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Barrick hopeful of 2019 mining fiscal regime resolutionBy Stuart Lisulo on 17 Jul 2019
Barrick Gold Corporation president and chief executive officer Mark Bristow says the company is hopeful that a successful resolution will be found with the Zambian government on the 2019 mining fiscal regime.
And Bristow says Barrick feels encouraged that Zambia’s fiscal outlook may improve with newly-appointed Finance Minister Dr Bwalya Ng’andu.
Meanwhile, Bristow has refuted any assertions that Lumwana Mining Company will be sold amidst the turbulence that has rocked the mining sector.
Addressing journalists during a special presentation in Lusaka, Monday, Bristow said the mining giant remained hopeful a resolution could be found to the ongoing 2019 mining fiscal regime impasse, which saw mineral royalty rates raised by 1.5 percentage points across all levels of the sliding scale, among other punitive measures.
Asked if the company had received any indication that government was willing to amend the disputed fiscal regime ahead of next year’s national budget, Bristow said he remained hopeful of a solution being found to the satisfaction of both government and the mining industry in general.
“I believe we can say that our engagement has been constructive and intellectual. I think you’ve seen that we have engaged with government in a positive way. So, I am hopeful we’ll find a solution going forward,” Bristow told journalists at Taj Pamodzi Hotel.
He complained that Zambia’s mining fiscal regime had changed too frequently in the last 10 years, a development that hurt investment in the sector.
“Right now, Zambia has a challenge; it’s increasing the fiscal parameters. If you look back 16 years, I think there’s been 10 changes in the fiscalities in this country; that’s a very complex environment to be able to make long-term investments – when there’s a constant change and there’s no stability in the rules,” he observed.
He added that the Goods and Services Tax (GST), which had been pushed back for implementation after next month, was another cost the company was wary of.
“GST is just a cost so we have got to be very careful of how that is rolled out. One of the things we’ve got to do is we’ve got to say: ‘tomorrow, we might have a challenge. But what does it look in 3-4 years’ time.’ So, we need to lift our horizons because in the mining industry, it’s a long-term gain, not a short-term gain,” Bristow said, who also called for continuous engagement between government and the industry to find amicable solutions to resolve the pressing challenges.
And Bristow welcomed Dr Ng’andu’s appointment as the country’s new Finance Minister, taking over from Margaret Mwanakatwe.
“Our conversations with the government has been to say, you’ve got to recognise that they’re low grade copper mines and high grade copper mines, and you need both of them. So, you can’t have a ‘one size fits all.’ So, the fiscal framework needs to be able to recognize that. Otherwise, you will leave a large portion of your resource in the ground. So, intellectually, I believe we are at a point where it’s recognized that there’s a requirement to have that conversation,” he said.
“We are very encouraged by the appointment of the new Minister of Finance, who is a technocrat, and we hope that we will be able to engage with him.”
Meanwhile, Bristow dispelled any assertions that Lumwana Mining Company, Barrick’s subsidiary, would be sold amidst the ongoing turbulence rocking the mining sector
“Are we exiting tomorrow? Or do we have a plan to exit? No! We only have a plan to find the best way to bring Lumwana to account. Are we trying to sell Lumwana? No, not necessarily. Are we trying to bring Lumwana to account? The answer is absolutely, yes!” he said.
But when queried further if Barrick had been approached over a prospective outright sale, Bristow revealed approaches had been made.
“We’ve had a number of approaches, particularly driven by the fact that there’ve been tariffs put on concentrates coming in from the DRC (Democratic Republic of Congo). We’ve had high-level conversations with the government on how do we participate in this industry and their vision, and their view on how they would like to see the investment climate work out,” said Bristow.
About Stuart Lisulo
Stuart Lisulo is an experienced journalist with a focus on business news.
Email: stuart [at] diggers [dot] news
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