State to tighten mineral exports monitoring

GOVERNMENT is investigating the difference between production and exports declared by Konkola Copper Mines (KCM) to determine if mineral royalty paid on cobalt matches with quantity and value.

Minister of Mines and Minerals Development Richard Musukwa told Parliament yesterday that Government will soon introduce a mechanism through which mining companies will be issued with invoices for mineral royalty based on mineral analysis.

“This will allow for payment of mineral royalty on all minerals contained in the consignment and not on sales as it currently is.

“We will also provide adequate resources for the ministry to collect samples from the sites where the commodities are mined.


Source: Daily Mail

Mines PLC’s assurance to keep miners’ jobs

Government says it is gratified with Mopani Copper Mines management’s assurance that no miner will lose employment during its implementation of cost saving measures the company is undertaking.

Mufulira District Commissioner, Hildah Kawesha says Mopani Copper Mines management has informed her that no one of its employee will lose their job at the Mufulira mine site it is implementing cost saving measures meant to keep the operations of the company viable.

Ms Kawesha who revealed this Bright Nundwe paid a courtesy call on her yesterday in Mufulira District, that Mopani has informed her that since it has been operating at a loss due to operational challenges it has undergone, it has decided to implement cost saving measures.

According to a memo issued to its employees, the mining giant cites low copper output, increased power tariffs, and unpaid VAT refunds as among the major reasons that risk making the operations of the mine unsustainable.

And Copperbelt Permanent Secretary, Bright Nundwe has instructed security wings in the area to be on high alert for any smuggling of mealie meal as this could jeopardize the country’s food security.

Mr. Nundwe said there is need to ensure full enforcement of the existing ban on mealie meal exportation ,in order to avoid hikes in mealie meal prices.


Source: Lusaka Times

Mining sector GDP input low

GOVERNMENT is concerned about the mining industry’s low contribution to the gross domestic product (GDP) despite being a critical player in the country’s economy.

It is for this reason that Government wants to see that the sector increases its contribution from around 12 percent of the GDP, the total value of goods produced and services provided in a country during one year, to about 40 percent.

Speaking at the Africa Chief Executive Officers (CEO) Forum yesterday, Minister of Finance Margaret Mwanakatwe said Government is keen on encouraging value addition to the mining industry because it is a strong business, thereby proposing to reduce company income tax from 35 percent to 15 percent.


Source: Daily Mail

Luapula calls for manganese mining audit

The Luapula Province Administration has called for an audit of manganese mining licenses in the province.

Provincial Permanent Secretary Buleti Nsemukila says the move is aimed at ascertaining people who hold licenses so that it can be easy to facilitate for partnerships with potential investors.

Speaking when Ministry of Mines Permanent Secretary Paul Chanda paid a courtesy call on him recently, Dr. Nsemukila said this could be done through the Zambia Consolidated Copper Mines Investment Holdings -ZCCM-IH.

Meanwhile, Mr. Chanda said his office is concerned with lack of adherence to mining regulations in Luapula and Central Provinces by some mining firms.

He revealed that his office will soon be engaging traditional leaders on issuance of mining licenses.


Source: ZNBC

Zambia mines to pay mineral royalties in dollars to stabilize kwacha

LUSAKA, Oct 2 (Reuters) – , its finance minister said on Tuesday.

The kwacha gained more than 5 percent to close at 11.9500 per dollar on Tuesday after hitting 12.6750 on Monday, its weakest level this year.

Margaret Mwanakatwe said in parliament that pressure on the currency of Africa’s No.2 copper producer had mounted lately due to demand for dollars from importers of petroleum products and external debt servicing obligations.

“One of the key measures that we put in place is that mining companies will pay their mineral royalties in dollars directly to the Bank of Zambia,” Mwanakatwe said.

Zambia said last Friday it will introduce new mining duties and increase royalties to help bring down mounting debt, a move likely to be opposed by mining firms.

(By Chris Mfula; Editing by Tiisetso Motsoeneng and Emelia Sithole-Matarise)


Source: Mining.com

Suppliers Welcome New Mine Tax Regime

The Association of Mine Suppliers and Contractors has welcomed the proposed tax changes in the mining Sector in the 2019 National Budget saying Zambians will benefit from their own mineral resources.

President Augustine Mubanga said the changes to the tax regime in the mining sector will add to Zambia’s economic growth.

He said the changes to the mineral royalty tax by a 1.5% increase on each sliding band and the 10% rate that will trigger at $7,500 and above is a positive step.

