The Zambia Chamber of Mines (ZCM) is currently holding out hope that the forthcoming 2020 national budget will help restore the mining sector’s productivity and return Zambia to its previous position as one of the world’s leading copper producers.
Furthermore, the Chamber has reiterated that Zambia is set to record lower copper production output this year by at least 100,000 metric tonnes, triggered mainly by the unchanged 2019 mining fiscal regime.
In a statement released earlier on this week, the Zambia Chamber of Mines chief executive officer Sokwani Chilembo stated that the Chamber hoped that its submissions ahead of next year’s budget would be given serious consideration to help restore the mining sector’s productivity.
According to the statement, the Chamber already submitted detailed mining tax proposals. These proposals aim to resuscitate the Zambian mining sector by putting in place competitive, stable and investor-friendly measures.
Some of the measures contained in the Chamber’s submission include a ‘true’ mineral royalty sliding scale as opposed to the present stepped scale capped at 7.5%; restoration of deductibility of the mineral royalty against corporate tax and the removal of concentrate import duties, among others.
Chilembo explained that the Chamber hopes the full submission will receive rigorous consideration to secure an outcome that will result in production growth to over 1m tonnes in five years and increase mining tax receipts by around a fifth. The revenue increase will be even higher if policy is adjusted enough to motivate operationalization of just one or two of the promising large mining prospects in the country.
Zambia recorded a marginal increase in its copper production last year to around 861,946 tonnes from 799,329 tonnes recorded in 2017, boosted by First Quantum Minerals’ (FQM) operations in Kalumbila District. However, from January 1, 2019, government effected the 2019 mining fiscal regime, which caused turbulence with some mining houses recording lower copper output.
Ministry of Mines data revealed that while copper output for the first three months of this year was higher than last year, production slumped and drastically lagged behind in April, May and June, closing the 2019 half-year period with 355,751 metric tonnes from 408,919.01 tonnes recorded in the corresponding period last year.