KCM attributes financial challenges to govt’s failure to refund VAT

Konkola Copper Mines (KCM) chief executive officer Deshnee Naidoo says delayed payments to workers has mainly been because of governments delayed release of Value Added Tax (VAT) refunds owed to the mining company.

In a statement issued by KCM corporate affairs general manager Eugene Chungu, Naidoo stated that the mining firm had faced severe challenges paying its staff, among other creditors, owing to delayed release of VAT refunds owed back to company.

She, however, added that KCM officials had since engaged Ministry of Mines Permanent Secretary Paul Chanda to find solutions and address the problem.

“Konkola Copper Mines (KCM) confirms the payment delays that are currently being experienced by its suppliers and is aware of the impact these delayed payments have on their businesses and dependents. KCM is engaging with all its suppliers and business partners through a structured plan to resolving these delays. KCM CEO Deshnee Naidoo said: “A significant factor in KCM’s current cash squeeze is the fact that VAT refunds due to KCM have been delayed by several months. Working capital is an important driver in achieving production targets, particularly in mining, which is a low margin-high capital business. We are proactively engaging with the Ministry of Finance to expedite these payments, and we have fully briefed the Permanent Secretary of Mines and Minerals Development. We know these Ministries are fully aware of the continued delays, and have indicated their support in resolving the matter,” read the statement.

“Ms Naidoo added that, “KCM continues to pay suppliers every month, and every effort is being made to make up for delayed payments within the shortest possible time. There are over 500 micro, small and medium-scale local suppliers actively participating in business with KCM. We are grateful for their support and patience. The company holds quarterly meetings with supplier representatives namely; the Association of Mine Suppliers and Chambers of Commerce of Chingola and Kitwe. KCM has also arranged a series of meetings with all suppliers next week to discuss, among other things, the plans with respect to repayments.”

         

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