In a statement jointly-issued by Ministry of Finance spokesperson Chileshe Kandeta and KCM’s general manager for corporate affairs Eugene Chungu, Tuesday, KCM announced no job cuts would happen following the 2019 mining fiscal regime.
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.
It also introduced import duties of five per cent on copper and cobalt, while also hiking export duty on precious stones and gemstones to a rate of 15 per cent, a situation that had prompted mining companies to threaten job cuts, while compelling KCM to downsize its Nchanga Smelter operations due to low availability of concentrates.
But KCM acting chief executive officer Venkatesan Giridhar informed a high-level government delegation during a consultative meeting in Lusaka, which included Ministry of Finance, Mines and Labour officials, that the Vedanta-owned mining firm will not be effecting any job cuts at any of its operations on the Copperbelt.
“I wish to confirm, therefore, that THERE WILL BE NO LOSS OF JOBS AT OUR SITES as a result of the new tax regime,” Giridhar announced, when he presented a paper on the impact of the 2019 mining fiscal regime on KCM mining operations and its future undertakings at the Ministry of Finance in Lusaka.
“As KCM, we undertake to constructively engage key stakeholders, such as the government, trade unions, the media, local communities, and our shareholders, in a respectful manner to ensure that we contribute to the growth of the economy on a sustained basis.”
And Giridhar emphasised that KCM was renewing its focus on Konkola Deep Mine in Chililabombwe and would ensure further investment in the short to medium-term, according to the statement.
“…Our actions are designed to sustain and create jobs, grow the economy, and contribute more to the country’s treasury while effectively implementing our asset and liability management programme,” read the statement.
Meanwhile, Finance Minister Margaret Mwanakatwe hailed KCM for choosing
the path of dialogue and for the proactive approach in reviewing mine operations and sustaining job creation, among others.
She also insisted that the impending Sales Tax will soon come into effect as planned.
“Let us walk the journey together so that by April 1, 2019, we can implement the Goods and Services Tax (GST),” stated Mwanakatwe, adding that the GST will be a hybrid of Value Added Tax and Sales Tax, with all the attendant incentives and exemptions for manufacturers, exporters, and other eligible sectors of the economy.
Other pressing matters covered in the consultative and information exchange
meeting were KCM smelter business strategy, the deficit of concentrates in the country, among others.