“These changes will ensure benefits in the way tax collection is derived and ensure that the people of Zambia benefit from their resources. Most notably is the increase from 5% to 8% of Cobalt MRT, However, we think that government could have done more on this tax, considering the fact that cobalt MRT has not changed in a long time, a fair adjustment of 10-15% was going to ensure that maximum revenue collection is achieved,” he stated

Mubanga has since urged mining houses to support the changes especially that in the last four years government had ensured that the sector stabilizes from world economic stress of 2008, 2014 and 2015 by maintaining a constant tax regime.

He has appealed to mining firms not use the proposed changes as an excuse to deny Zambians business.

“We further encourage these mine houses to do more in supporting local suppliers and contractors to access even more opportunities. We also feel that reforms such as mandatory listing of the Mines at LUSE will provide an opportunity to Zambians to own shares and participate directly into the running of the mines, and also government can take advantage and increase its shareholding through ZCCM-IH,” he said.

Mubanga has further proposed that a regulated 40% of procurements in the mining sector be given to Zambians owned supplier and contracting companies.

“The mining sector spends between US$3billion to US$4.5 billion annually this includes CAPEX, If 40% is captured it will increase economic activities thereby increase contribution to the GDP and employment. The Mines have taken advantage of this gap to procure 80-90% of goods and services from outside,” Mubanga said.


Source: Zambia Reports

Zambia pins its economic hopes on diversity

Historically reliant on copper mining, Zambia is trying to diversify its economy in order to protect it against future price drops and encourage greater foreign investment.

When commodity prices, most notably for oil, dropped in 2014, many African economies were left exposed. Too many of them were over-reliant on their natural resources and lacked other means of income.

Zambia was no exception. Traditionally reliant on copper mining, when prices dropped, its economy and currency dropped with them. Now the government is determined to secure foreign investment in a range of other sectors, so that it is protected from future fluctuations in the copper price.

“Our main objective is to sell the country as the best investment destination,” says Secretary to the Treasury in the Ministry of Finance Fredson Yamba. “We strongly believe that there are a lot of opportunities, especially in mines and also in agriculture and tourism, where potentially people can invest and get a return on their investment,” he tells ALB.

“We don’t want to just rely on mining as a major source of economic activities,” he says, explaining that the expansion into other areas is “a deliberate policy” of which he is realistic about the need to diversify. “We are aware in Zambia that we rely too much on copper as a source of foreign exchange earnings, because currently 70% of our foreign exchange is derived from copper mining activities and 30% comes from non-copper activities.”

Playing a prominent role in attracting foreign investment and developing different areas of industry are two companies: ZCCM Investment Holdings (ZCCM-IH), which owns and operates a significant proportion of Zambia’s copper mining industry, and which, while publicly traded, is majority owned by the wholly state-owned Industrial Development Corporation (IDC).

The other is Africa Prospect Development Zambia (APDZ), launched late last year, a private company which is developing investment opportunities in collaboration with the government.

Founder and managing director of APDZ Sam Mulligan says that whereas the African mining scene is largely dominated by the majors, the company aims to bring “qualified juniors” into the Zambian prospecting market “by presenting attractive investment opportunities with very strong corporate governance to the international mining community”. There is a longer-term view to expand into other industries, but for now Mulligan says the focus is on mining.

DIVERSIFICATION OPTIONS

“The diversification will not be rhetorical, it will be practical,” says Muyeba Chikonde, High Commissioner to the United Kingdom, who explains that the government will redirect resources to the project as and when necessary.

The agricultural expansion is not just about growing more crops, but also adding value to the industry overall. Yamba highlights the cultivation of fast-growing eucalyptus, which can be used for perfumes, timber and eucalyptus oil

Manufacturing and tourism are also on the agenda. Yamba cites the success of tourism to Livingstone to see Victoria Falls, but is also eyeing the potential for other regions, such as Eastern Province or the Northern Circuit.

The country is also trying to diversify within the mining sector, progressing with mining projects including uranium, manganese and gypsum, which is used in the production of cement, another industry which Zambia is pursuing. In August, ZCCM-IH announced a joint investment with China Machinery Construction Group (SinoConst) in a company called Central African Cement, which will build a new cement plant in Zambia.

There is also interest in the way that separate industries can interact, such as using by-products of copper mining as fertiliser for agriculture.

