Mines Minister Richard Musukwa has hinted that government may make temporary rebates to some mining companies over the disputed 2019 fiscal regime if they show justifiable cause.
But his Finance counterpart Margaret Mwanakatwe has contradicted Musukwa by insisting that 2019 mining fiscal regime is now law and that mining companies have no choice but to comply.
The 2019 mining fiscal regime, which took effect January 1, 2019, has seen an increase in mineral royalty rates by 1.5 percentage points at all levels of the sliding scale.
According to Bloomberg, the two Cabinet Ministers, who are attending the 25th Mining Indaba in Cape Town, South Africa, issued the contradictory positions in remarks captured in separate interviews reported by the network giant.
“We are ready to engage and listen to them, analyze their technical submissions, and if we are given compelling reasons, and if we see beyond reasonable doubts, we will make temporary rebates,” Musukwa told Bloomberg on the side-lines of the ongoing mining indaba.
According to Bloomberg, Musukwa noted that while government was holding firm on the controversial new tax law, there were positive discussions with companies including Glencore Plc’s Mopani Copper Mines and First Quantum Minerals Ltd.
“We can’t bring tax measures that are going to kill the golden goose that lays the eggs,” Bloomberg quoted the Minister as saying.
However, Mwanakatwe in a separate interview, insisted the 2019 mining fiscal policy was here to stay.
“There is no renegotiation taking place because a law has been passed in Parliament to change the tax regime. We don’t want to keep changing regimes frequently. We want a regime that is stable, that can ensure that government gets a fair share of revenue to support its development agenda. I can’t see the royalty tax changing,” Mwanakatwe said, Tuesday in Cape Town.
Meanwhile, in a separate development at the ongoing 25th African Mining Indaba, held at the Cape Town International Convention Centre, Musukwa disclosed that there are still huge tracts of land in Zambia awaiting to be exploited for mining investment once economic discoveries had been made.
He revealed this when he gave a presentation on Zambia’s mining investment opportunities.
Musukwa, who assured the audience that their investments would be safe in Zambia because of the conducive investment environment available, also emphasised that the Zambian government was committed to ensuring that the country’s mining resource benefited local communities in terms of development.
“Investment opportunities in Zambia, especially in the mining industry, are broad and partnership is required for us to continue to map our country. Already, our country is mapped in excess of about 60 per cent with the cooperation of our cooperating partners such as the Japanese government, the Chinese government and other stakeholders so we still have huge tracts of land, which hosts various minerals, and these minerals can be exploited once we have economic discoveries. But we need to ensure that these minerals are mapped and identified so that we are able to provide packages in terms of the exploitation programmes. So, we continue to do exploration of industrial and precious metals and much needs to be done in this area,” Musukwa, monitored via Smart Eagles, said.
“In conclusion, I would like to state that Zambia is stable jurisdiction offering vast investment opportunities ranging from exploration to value addition. Zambia is centrally located, making it easy to interface with various countries.”
When asked what government had done to ensure that local people also had a share in the mineral resource available to their communities, Musukwa said it was policy for every investor to partner with locals in their investment.
“What the trend now is to ensure that our investors must ensure that they provide partnership with our local people in order for the local people not only to be involved in the mining operations as workers, but as shareholders who also have a stake in the mining operations in order to ensure that mining operations change the economic landscape of our country in terms of development, especially to fight poverty and create and also create sustainable employment,” said Musukwa.