Zambia, Africa’s top copper producer, has tightened its regulations on taxation of mining companies to boost compliance and revenue collection, the minister of mines said on Saturday.
President Michael Sata has expressed concerns that copper exporters are misrepresenting the amount of metal leaving the country. Data shows much of Zambia’s exported copper is destined for Switzerland, but little of it shows up in Swiss customs figures, raising questions about transparency.
Mines Minister Christopher Yaluma said that mining companies would now be required to provide information on tonnages, type and grade of ore mined, quantities and the end product.
Yaluma said mining companies would also be required to submit annual reports on the recovery percentages and efficiency of all mining and metallurgical processes.
“We have reviewed legislation in order to independently monitor the production and export of minerals and failure to comply will result in revocation of licences and other punitive measures,” he said in a statement.
Mining companies will also be compelled to provide details of the quantities of minerals sold and their average selling price, he added.
“Mineral production has been improving over the years but this improvement has not been matched with a corresponding increase in revenue to the government,” Yaluma said.
Vice President Guy Scott said in April that Zambia planned to tighten its grip on the government’s share of profits made at the country’s mines, boosting tax revenue.
Companies operating in Zambia include Glencore, Indian miner Vedanta and Canadian-listed First Quantum, Barrick Gold and Brazil’s Vale.
[Reuters]
What we were told is that you would introduce windfall tax. We want windfall tax, not those actives that will make you spend more money to put in place. This government will be the worst government in Zambia
I really pity some of these folks who have no idea what is going on in the mines in zambia. There are so many issues to be sorted out within the country before we can even follow up on exported material. talking of transparency, just go to the KCM website, see how verge the data they will give you. If you are interested in exported copper for example, you will look out for the refinery production for the so called REC, do you find it? even the refinery? you wonder who is going to put things in control.
Long over due if you ask me!!!! Investors in the mines did not pay taxes because they bought chitenge materials and funded MMD election campaigns. I have no concrete evidence, but how else can one explain the lack of commitment to this issue by the MMD govts for almost twenty years?! The only person who seemed to want to do spmething about this was LPM. Surely, even raising the tax rate to 8-15% of the billions in profits these mines are making wouldn’t hurt them. But we have been duped into believing that doing so will chase these investors away. If so, why havent they run away from countries like Australia where, I believe, the tax rates are much higher. We not even talking about the stringient environmental laws that these companies have to follow, yet they have not left!
More stealing by pf . Remember they promised better taxation, where is it?
Thats very annoying and frustrating news. Instead of reintroduction of windfall taxes, you saying something else??? shame on you PF!
atse..what about energy..stop load shedding you kolwetsans..
Well done PF, this is long overdue. I can see haters on this blog are bleeding with envy!!!!
Pragmatic approach that will delve in the financial heath of mining comapnies and their tax paying capabilities. In this way future changes on the mining tax regime will be done from an informed point of view with current emprical data on operational costs and transaction costs at hand
I don’t see anything new from this. That is basic information required for taxation, all we need is windfall, no matter what measure you use companies always have a way of avoiding or evading tax. It much easier to increase revenues with windfall tax than with a set of new rules which wont even guarantee you compliance f the companies.
Another suggestion to you Mr Minister is:
1. Engage a Zambian private inspection company to monitor weights (quantity) and Quality of the concentrate and the final product at mining locations and Issue certificates of quantity.
2.The company should also construct weighbridges at all border posts and record each and every tone of copper being exported – Also issue a certificate of quantity (COQ) at bolders.
3. Compare the COQ issued at the mine (production) to the COQ at exit. Do they Tally?
6. Mining Companies to pay tax based on these COQs
I can provide details of how this can work if it makes sense. I have alot of experience in this kind of work.
I like you man….very practical!
Go ahead and provide more details @kwekwe for this is what we all need, especially the government. We can not leave this fight to the government alone. If you are very conversant with your suggestions as you seem, please go ahead brother so that the more we have this information, the quicker it will get more attention by government.
please provide more detail as your suggestion is indeed is a good one.
if you dont have the right quantities that are exported even windfall tax is a shum.so this is long overdue.
#9Kwekwe: these are the patriotic people Zambia craves, offering solutions to motherland’s problems- not ‘senior citizen’ and Icilema who can only offer torrents of criticism and engage in vitriol and all manner of disenginous smears against government leadership.
