The Zambia Chamber of Mines has warned that policy instability would negatively affect the mining sector.
The Chamber has expressed concern over what it has termed as abnormal and impractical mining policy proposals.
In a joint statement by the chamber board and council, the Chamber said the mining industry has been confronted with a raft of mining policy initiatives, which amount to an unprecedented threat to investors.
The Chamber said if the Zambian government does not go back to the drawing board on these proposals, it risks undoing all the good work achieved since 2021 in attracting mining investment to the country.
According to the Chamber, the international community is now waking up to these developments, and questions are being asked about what is perceived to be a clear U-turn in policy direction.
“Industry representatives point to a serial unwillingness by the relevant government ministries to consult meaningfully, and at an early stage, with the industry. Policies and draft laws have been conceived and drafted in isolation, with industry consultation treated as an afterthought. Detailed industry concerns and counter proposals are received, but ignored. As a result, the proposals that the government is currently taking forward are commercially impractical and, in certain key provisions, abnormal in their application to the mining sector. The Chamber has already publicly voiced its concerns over the looming Minerals Regulation Commission Bill that is currently before Parliament. Amongst other failings, the Bill grants unaccountable and arbitrary discretionary decision making powers to individual regulators, presenting obvious future corruption risks,” the statement read.
“This at a time when there are already inexplicable actions by the Mining Cadastre to reallocate or carve up licenses.Now, as revealed in the recently released National Critical Minerals Strategy 2024-2028, the Government is set upon mandating a minimum 30% stake for the State – at no cost – in all new mines, together with an additional minimum 30% ‘production share’. There is no definition for production sharing – a mechanism sometimes applied on a project basis in the oil and gas sector – but if this were a share of mine revenue, it could amount to an additional 30% royalty, on top of the mineral royalty tax (MRT) that is already applied. These proposals are so far outside the norm for global mining investment that they will undoubtedly deter potential investors from exploring Zambia. Furthermore, if we once again acquire a reputation for policy instability, as a nation that changes course every few years as short-term needs dictate, we will do ourselves long-term damage.”
The Chamber argued that the proposals that the government is currently taking forward are commercially impractical and, in certain key provisions, abnormal in their application to the mining sector.
“Zambia must extract fair value from its national resources, however our Government should be open to different perspectives, particularly those with a commercial understanding of the business of mining, in determining what constitutes a fair return for nation and investors alike. If we continue down the present road, the unintended consequence will be to drive away potential investors, and delay our nation’s development for yet another decade,” the Chamber stated.
At the end of the day, a fair share and value addition are required. GRZ needs to study the Swedish model on mining taxation for optimum revenue generation from our mines.
Are the present policies unstable?
It is implied
I’m not sure if we should be encouraging more mining activity in Zambia. The Latin American republic of Peru has a sizeable mining industry. It has left the country choked in pollution.
Not with tye home economist in charge of.our economy
Government is on firm ground on this one and should not be arm twisted. Zambia has not been getting a fair share of its mining resources for a long time, and even the opposition has been voicing out the same. Accountability, especially tax evasion of from our so called investors has also been under discussion for a long time, whether true or false is yet to be established.
Lets clean our own house up before talking about tax evasion
No the fight against tax evasion should run parallel to the broader fight against corruption. We will never clean such a dirty house. The corruption is ingrained in all it’s occupants: I. e. Every one over 18 up to the president
We are a babazonke country and the foreign mining houses that pull the strings at the chamber of mines know this and are determined to keep it that way.
Some investors are putting more back into this country than its own wealthy citizens
lets get our facts straight NOT ALL INVESTORS ARE CROOKS
Guys,
Read Helen Zulu’s article “Mining Consultant Advises African Countries”. It’s on Google
This is why I ask for HH’s strategy. Ba economist what is your plan? What priorities have you set and how can we monitor them? At least PF had a plan: to borrow for necessary infrastructure even if they stole the borrowed money. But ba Bally no manifesto. Ni fly fly… Ichi fly fly every week.