ARM EXCITED WITH GOVT’s ASSURANCE ON WINDFALL TAX
Friday April 13, 2012
 Simelane (far right) with his mining counterparts, making a presentation before Mr Chikonde and mission staff at the chancery. |
AFRICA Rainbow Minerals (ARM-Copper) chief
executive Dan Simelane says the mining company
is excited over the government’s pronouncement
that windfall tax would not be introduced on
mining companies operating in Zambia.
Making a presentation at the Zambian High
Commission offices in Pretoria on Wednesday, Mr
Simelane, who was in the company of Pierre
Joubert, chief operations at ARM and Vale senior
project leader Renato Souza, said the mining
companies were happy following the government’s
assurance that windfall tax would not be imposed
on the mining companies anytime soon.
Mr Simelane said ARM and Vale were scared that
there would be radicle changes in the policy
when the PF government took over power, but was
happy that the new government took less than
four days to finalise the agreement with the
mining company.
ARM and Vale have entered into a joint
partnership of 50-50 to own 80 percent of the
shares to develop the Konkola North mine
(KONNOCO), with Zambia Consolidated Copper
Mines-Investment Holding (ZCCM-IH) contributing
the remaining 20 percent of the US$412 million
investment in the mining project.
On the same issue, Zambia’s High Commissioner to
South Africa Mr Muyeba Chikonde said the
government campaigned on the basis of lower
taxes and did not want to go against that
policy.
He assured Mr Simelane and his counterparts that
their investment in Zambia was safe because the
political environment in the country was mature.
Mr Chikonde further said President Michael Sata
was trying to align government to
professionalism so that investment is sustained,
saying that was why the mission was happy with
the company’s promise to prioritise local
companies.
Mr Simelane said the mining companies had come
up with a deliberate policy to hand exclusive
rights to Zambian companies for the supply of
goods to the mine, which would become fully
operational in December this year, with an
initial workforce of 2000.
“We are grappling with the definition of a local
Zambian company. A company from South Africa
that opens a branch in Zambia is not a Zambian
company. Zambia has got more experience in terms
of copper mining than South Africa,” he said
Mr Simelane said above 95 percent of senior
positions in the company would he held by
Zambians in order to ensure the advancement of
the local people in senior positions.
He said ARM was the biggest “black” mining
company, with a market capitalization in the
South African economy of R40 billion, with
interest in platinum and coal mining, adding
that KONNOCO would be the first mining company
they would build outside South Africa.
Mr Souza said Vale was the second largest mining
company in the world with representation in over
28 countries which included Mozambique,
Australia and Canada.
Mr Joubert said the name KONNOCO would be
changed to Lubambe and would have its own logo
to stop people from confusing it with Konkola
Copper Mines (KCM), which was owned by Vedanta.
He said the company would comply to pay mineral
royalty of six percent on the gross value, 30
percent corporate income tax, plus the variable
profit tax, while the direct training costs of
the mine was budgeted at $1.5 million per year.
Mr Joubert said the mineral royalty was
approximated at $15 million per annum, company
tax, including variable tax at $45-50 million
per year, personal tax on wage bill at
approximately $6.0 million per year to the
fiscals, while the Millennium Village Project,
which had already been approved would drive up
the skills of the local community.
He said the life expectancy of the mine was 28
years, with a projected concentrate output of
45,000 tonnes per annum, which they planned to
increase to 100,000 tonnes per year when they
expand operations to the Southern limb.
Issued by:
Patson Chilemba
First Secretary (Press)