Zambia Chamber of Mines president Nathan Chishimba says the mining industry has no major concerns going into next month’s elections because there is an understanding among all political parties that mining is not a short-term venture.
There have been concerns by some political and economic commentators that after the elections, there will be new changes to mining regulations and taxation policies.
This has been the trend over the years because political parties and the civil society had argued that mining companies don’t make meaningful contributions to the country’s economy, which resulted in Zambia changing mining policies six times, causing anxiety among investors and delays in implementing projects and exploration works.
But Mr Chishimba said continued dialogue with Government has borne positive results.
“Government has just introduced a new mineral royalty tax, which the mining industry has welcomed since it is progressive and we are very certain that there is a better understanding among all political players that mining is not a short-term endeavour.”
“Political parties understand now that benefits emanating from the sector always have to be viewed over a longer life span than what might be politically expedient,” Mr Chishimba said in an interview with the Mining Weekly magazine.
On the dissenting views by civil society on the new mineral royalty tax, Mr Chishimba said the new regulations will enhance collection of mineral revenue by Government rather than compromise it.
“One cannot separate mining tax revenue from mining investment because investment ultimately produces tax revenue so a good tax system balances these two competing objectives,” he said.
Under the new royalty tax, which applies to both underground and open cast mining, when copper price is below US$ 4,500 per tonne, mining companies will pay four percent, and if the price is between US$ 4,500 and US$ 6,000 per tonne, the mines will pay five percent, and if the price is higher than US$ 6,000 per tonne, mines will pay a rate of six percent.
The old royalty tax had a fixed rate of six percent for underground and nine percent for open cast operations