Good move, let us not just critisize, analyse and give credit where it is due, first, be professional, and later, be a cadre.
I can see a black person trying to be good a manager. Kwekwe #10 has a great idea and I hope he/she can have the opportunity to share it with govt
Yes, Kwekwe #10, your suggestion is best and must be implemented ASAP.
One Zambia One Nation.
Kwekwe idea is so much better than the minister’s “barking”.
How do you expect them to report themselves to you???? Minister, stop chewing “aka chani!!!!”
I also agree with Kwekwe mwe. Much of what the minister has suggested is not good enough. Just a verification of quantities exported and obtaining prices can enable us do rough calculations closer to the truth. Can the mines really report to you on those aspects correctly? Mwe…
SR. CITIZENS HAVE SPOKEN TIME & AGAIN, WE NEED WINDFALL TAXES!! “It is an injustice for the government to only collect US$ 77.6 million from copper exports valued at US$2.9 billion. And I do not see that the mines themselves in their heart of hearts would consider it an injustice to pay extra more. Do you honestly think they (mines) are going to close down and leave? The reality is that at the moment there is predicted a long term shortage of supply (of copper) which would mean the price is likely to rise even further. So I do not understand why there are these fears of the investors leaving. They (government) ought to realise that copper is a wasting asset, it is not going to grow in the ground again.”
SR. CITIZENS HAVE SPOKEN TIME & AGAIN, WE NEED WINDFALL TAXES!! ”Mining companies don’t look at the tax rates, they look at profits and for as long as they are making profits which they are at the moment, we will have a lot of mining companies which will come. Higher taxes would not discourage future investments into the mining sector as investors were driven by political stability and profitability, both which the local mining sector boasted of. Most private companies outside the country are looking for more copper because of demand on the international market. Angola and Democratic Republic of Congo (DRC) are one of the most unstable countries in the world in terms of democracy and wars but still they receive a lot of investments. They can NEVER run away….BUFI WEKA WEKA!!
SR. CITIZENS HAVE SPOKEN TIME & AGAIN, WE NEED WINDFALL TAXES!! When we talk about profit sharing, who determines the profits? We lack the skills of metallurgists who is supposed to be based at ZRA (Zambia Revenue Authority) to assess the profitability of mining companies before the accountant or the taxman come in. We urge government to rethink its position on incentives given to foreign investors in the industry. I can give an example of Lumwana Copper Mine… the mine owners have borrowed US $1 billion for the recapitalisation of the mine, which is a very good thing, but the question is who has borrowed that money? As part of the development agreement, Lumwana will for next seven years not pay tax, but they will be using our resources and roads, so at the end Zambians will bear the debt
Government can create more jobs for the youth by compelling mining companies to process our minerals in Zambia. Let’s introduce a mineral export tax that will compel mining companies to establish mineral beneficiation industries in Zambia where our unemployed youth will find jobs.
@10 Kwekwe, you need to make a submission to the Ministry of Mines, Trade & Industry and ZRA, I think they are either sleeping or letting it go at a huge benefit to themselves (money in their own pockets at the expense of our economy)!
PF has dull ministers,worse its UKWA.Like sum1 has already noted,the issues the minister is trying to brag about is purely basic data needed in assessing mineral taxes.Then,how was taxation arrived at before..????? very useless dull chaps in government.! CHIMBI NO PLAN at work.
@10, your contribution makes a lot of sense. Is it possible for you to present your suggestions to the Minister directly?
Thats the way to go boss. You are one of the best engineers ever to come from Zambia. I am sure ESKOM misses you. Now lets see what you can do for mother Zambia. If you need people boss we are here to help.We have all the qualifications in metallurgy and MBAs. By the way do not accuse me of looking for a job from the PF as I have a good one with Angloamerican down here in Mzansi and will have to cut my leg to leave it.
Can we also classify cathode copper as a raw material and introduce a policy like charging for example $500 per tonne of the exported raw material like what the SA GOVT imposed on the exporters of ferrochrome ore. The mines must set up companies to process cathode copper into value added products like wire rods which will also help in creating jobs locally. Why is ZAMEFA struggling with so much copper around in that country?