Copper production is likely to increase due to the creation of new mines across the country, says Mines and Minerals Development Permanent Secretary Barnaby Mulenga.

And Mulenga says government’s response to all challenging tax matters such as the withdrawal of Sales Tax is likely to have a positive impact on copper mining production.

In an interview in Lusaka, Mulenga explained that the creation of new mines had provided a lot of hope in the sector that copper production was set to increase this year and beyond.

Zambia recorded a marginal increase in its copper production in 2018 to around 861,946 metric tonnes from 799,329 tonnes recorded in 2017, mainly boosted by First Quantum Minerals’ (FQM) operations in Kalumbila District.

“In 2020, we are expecting that the production should be higher because of some of the new mines that are coming on board. I think it is important to actually contextualize the issue of people’s interests because from where we sit, they are able to see these new mines coming up whether it is in Ndola; then we also have North-Western Province mines coming up,” Mulenga said.

“The picture is not gloomy as it is sometimes painted; we have new companies investing in this sector. We also have a situation where the production has technically moved in terms of high production form the Copperbelt to North-Western Province. You will be interested to know that, just last year, about 70 per cent of the production of copper came from North-Western Province that is why people are writing, saying, it is ‘the new Copperbelt.’ Remember, some of the mines on the Copperbelt, in terms of their mining cycle, has gone past their prime. So, some of them, it’s a case of unless they do new exploration, that is when they can like find a new resource for them to mine. But we are seeing completely new green field projects that, in this case, are offering a lot of hope.”

And Mulenga said government’s response to the general fiscal regime was also likely to increase copper production.

In addition to withdrawing the controversial Sales Tax last year, government equally suspended the 15 per cent export duty on precious stones.

According to Statutory Instrument No. 82 of 2019, government suspended the Customs and Excise (Precious Stones) Export Duty Order with effect from January 1, 2020.

“If you have noticed, in terms of the taxation, government has been able to respond. The first response was the suspension of that issue of Sales Tax. But there are also other sectors like the precious minerals; you aware that the tax was removed on emeralds, so, government has responded positively to a number of concerns from players in the mining sector,” he said

Meanwhile, Mulenga said he was also optimistic that ZCCM-IH would improve on its profitability in forthcoming financial years.

ZCCM-IH’s profit after tax at group-level during its financial year ending March 31, 2019, dropped to K448 million, compared to K843 million in the previous corresponding period in 2018, mainly induced by reduced dividends paid by Kansanshi, lower income from KCM and increased losses incurred at subsidiaries Investrust Bank Plc and Ndola Lime Cement Company.

“Firstly, in terms of the strategic focus, ZCCM-IH has changed and what we will see there is a much different (outcome) in 2020. It used to be a holding company, so being a holding company; they were at the mercy of the performance of those other sectors. For example, if KCM doesn’t do well, meaning no dividends are declared; when Kansanshi doesn’t do well, no proper dividends are declared; that kind of situation,” said Mulenga.

“But when now it goes into actual mining, which now they have done, you should actually be able to see it recover. I always believe that, yes there are some of those players, the CEO (Mabvuto Chipata) indicated (during the media briefing last week) that there are turn-around structures for the likes of Ndola Lime and one or two others that didn’t perform as well. In terms of them focusing into 2020, honestly, they will do quite well. That company they have incorporated, ZCCM Gold Company, we expect that to actually do well; KCM should also come on board when the matters are resolved. We expect that 2020 should be brighter than the way 2019 was.”