First Quantum Minerals Ltd, Canadian-based mining and metals company has disclosed US $850million paid in taxes, royalties, duties and fees to the Zambian government.
The figures were disclosed through FQM’s annual Tax Transparency and Contributions to Government Report. The contribution paid to Zambia represents 78% of the entire contribution FQM paid globally. The company also has operations in Australia, Finland, Mauritania, Panama, Spain and Turkey, as well as exploration prospects in a number of other countries.
Originally published to comply with the Canadian government’s Extractive Sector Transparency Measures Act (ESTMA), which requires the reporting of profit taxes and royalties paid in specific countries of operation, the FQM report now goes far further than Canadian law requires.
Highest annual copper production
The publicly available report lays bare the full, direct fiscal and economic contribution of the mining giant to each of its host governments. Despite the additional challenges faced in 2020, FQM achieved its highest ever annual copper production, which was reflected in the increased amount of its contributions to Zambia’s public finances.
The report shows that FQM paid approximately US$209.5 million in mineral royalties ($195.8 million, 2019), and a further US $202.8 million in company income tax in Zambia during 2020 (US $176.2 million, 2019).
As part of the company’s voluntary disclosures, the report reveals that US $6.5 million was spent on community projects, and infrastructure support during 2020. In addition to its regular community programmes, the Company provided Covid-19 testing equipment, personal protective equipment (PPE), and treatment and isolation facilities for the surrounding communities in North-Western Province, including a new ICU and high dependency care unit at Solwezi General Hospital.
Extractives Sector Transparency Measures Act
FQM Country Manager General Kingsley Chinkuli said the mining company prided itself on always going above any beyond the requirements set by law.
“By disclosing our contributions in all forms – taxes and duties, royalties and other contributions paid to our host countries – we are doing our bit to foster good governance. We also appreciate that mining companies, that are accessing a non-renewable national resource, need to be fully transparent about their finances. Read together with our published financial statements and production information, this data offers a clear line of sight into the workings of each of our operations, and the group as a whole. It all constitutes an open book approach, so there can be no confusion as to what is mined where, and what taxes are paid on it,” said General Chinkuli.
The Extractives Sector Transparency Measures Act (ESTMA) has since 2015 required Canadian-listed natural resources companies to publicly disclose tax payments made to foreign and domestic governments.
The Act illustrates the benefit to countries like Zambia of having responsible investors, listed in jurisdictions with a strong rule of law, that insist upon strong corporate governance and compliance with international standards.