Zambia: mining companies should cough up more!Published by MAC on 2012-02-14
Source: Reuters, Zambian Times (2012-02-08)
The Zambian government says it's no intention of nationalising the mining industry - a position adopted last week by South Africa's own ruling party.
However, Zambia intends to increase its stake in mining companies by 15% and recover taxes the companies haven't paid - which might come to as much as US$1 billion.
Zambia to audit mining companies; estimates $1bn taxes owed
8 February 2012
CAPE TOWN - Top African copper producer Zambia plans to audit all its mining houses in a bid to dig for back taxes of up to $1 billion it estimates it is owed, its mines minister said on Tuesday.
Such a policy by the government of populist president Michael Sata would widen an initiative launched by the previous administration and comes against the backdrop of a surge of resource nationalism across Africa and Zambia's own doubling of copper royalties to six percent.
"We need to look at what the mining industry has been giving. What we have been told by the World Bank and others is that we did not collect adequate tax," Wylbur Simuusa told Reuters on the sidelines of an industry conference in Cape Town.
Asked what he believed was owed, he said: "By our calculations it might be between $500 million and $1 billion."
Simuusa said the government planned to start with the big mining houses and said one auduit was imminent but he declined to name the company.
"So we are now actively pursuing this. We intend to audit all the mining houses but we'll audit the big ones first," Simuusa said.
According to UK charity Christian Aid, more than half of the copper Zambia exported in 2008 was destined for Switzerland, but according to Swiss import data almost none of this arrived and Simuusa said this trend continued.
This raises a number of transparency issues and activists say copper exported to Switzerland on paper often fetches a lower price than it would if it was exported elsewhere.
"Once it leaves, where does it go? We don't have a clue," he said.
Copper producers operating in the country include Canada's First Quantum Minerals, London-listed Vedanta Resources and Glencore International AG.
Miners in Zambia have themselves said they want independent international auditors to verify they are paying all the taxes that they should.
(Reporting by Ed Stoddard, editing by William Hardy)
Zambia mines minister: We shall not nationalise mines
By Maimbolwa Mulikelela
1 February 2012
GOVERNMENT has reiterated that it has no intention of nationalising the mining firms but plans are underway to increase its shares from the current 20 per cent per cent to 35 per cent to encourage more Zambian participation.
Mines Minister Wlybur Simuusa said the Government would like to maintain 65 per cent shareholding for the investor and 35 per cent for the Government through Zambia Consolidated Copper Mines Investment Holdings (ZCCM-IH).
Mr Simuusa said the development would encourage Zambians to fully participate in the running of the mines through ZCCM-IH.
He said when the Government talked about increasing its stake in the mining sector, the international market was jittery.
"We want the ratios to be 65 per cent to 35 per cent, when that ratio was reported in the international media, I was told the market shares danced but I was surprised at the nervousness in the industry and the international community," Mr Simuusa said.
Speaking when he toured Maamba Mine yesterday, Mr Simuusa said the Government would not nationalise the mines but was considering increasing its shareholding structures in the mining firms.
"As Mines minister what I am saying is that we are not going to nationalise the mines but we would want to increase our participation as well as increasing our shareholding in the mining companies, "he said.
Mr Simuusa cited Maamba Collieries Limited (MCL), where Nava Bharat Singapore Property (PTY) Limited acquired 65 per cent equity stake from ZCCM-IH while Government owns 35 per cent.
That is quite unfortunate and as a new Government we want to turn this around and the key starts here and you are partners to help us.
Through the ZCCM-IH, the Zambian Government owns 100 per cent shares in Ndola Lime, 15 per cent in Luanshya Copper Mine, NCF Africa Mining Chibuluma Mine and the Copperbelt Energy Corporation (CEC).
It also has 10 per cent shares in Mopani Copper Mines (MCM) and Chambishi Metals with a further 20.6 per cent in both Konkola Copper Mine and Kansanshi.
"As Maamba you are a unique case, it is the only mining firm where Government owns 35 per cent and the investor owns 65 per cent and that has been my magic number. If you have been following my statements I have been saying that one of the measures we want as PF Government is to increase Zambian participation in our mining industry," he said.
He said 35 per cent was good ratio as this would give Zambians an opportunity to derive maximum benefits from the mineral resources.