CAPE TOWN –10TH FEBRUARY, 2016 – GOVERNMENT says it is engaging mining companies to consider different options so that the two parties could come up with consistent and predictable policies for the mining sector.
And mining houses in Zambia have hailed the Zambian Government for its continued commitment to finding lasting solutions facing the sector.
Gemfields Plc, 75% owners of Kagem Mine, and Vedanta Resources Plc, owners of Konkola Copper Mines (KCM) have said that they appreciated the openness with which Government was approaching the various efforts that have been tabled so far in order for the parties to arrive at a mutually beneficial set of policies.
Vedanta Resources Plc Chief Executive Officer, Mr. Tom Albanese, said during a ‘Country Case Study’ on Zambia at the on-going Mining Conference in Cape Town today that his company was proud of what the negotiating team had achieved with the Zambian Government in getting round the challenges facing the sector.
He said KCM respected the “owners of the resources in Zambia” because they realised the pivotal role that the company played in the lives of Zambians.
Germfields Plc Chief Executive Officer, Mr. Ian Harebottle said his company had all the confidence in the Zambian Government which had continued making the country “an excellent investment destination.”
The two were part of a panel discussion which also comprised Zambia’s Minister of Mines and Minerals Development Mr. Christopher Yaluma, Deputy Finance Minister Mr. Christopher Mvunga and ZCCM-IH Holdings Chief Executive Officer Dr. Pius Kasolo.
The session was also attended by Deputy Minister for Mines and Minerals Development Mr. Richard Musukwa, Zambia’s High Commissioner to South Africa His Excellency Mr. Emmanuel Mwamba, several multi-national mining investors, and business executives from various sectors.
And Mr. Albanese disclosed that KCM has made tremendous progress in repositioning itself in the last two years and could comfortably say that it was now able to withstand the current low copper prices.
“We are hopeful that there will be positive trends soon and the copper business will start coming round this year although this will not be in the range of 6 to US$8, 000 per tonne.”
He said Vedanta Resources understood the current problems, such as the energy shortage, that the Zambian Government was grappling with and would like to be part of the solutions.
On the developing consistent policies to guide the mining sector, Mr. Mvunga said Government was alive to the fact that mining was a long term investment for which owners needed to be able to plan ahead without difficulties.
“We are in constant dialogue with the mines to arrive at a consistent and predictable tax regime. We realise that there is need for a certain form of certainty as these are long term investments,” he said.
Mr. Mvunga said Government, just like many other players in the sector, realised that mining had moments of “troughs and crests”. He said Government was glad that there was still a show of optimism from the mining houses themselves.
He reminded mining companies to look at the ‘Remission rule’ governing the operations of mines in Zambia so that they could put it to use in troubled times as the current scenario.
Dr. Kasolo pointed out that trends in the mining business were of cyclical nature and that these occurrences were beyond the control of any government.
And responding to a question from the audience, Mr. Yaluma assured the mining sector that Government was not considering reintroduction of the Windfall Tax until such a time when conditions dictated so.
Mr. Yaluma said Zambia had been through a period of depressed metal prices and that Government was confident that the country would emerge out of the current one victoriously.
He said Government, the industry and all other stakeholders had their roles to play in order to reverse the downturn.
The Minister told the audience that in order to ensure growth and sustainability of the mining industry during all financial scenarios, a clear and articulate policy that sought to create a competitive, thriving and sustainable mining industry had been adopted.
Mr. Yaluma noted that Government had also adopted the revised Mines and Minerals Development Act of 2015 which was enacted to bring the law in line with international best practices.
The new law addresses among other things; the unnecessary bureaucracy in the issuance of mining rights; inadequate tenure of mineral processing licences; Mineral royalty rates, and promoting good governance, transparency, adherence to the rule of law and regular dialogue with stakeholders.
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