Mr Chishimba said there was need for Government and Glencore to meet and discuss comprehensively on the way forward before implementing the directives by Government that Glencore should surrender assets of Mopani Copper Mines (MCM) in Mufulira and Nkana Copper Mines in Kitwe.
Government last week ordered Glencore to surrender the assets following the decision by the investor to suspend operations at the two mines and place them under care and maintenance until copper prices returned to US$5,500 per tonne.
“That matter can nicely be handled by the owners of the assets but as a chamber, we can only advise that the two parties should sit down and discuss the matter comprehensively on the way forward,” Mr Chishimba said.
And Minister of Mines and Minerals Development, Maxwell Mwale, says systems have been put in place to ensure that assets of Mopani Copper Mine (MCM) in Mufulira and Nkana Copper Mines are secured to prevent asset stripping.
Mr Mwale said in an interview yesterday that other than the measures that had been put in place, it was not possible for Glencore - the owners of the mines - to flee the country because there were a number of legal procedures that were in place.
He assured Zambians that assets were safe and that Government was now waiting for Glencore to hand them over at an appropriate time.
Glencore is a Swiss company which operates the two mines as a joint venture with First Quantum Minerals of Canada, which also owns Kansanshi Mines in Solwezi.
Mr Mwale at a press briefing last Friday ordered Glencore to surrender assets of the MCM and Nkana to ensure continued operations and avoid further job losses in the mining industry.
“We have put systems in place to ensure that assets of MCM and Nkana are secured. The same systems will apply to any other mining company that will in future write to us with intentions of putting their assets under care and maintenance. I can assure you that the assets are safe,” he said.
Mr Mwale said the legal procedures to be followed in such a situation were many and that all of them had to be met before any investor could be allowed to leave.
Labels: CHAMBER OF MINES, GREAT DEPRESSION II, NATHAN CHISHIMBA
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Govt opens negotiatons with mining companies
Written by Chiwoyu Sinyangwe
Wednesday, December 24, 2008 3:27:20 PM
GOVERNMENT has commenced negotiations over the requests made by mining companies for the sector to remain afloat despite continued collapse in international copper prices.
Chamber of Mines of Zambia (CMZ) president Nathan Chishimba who disclosed the development stated that the cartel of mining companies in the country was grateful to the government for allowing dialogue to ensure the investment climate in the country’s lifeblood remained positive.
Chishimba however refused to disclose the contents of the ongoing discussion between CMZ and the government, saying it was inappropriate for him to disclose the contents.
“I can confirm that we have engaged with the government regarding the urgent need to ensure that the mining industry remains afloat during this acutely trying period, but I think it is not appropriate for me to divulge the details of the ongoing discussions with government at this time,” stated Chishimba in response to a press query.
“Having said this, I would like to place on record our appreciation of the efforts that government is making to engage with us and ensure that the investment climate remains positive.”
But it has been learnt that some of the demands the mining companies have made to the government included the zero rating of windfall and variable tax and that mineral royalty tax be graduated at levels of copper prices as follows; above US $3 per pound at three per cent, US$2 per pound to US$ 3 per pound at 2 per cent and one per cent for below US$2 per pound.
They further proposed that in calculating mineral royalty tax, mining companies be allowed to offset copper and cobalt price participation from gross sales, as these were not realized in the hands of mining companies. The other demands are that the government should reduce company tax for mining to 25 per cent from the current 30 per cent and allow mining companies to offset selling against gross revenues.
In respect of the customs and Excise (Amendment) bill 2008, the mines are proposing that these be withdrawn until sufficient smelting and refining capacity is successfully commissioned and that the government suspend excise duty on local diesel and waive road levy on diesel imported for use in plants and mines
And Chishimba stressed that the genesis of the current global economic crisis lay outside the country, with the world economy in recession which was close to a slump. He said any efforts that the government could make in response to any representations may only go so far to mitigate the adverse fallout from the crisis.
“We can only try and assist government to ensure that any measures taken dovetail with and complement the strategies that other countries are taking in this regard. This way, we will minimise, but cannot avoid, the adverse impact of the global economic crisis on Zambia, not only in the mining sector, but in other industries as well,” stated Chishimba.
