Zambia Chamber of Mines (ZCM) President Nathan Chishimba says Zambians have no capacity to run the mines.
And Chishimba says the power tariff impasse between Mopani Copper Mines and Copperbelt Energy Corporation must be resolved in a transparent manner.
Speaking when he featured on a Diamond TV talk show dubbed “Costa” last evening, Chishimba observed that running mines required millions of dollars which Zambians did not have.
“First of all, when you look at the function of how our economy is considered generally whether you go to banks or other companies, you will find that Zambians are not really able to participate at that level and it’s unfortunate. But I think we cannot say that it’s because of the rules that are stuck against Zambians. If you go to the Ministry of Mines you would find a lot of Zambians own either exploration property or some papers that show that they have a stake in mineral deposits somewhere to that effect but I think the underlying question is the capital. It takes almost a billion dollars to start a new mine and even when you start it, probably it will cost you a couple of millions a day to run,” Chishimba said.
“Now, this is why as a Chamber we are very focused on making sure that the mining investment climate is ripe because if we tend to assume a very negative attitude towards mines then we are also undermining the capacity of Zambians to go out there and raise that capital as they will be perceived to be from an investment environment that is hostile to mining so that’s why the Chamber of Mines always pushes for a favourable mining investment regime and not just for foreigners but everyone who invests in mining so that when a Zambian goes out there with a mineral deposit for the possible investment in mining, it will be seen favourably as a country which favours mining.”
Chishimba noted that foreign investors had improved the mining sector.
“I would say that the private sector has made a very big difference in the mining sector. First of all, they have injected over $15 billion in the last 12 years in the mining operations and they have been made to become world class mines because of private sector intervention. So if you are asking me to say has the private sector done anything for the mining sector? Yes it has revamped the mining sector and right now as we are talking, a third of our revenue is coming from private sector. I can also invite you to read the Extractive Industry Transparency Initiative (EITI) reports which are published every year and audited by certified auditors, there is actually a lot of money is that is actually overseen in this process. So we are very proud that we have managed to get the mines this far and this is all because of the private sector,” said Chishimba.
He said it was an illusion to think that foreign investors in the mining sector were stealing from Zambians.
“ZCCM owns an average of 15-20 per cent shareholding in all mining houses respectively so by that extension they are the largest shareholders and speaking strictly from a position of ownership, I think the perception out there which is that mining houses are just a person with a briefcase and a pick coming to dig minerals is very illusional because what happens is that these mining houses are incorporated with corporations that have shareholders, they have got pension funds and if you look at the structure of pension houses in Zambia now…I know there are pension houses in Zambia that have a longstanding participation in these offshore investment and you may never know some of these are in mining houses,” Chishimba said.
“So it’s very rudimentary to suggest that these mining houses are owned by foreigners, yes they are foreign incorporated companies but their share holding is very diverse and so I do not know why that perception to say the mines belong to foreigners who are coming to rob us. Investors are actually corporate bodies that follow rules of investment based on where they source the money.”
And Chishimba said he believed Mopani had a good reason for resisting the tariff adjustment by CEC.
“I cannot comment on that dispute between CEC and Mopani really but I think Mopani have their reasons for having approached the matter the way they did. From the Chamber’s perspective we feel that if the tariff setting system is transparent, if it’s efficient, if it shows a method that is very objective, there is no need for these disputes to arise but what causes these disputes is that on the one hand the supplier says one thing and on the other, the consumer perceives it as another. So I think as a Chamber our position is that we should arrive at a point where we settle this tariff issue in a manner that is transparent, objective and acceptable,” said Chishimba.