As Copperbelt Province Economics Association of Zambia Chapter, we would like to term as very unfortunate and ill timed, the sentiments attributed to ZCCM IH through its CEO Dr. Pius Kasolo towards the new mining tax regime that Government has proposed with a view to maximise returns for the Zambian people.
The motivation behind these remarks begs an answer as government was already engaging the respective foreign mines and positive strides were being made to achieve a mutually beneficial consensus.
While we appreciate that every company’s objective is to increase its top line and maximise the bottom line, the mandate of this holding is to represent and reflect governments will which is to improve the welfare of its people through provision of employment and social services..
In the recent past we have seen the mining sector drop in GDP contribution as well as
tax avoidance schemes through transfer pricing and continuous declaration of losses.
Even with the incentives such as electricity subsidies and tax windows the mining industry participation in economic growth has been declining over the years
In October last year government did indicate that no mining operations will be affected by the new taxes, and the fear that job losses would be precipitated by the new taxes was later allayed as mines agreed to meet government and amicably resolve any apprehension around the new tax regime.
ZCCM should know that government desires more return beyond dividends as the trickle down effect and multiplier effect of job losses, social benefits and opportunity costs of forgoing mining returns is huge.
We would have expected ZCCM IH to advocate for more returns from the mining industry than issuing statements that are not aiding dialogue between government and the mining stakeholders.
The statement by ZCCM-IH is very unfortunate because most mines like Mopani, FQM, KCM and Luanshya mine among others have indicated that they will not retrench or downscale their activities.
We advise ZCCM-IH to prioritize the resuscitation of Ndola Lime which falls under its portfolio instead of contradicting government’s position.
We expect ZCCM-IH to be in the forefront of giving answers to the many questions Zambians have regarding the mines such as the cost of producing a tonne of copper, how much cobalt is being mined?, where is the gold mined going to? among others.
ZCCM-Investment Holdings (ZCCM-IH) Chief Executive Officer Dr. Pius Kasolo has said the 2019 planned mining taxes would impact negatively on ZCCM-IH which holds shares on behalf of the Government in the mining companies.
Speaking at a media briefing held in Lusaka on Monday 28th January,Dr. Kasolo said that the new taxes would affect investments and production of the mines, hence the need to resolve issues as this could have an impact effect on dividends paid to the holding company.
“At the moment, taxes have not come to fruition but by projection the move will affect ZCCM-IH because we get dividends from the companies.” He said.
Dr Kasolo added that companies such as Lubambe Copper Mine were finding it difficult to raise capital because of uncertainty surrounding the tax regime.
He said Kansanshi Mines was also planning to suspend its South Dome Project, which was expected to increase the mine-life.
Dr Kasolo said it was important that the issue was addressed without affecting production and development of the mining sector.