Labels: CMZ, MINING, NATHAN CHISHIMBA
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COMMENT - How ironic that the same people who received billions of US dollars in tax exemptions because taxes would be 'bad for business' now want us to accept massive joblosses, because it's 'just business'. I guess everything that is good for Lumwana's shareholders is good for Zambia too, right? It is time for a government that tells the foreign mining companies to take a hike. They take and take and take, and when it is time for the smallest sacrifice, they threaten to leave or have their cronies in the media and society cry all kinds of foul. Either we have a government that benefits the people of the country, or a government of stooges for the mine corporations. Rupiah Banda has a choice to make.
‘Mines’ job-cuts inevitable’
By Times Reporter
THE Chamber of Mines in Zambia (CMZ) has defended retrenchments in the mining industry saying the exercise is inevitable and not intended to pressure the Government to revise the tax regime.
But other stakeholders yesterday insisted that the retrenchments were unjustified, as most mines would remain profitable despite the falling copper prices and global economic meltdown.
CMZ president Nathan Chishimba said in Lusaka yesterday that the retrenchments that the mining companies had embarked on were also being done in other sectors of the economy but received little publicity.
The Zambia Congress of Trade Unions (ZCTU) on Wednesday accused the mining companies of using the copper prices and global financial crisis to hit at the Government over the new mining tax regime introduced this year.
Mr Chishimba said the problems brought about by the falling copper prices and global economic recession were real and the mining companies were ready to dialogue with the Government to come up with the best way of addressing the situation.
“The question of arm-twisting the Government does not arise because what the mining companies are going through in Zambia is happening elsewhere in the world and the best we can do as a country is sit down and discuss,” he said.
Mr Chishimba said the mining companies did not take pleasure in seeing Zambians being left jobless and it was for that reason that the investors were ready to meet with Government officials to resolve the problems.
He further called for calm among Zambians as the mining companies, the Government and other players in the industry attempted to find a solution to the problems.
On Wednesday, President Rupiah Banda expressed concern over the retrenchment of workers by mining companies and called for dialogue to look at other ways of reducing costs without resorting to job cuts.
Mr Banda said the Government would always encourage negotiations in resolving problems facing mining and other investors as a result of falling copper prices and the global financial crisis.
Transparency International Zambia (TIZ), the Southern African Centre for the Constructive Resolution of Disputes (SACCORD) and the United Liberal Party (ULP) separately said the mines previously made huge profits to sustain today’s operations.
TIZ president, Rueben Lifuka said the mining firms had for years made huge profits with little benefit to ordinary citizens and it would therefore be socially irresponsible for them to retrench workers at this critical stage.
He said that most of the workers had been loyal to their employers who should this time around shown signs of being socially responsible by ensuring that the workers remained in employment.
“When the going was good they did not want to share the benefits but as TIZ our advice to them is that they should be socially responsible to the workers who have stayed with them in good and bad times,” Mr Lifuka said.
Saccord executive director, Lee Habasonda said the Government should quickly initiate dialogue with the mining companies in order to avert the retrenchment exercise.
Mr Habasonda emphasised that investors should be socially responsible and it was in difficult times like this that they should be interested in the well-being of the Zambians.
“They are now showing us that their interest is to make money and leave. What we expect from these investors is for them to keep the workers in employment even in difficult times,” Mr Habasonda said.
ULP president, Sakwiba Sikota said that most mining firms would be profitable because of the money they made when copper prices were at the peak and the most prudent thing for them to do was to absorb some losses that might arise as a result of the falling prices.
“The mines have to come up with figures justifying the need to retrench because at the current copper prices, they can still not make a loss. The prices are still high and so they need to explain why there is this need for retrenchments,” Mr Sikota said.
He further said that the firms could not give the recently introduced windfall tax as the excuse for retrenchments because such tax only comes into effect when a certain target has been met.
The opposition leader advised the Government not to take kindly the decisions by mining firms to retrench workers but demand a thorough explanation.
