MINING companies operating in Zambia have increasingly become more desperate because they lack a robust stimulus package to continue functioning sustainably in the country’s deteriorating economy, the Chamber of Mines has warned.
And the Chamber has urged government to urgently engage the mining sector to forestall the negative impact that will arise on the health of the Zambian economy if measures are not immediately taken to address the issues facing the sector amid COVID-19.
In a statement released, Wednesday, the Zambia Chamber of Mines warned that mining companies were increasingly becoming more desperate due to the lack of a robust stimulus package to help them continue functioning sustainably in the country’s deteriorating economy.
The Chamber argued that the Ministry of Finance’s tax relief measures announced both last and this month were only just the first step in a broad-ranging robust stimulus package, and that more ought to be done to provide much-needed relief if the mining industry will survive the devastating impact of the Coronavirus pandemic.
Copper prices on the international market have fluctuated between US $4,600 and US $5,000 per tonne in the last one month in line with reduced demand for the red metal in China, the world’s top consumer.
“Tax relief measures announced by the Minister of Finance (Dr Bwalya Ng’andu) on March 27, such as the removal of the provisions of Statutory Instrument (SI) 90 and the suspension of import duties on concentrates and export duties on precious metals, were a welcome first step in the broader relief package, which is needed, however even these initial measures are yet to be introduced. In the time that has elapsed since the initial submissions and the 27th March announcements, the industry’s circumstances have become more desperate. The issues being faced at Mopani Copper Mines are but an example of this distress,” read the statement availed by the Chamber’s deputy chief executive officer, Talent Ng’andwe.
“As Zambia, with other countries, globally, grapples with the debilitating and public health danger of the COVID 19 virus, the mining industry in Zambia recognizes the catastrophic nature of the public health crisis as well as the untold harm this virus will wreak on the Zambian economy. Several mining companies have rushed to government’s aid to demonstrate their solidarity with the government and people of Zambia through various interventions. This is in recognition of the urgency and need to stand shoulder-to-shoulder with our host communities at this very trying time of need.”
And the Chamber urged the government to urgently engage the mining sector to mitigate the negative impact COVID-19 would have on the industry.
“The Zambia Chamber of Mines has urged government to urgently engage with the sector in order to forestall the negative impact that will arise on the health of the Zambian economy if measures are not taken immediately to address the issues facing the mining sector in the midst of COVID-19,” stated the Chamber.
“Over three weeks ago, the Chamber of Mines submitted a broad three-phase economic plan to government to urgently manage the economic impacts arising from the pandemic. This was with a view to providing some guidance to government on the critical areas to be urgently addressed. This proposal included, firstly, immediate relief measures that could be implemented by government in a matter of days, followed by an emergency support package for which financial support could be sought from the IMF and World Bank, and lastly, a ‘fight back’ fiscal regime to be implemented once the COVID-19 pandemic has abated and investment is needed from which to rebuild the economy. Since then, all mining industry stakeholders have been hoping that some significant stimulus measures would be instituted, as is being seen across the world.”