MINES and Minerals Development Minister Paul Kabuswe says government had to clear out former KCM provisional liquidator Milingo Lungu in order to begin unlocking the mine.
And Kabuswe says government is not full of rhetoric, but one which is serious about what it is doing and very soon, huge announcements will be made.
Speaking on ZNBC’s Government Forum programme, Tuesday, Kabuswe reiterated that government was committed to ensuring it resolved issues surrounding mines which had pending court cases.
“That’s why we want to unlock them. If you heard His Excellency the President said Mopani is very near, the investment in Kansanshi is very near. So all these, it’s unlocking. It is not something that will happen in the next two years, within this year you will hear announcements around these assets. KCM as well, we are also sorting it out and that’s why there were issues of clearing out the provisional liquidator so that we begin to unlock that asset, it is critical. KCM and Mopani has enough deposit to last beyond our grandchildren,” he said.
“Today I was shocked. I was reading somewhere somebody was saying if we are not careful, the Copperbelt is going to become a ghost province. That is a queer understanding of what is happening. The Copperbelt still is a very big future, big component of the mining industry in Zambia. I want to assure the people of the Copperbelt, very soon the Copperbelt will begin dancing, very soon they will be enough activities on the Copperbelt. I am a creature of the mining sector and I don’t like the depression I’m seeing in Chililabombwe, in Chingola, in Mufulira in Kalulushi. I don’t like it.”
Kabuswe insisted that most mines were not operating because of court issues surrounding them.
“I have always said that when we took over, we found the mining sector in court. Now you cannot mine in court. Why am I saying the mining is in court? It was shrouded in a lot of controversy. We have the issue of KCM which we are still grappling with, the Glenco agreement on Mopani, it’s more or less the matter is in court, we had issues at ZCCM-IH and Kansanshi in court. We had a lot of mining licenses, people taking each other to court. You just can’t mine in court,” he said.
“If you are to talk about the brown fields mines today, the only one that you can say okay we check whether it is declaring, right or wrong, right now is Kansanshi. Right now, Kansanshi believe it or not, has been posting a profit and it has been paying dividends to the government. Mopani is in problems, KCM is in problems. You can see that most of these big mines were in court, and were in confusion. What we want to do right now is to unlock them. So it was only Kansanshi and it was posting profits and paying its fair share of dividends to the government.”
And Kabuswe said his government was not a rhetoric government.
“This is not a government of rhetoric, this is a government that is serious about what it is doing. Right now, it looks as though nothing is cooking but watch the space. A little patience, you are going to see how we are going to be making these huge announcements. Not just announcements to please the ears of Zambians, announcements that will translate into tangible results for the economy and Zambia will be different,” he said.
He insisted that various investors were jostling to invest in the country.
“People are jostling to come and invest in this country. The environment has already been created by the messaging from the coach, the top leader, the President. Now they have seen that Zambia is a business friendly environment, let’s rush there and invest. The only thing that we are supposed to do is to get it right and we will get it right in terms of how the country benefits from this boom. We are sitting around the table. Zambia’s wealth sometimes is lost on the negotiating table. The issues of corruption are quite serious. Sometimes on the negotiating table, people eat with both hands and they lose it. We are emphasizing integrity, we are emphasizing a corrupt free society so that when we negotiate with whoever is coming to invest in the country, it’s a win-win situation. We have to do proper negotiation so that we are not just told that now I’ve invested US$60 billion in Zambia yet the poverty is all over,” he said.
Kabuswe said government was convinced that its stance on Mineral Royalty tax would attract investment.
“I always say that if you want to get something different, you can’t do the same things you were doing. You have to do something different for you to find a different result. So this government said okay, Mineral Royalty Tax was treated this way, we are going to treat it this way. We are confident that that decision is going to bring about some of the confidence that is needed in the mining space so that we attract more investments, there is more activity in the sector which means more money, more jobs for contractors and suppliers,” he said.
“We have not removed the Mineral Royalty tax. The mineral royalty tax is there. When you go to any mine and you are the owner of the mine. The moment you mine out a kg, it attracts mineral royalty. That is a payment you have to pay whether you have made a profit or not. That is what you pay. Apart from that, you are going to pay income tax which is the tax you pay on profit. So what we are saying as the new dawn is that this royalty that you pay when you just started mining, when calculating your profits, you treat it as an expense. In other words, deduct it from your turn over so that you can calculate your profits which the government will now tax.”
He said there was confusion among investors in the previous regime because of frequent changes in tax policies.
“When people are investing, you cannot have a scenario where in five years, you change tax policies 10 times, meaning each year twice or thrice or even four times. That is what was happening. Now you create confusion to the investors. You need to have a predictable space, time where now you say now here you are, this is your environment. In the next two, three, four, five years, this is a predictable environment, this is a stable environment, peaceful environment. Go out there and mine and make profits,” said Kabuswe.