Labels: CHAMBER OF MINES, JOBLOSSES, MINING, NATHAN CHISHIMBA
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State pledges to prioritise fight against poverty
By Times Reporter
Government will prioritise the fight against poverty by helping expand the private sector in order to create more opportunities for the poor, Finance and National Planning Minister, Situmbeko Musokotwane, has said.
Dr Musokotwane said in Lusaka yesterday that poverty could be best fought by expanding the private sector.
Speaking when he met a group of cooperating partners, the minister said expanding the private sector would offer opportunities for the poor and ultimately improve their lives.
He assured cooperating partners that although there was a new team at the ministry, the basics of economic management would not change.
The minister said for Zambia, 2008 started as a good year with high copper prices promising a lot for the country, but that the scenario changed with the fall in prices.
Copper prices fell by about 60 per cent, affecting the country’s foreign currency earnings.
Dr Musokotwane said he would next Tuesday issue a ministerial statement in Parliament on the current copper prices.
He, however, said at the moment, the banking sector had not been affected by the fall in copper prices.
Speaking on behalf of cooperating partners, Swedish ambassador, Lars Ronnas, said good relations between the Zambian Government and cooperating partners should continue.
Mr Ronnas said it was good that Dr Musokotwane knew the principles which cooperating partners used although the main issue was local ownership of the programmes.
He said donors wanted to see good governance and transparency in the use of funds and also in the fight against corruption.
“We agree that a prudent fiscal policy is key to Zambia for it to pursue other issues because fighting poverty comes to a country with a growing economy,” he said.
On agriculture he said Zambia needed a policy that would guarantee food reserves and avoid investment in one area of agriculture.
And before holding a closed door meeting with the Chamber of Mines, Dr Musokotwane said the ministry was ready to listen to the mining sector because it was still the country’s mainstay of the economy.
He said he wanted to encourage investment in the mining sector because it could move the country forward.
Chamber of Mines president, Nathan Chishimba, said mining companies looked forward to working with the new minister.
Labels: COPPER, NATHAN CHISHIMBA, POVERTY, SITUMBEKO MUSOKOTWANE
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Chamber of Mines urges govt leaders to exercise self-control
By Kabanda Chulu
Tuesday September 02, 2008 [04:00]
CHAMBER of Mines president Nathan Chishimba has appealed to government leaders to exercise self-control in order to maintain current economic growth rates. And Zambia State Insurance Corporation (ZSIC) financial and investments director Zingani Phiri said there was no need to disturb the budget cycle because of the state funeral.
During the contribution of K100 million towards the funeral for the late President Levy Mwanawasa at the Bank of Zambia (BoZ) yesterday, Chishimba said the mining sector had continued to grow due to the good policies of the late President.
"When President Mwanawasa was elected in 2001, the mining sector was not performing well but over the years and due to his guidance (President Mwanawasa), the mining sector has continued to grow and just last year, a UK based group of investors voted Zambia as the best mining destination," said
Chishimba. "So we appeal to government leaders to exercise self-control and show good leadership during this solemn moment in order to maintain and sustain the current economic gains."
And presenting a ZSIC cheque worth K20 million, Phiri said the state funeral should not be left to government to handle alone.
"During the reign of the late President, the insurance sector has continued to record positive gains and in appreciation to what late President Mwanawasa did, we are presenting this little token to supplement government efforts because they should not be alone in this funeral," said Phiri.
"We hope this will help in one way or another especially that the funeral was not planned for hence the budget cycle should not be disturbed."
And receiving the donations, BoZ deputy governor Dr Denny Kalyalya said the financial contributions would ease the financial pressures which government is faced with the state funeral.
"We thank the stakeholders for making these contributions and it shows that the late President touched on many lives through his able leadership qualities and we need to remain steadfast to ensure continued growth," said Dr Kalyalya.
Last Friday, Investrust Bank Plc made a contribution of K20 million and so far the Central Bank has remitted K196.5 million towards the funeral.
Labels: CHAMBER OF MINES, NATHAN CHISHIMBA, ZINGANI PHIRI, ZSIC
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