First Quantum Minerals (FQM) has paid more than US$850 million in taxes, royalties, duties and fees to government, community and infrastructure expenditure in 2020.
The payments made to With operations in Australia, Finland, Mauritania, Panama, Spain and Turkey, and multi exploration prospects in a number of other countries, the payments represents 78 percent of the entire contribution FQM paid globally.
The figures were disclosed through FQM’s annual Tax Transparency and Contributions to Government Report, to comply with the Canadian government’s Extractive Sector Transparency Measures Act (ESTMA), which requires the reporting of profit taxes and royalties paid in specific countries of operation.
Meanwhile despite the additional challenges faced in 2020, FQM achieved its highest ever annual copper production, which was reflected in the increased amount of its contributions to Zambia’s public finances.
The report further shows that FQM paid approximately US$209.5 million in mineral royalties ($195.8m, 2019), and a further $202.8 million in company income tax in Zambia during 2020 ($176.2m, 2019).
As part of the company’s voluntary disclosures, the report reveals that USD $6.5 million was spent on community projects, and infrastructure support during 2020.
In addition to its regular community programmes, the company provided COVID-19 testing equipment, personal protective equipment (PPE), and treatment and isolation facilities for the surrounding communities in North-Western Province, including a new ICU and high dependency care unit at Solwezi General Hospital.
FQM also voluntarily disclosed that US$53.6 million were paid in payroll taxes during the year. Taken together with the US$1.65 billion that FQM procured from Zambian registered companies in 2020, from more than 2,500 businesses, these figures illustrate the substantial benefits to the Zambian economy of promoting investment and employment.
FQM Country Manager General Kingsley Chinkuli said the mining company prided itself on always going above any beyond the requirements set by law.
“By disclosing our contributions in all forms – taxes and duties, royalties and other contributions paid to our host countries – we are doing our bit to foster good governance,” said Chinkuli.
“We also appreciate that mining companies, that are accessing a non-renewable national resource, need to be fully transparent about their finances. Read together with our published financial statements and production information, this data offers a clear line of sight into the workings of each of our operations, and the group as a whole. It all constitutes an open book approach, so there can be no confusion as to what is mined where, and what taxes are paid on it.”
The Extractives Sector Transparency Measures Act (ESTMA) has since 2015 required Canadian-listed natural resources companies to publicly disclose tax payments made to foreign and domestic governments.
The Act illustrates the benefit to countries like Zambia of having responsible investors, listed in jurisdictions with a strong rule of law, that insist upon strong corporate governance and compliance with international standards.
FQM is also a member of the Extractive Industries Transparency Initiative (EITI), an international standard that requires governments and companies to report key information about the extractive sector.