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A Zambian minister renewed his government’s commitment to a more stable and transparent fiscal regime for the mining industry on the eve of the country’s return to its former tax regime after widespread criticism.
Deputy mining minister Richard Musukwa said that the government was also looking to forge better links with the mining sector to ensure policies are well structured and more predictable.
“I must restate my government’s position and reiterate our commitment towards ensuring that as a government we run and operate a mining industry which has a stable fiscal regime, which is simple, transparent and in most cases, of which many of you investors are looking for, reliable,” Musukwa said, speaking at an industry event in Lusaka.
Zambia’s revised a 2015 mining tax regime due to come into effect on September 2.
It will see the tax system move from a single-tier fiscal regime implemented in January back to the two-tier fiscal regime used previously, following a huge outcry from the mining sector.
With copper prices at or below the cost of production, the move will provide an additional lifeline to miners struggling to stay profitable.
Mining accounts for three-quarters of the country’s export revenues.
“We have demonstrated many times that the industry has raised an alarm about some of the undertakings we have done as a government, our capacity to not only listen but to demonstrate that we are able to change certain course of action after consulting,” Musukwa said. “I must tell you that my government is determined to ensure that we forge more communicative linkages with the Chamber of Mines and all the players in the mining sector so that together, we can structure decisions that are going to allow us to be more predictable and that we must be able to move together as a team,” he added.
According to Musukwa, trust between the government and the mining sector should be premised on a broad-based consultation with the Chamber of Mines, the country’s custodian of the mining sector.
Musukwa said the Chamber was a critical partner and called for increased production by exploiting local reserves and extensively investing in the development of the mines. Zambia hosts an estimated 10% of the world’s known copper reserves and has a wide variety of other minerals and metals that are being exploited in different parts of the country, he noted.
But while the government is keen to ensure the private sector remains its key partner in the development of the mining sector, he called on miners to integrate mining into the local economy in order to create a strong and sustainable economy for the benefit of all.
Andrea Hotter ahotter@metalbulletin.com Twitter: @andreahotter