With the government predicting increased mining and agricultural production for 2018, Yamba says there should be greater revenue available to fund future development in health and education. “Going forward as a country we should be able to provide for certain basic needs so we foresee a situation where everything looks brighter as we stand in the short term and medium term.”

Chikonde reports a positive response from foreign governments so far: “We are finding that Zambia has continued to be a favourite destination for investment. We have conversations with other countries, and we know that comparatively we are at an advantage,” he says, citing political stability and ease of doing business. Zambia was listed at 85 in the World Bank’s 2018 Doing Business rankings, three places below South Africa, but three places ahead of Tunisia and more than 20 places ahead of other African countries including Namibia, Malawi, Cape Verde, Egypt, Tanzania, Ivory Coast and Senegal.

The presence of the delegation of government, ZCCM-IH and ADPZ at the Mines & Money conference in London last year was no coincidence either, with Zambia courting British investors ahead of the United Kingdom’s departure from the European Union, scheduled for 2019.

“With the coming of Brexit, we feel we stand a better chance of being in a good pipeline position in the UK and also the others that are looking for investment in Zambia,” says Chikonde.

Lack of electricity has been a major hinderance to industrialisation efforts in many African economies, including South Africa, and it was a contributing factor to Zambia’s economic decline during 2014 and 2015.

ZCCM-IH owns a 35% stake in Maamba Collieries, which has built a thermal plant, powered by low grade coal, in the south of the country, and the company is also investing in hydro power, which is quite strong in Zambia, and solar, with the aim of lowering the price of energy in Zambia.

In 2016, Infrastructure development company InfraCo Africa invested in a hydropower project in Zambia’s Western Province, while Chinese investment in Africa’s energy and infrastructure sector trebled in 2017.

ECONOMIC CHALLENGES

It has not been all smooth sailing, however. Zambia had hoped to improve its economy during 2018, to the point that it could agree a loan programme with the International Monetary Fund (IMF). However, the IMF put any such programme on hold last year, over concerns about Zambia’s debt levels; a problem that has plagued many African nations.

IMF mission chief Boileau Loko said in February this year that the government’s plans “continue to compromise the country’s debt sustainability and risk undermining its macroeconomic stability and, ultimately, living standards of its people. Against this background, future program discussions can only take place once the Zambian authorities implement credible measures”. Recent reports suggest that a deal is no closer.

Yamba had said the hope was for IMF funds to help with the budget, balance of payments and foreign exchange reserve.

Another issue facing the Zambian economy is employment. While the government is focused on improving the overall economic picture, so that more job opportunities will be created, APDZ chairman Caleb Mulenga said it was up to business to help meet the demands being placed on the economy by the population growth which has given it a sizeable young population.

“These people need employment. So it is up to us in the private sector to go and create more employment.” APDZ believes it can offer this by attracting small and medium-sized mining projects to the country.

Given the economic obstacles that still face Zambia after the 2014 crash, the diversification plans are an important part of the path to the government’s vision for the country.

“We want as a country to attain the status of a middle-income country,” says Yamba, pinning hopes on its medium-term development plans, with the aim of being “more systematic and consistent [in order] to achieve certain goals in the foreseeable future”.


Source: African Law Business

President Lungu praises Switzerland’s mining investment in Zambia

President Edgar Lungu has described the dialogue and patriotism among member countries as key ingredients in promoting humankind.

And President Edgar Lungu has reiterated that his administration will work with all countries that are willing to work with Zambia to enhance cooperation in all social and economic activities.

The Head of State said this when a Switzerland business delegation led by Switzerland Ambassador to Zambia Moritz Burrichter paid a courtesy call on him at state house in Lusaka today.

During the meeting, President Lungu praised Switzerland’s mining investment in Zambia, saying that there is need to strengthen both unilateral and bilateral relations between two countries.

“Your visit to Zambia is timely because you will have an opportunity to witness what Zambia can offer as opposed to reading negative headlines in newspapers and online publications,” President Lungu told the business delegation.

And Mr Burrichter said his country is eager to promote trade and investment in Zambia, as well as help the country achieve its reform programmes that will facilitate economic development.

He stressed that Zambia and Switzerland share the same values and that Switzerland will work with Zambia in the fight against HIV/AIDS.

Switzerland’s presence in Zambia dates back to the late 19th century, when Protestant missionaries from French-speaking Switzerland began working in eastern Zambia in 1885.

Switzerland recognized Zambia immediately after it gained independence in 1964 and established diplomatic relations with it two years later, by opening a consulate in Lusaka in 1969.


Source: Lusaka Times