High royalties and tax payout for Kansanshi, Kalumbila

The latest Zambia Extractive Industry Transparency Initiative (ZEITI) report has indicated that First Quantum Minerals (FQM) contributed the majority of government revenue generated from the extractive sector in 2019.

According to the report, the mining giant’s two subsidiaries – Kansanshi Mining Plc and Kalumbila Minerals Ltd, contributed K5.7 billion and K2.6 billion respectively, representing 31 percent and 14.4 percent of total payments in the year.

FQM’s total contribution of K9,347 billion – which includes K973.65 million from First Quantum Mining and Operations – represented 51 percent of the K18.4 billion total revenue generated from the sector and paid to government in 2019.

The payments included VAT, PAYE, Mineral Royalty Tax, Import Tax and Income Tax, as well as other payment flows.

The report also highlighted that Kansanshi Mining and Kalumbila Minerals had the lowest – indeed negligible – reconciliation differences based on comparisons of revenue reported by the mines and Zambian government.

The figures in the latest ZEITI report underscore FQM’s commitment to transparency and accountability of its operations, said FQM Zambia Country Manager General Kingsley Chinkuli.

“The numbers in the ZEITI report are built on the belief that to build trust and a sustainable licence to operate, we need to have open and inclusive conversations about the cost-benefits of mining.

“We remain committed to the multi-stakeholder group approach that lies at the heart of the ZEITI accountability process and aim to replicate this approach everywhere we operate,” he said.

The Country Manager added that the company remains resilient and highly competitive while continuing to unlock significant further potential within the constraints of the current fiscal and economic environment.

“Our commitment to paying the right amount of tax is critical, as is generating additional local benefit from the strength of our large workforce and supply chain,” General Chinkuli said, noting the company’s contribution to the Zambian economy.

However, its contribution goes far beyond just paying wages, royalties and taxes, he emphasised.

“As big as we are, our fiscal contribution will not deliver on its own. We need to continue working with others to stand up for and to implement the principles behind these wider economic benefits.”

The 12th EITI report also showed that the extractive sector contributed 9.9 percent to GDP, accounted for 77 percent of the country’s exports, and provided 28 percent of government revenue.

By: Andrew Maramwidze


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