MINES and Mineral Resources Minister Richard Musukwa says government is putting in place measures to provide relief for the mining industry but has warned mining companies not to take advantage of the current circumstances amidst the Coronavirus pandemic.
Earlier this week, the Centre for Trade Policy and Development (CTPD) called on government to consider increasing capital allowances to 100 per cent, among other fiscal measures to be applied, to sustain production levels of mining houses while many countries in the world are battling the Coronavirus outbreak.
Copper prices on the international market have equally slumped from US $6,165 in January, 2020, to US $4,776 per tonne last month, thereby putting a lot of financial stress on the Zambian mining industry and the wider economy.
But Minister of Finance Dr Bwalya Ng’andu last Friday announced measures, such as the suspension of import duty on concentrates and export duty on precious metals, to offer relief to the mining industry in the country.
In an interview, Musukwa, however, warned mining companies against raising any issues that were non-factors under normal circumstances as government’s new measures were meant to save the sector from total collapse.
“Government has moved to ensure we protect the industry from total collapse and putting in measures for survival mode is what we have done and we are studying the issue and consulting with stakeholders and mining houses and seeing how best we can continue to provide relief for the industry. We are studying the matter. What we require is that our colleagues, the mining houses, must not take advantage of this unfortunate circumstance to bring issues which, under normal circumstances, are non-factors. What we know is that all credible issues that we need to discuss in order to ensure that mine operations are sustained, government is open to dialogue. The measures that we have put in place were measures that government acted on its own to ensure that we save the mines from total collapse,” said Musukwa.
However, in the wake of Dr Bwalya’s measures, Zambia Chamber of Mines president Goodwell Mateyo had cautioned that some mining companies in the country faced the prospect of being placed under care and maintenance amidst the escalating high-cost of operations, combined with continued uncertainty, triggered by low copper prices on the international market.
According to Mateyo, low copper prices and the spread of COVID-19 will cripple the mining sector, forcing some operations to be placed under care and maintenance.
He, therefore, called on government to provide mining companies a stimulus package as a means of alleviating some of the high cost of operations if mining companies were to remain viable.