Zambia’s KCM suspends operations at its Nchanga mine following tax introductions

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Zambia’s Konkola Copper Mines (KCM) has suspended operations at its Nchanga mine. This is following the introduction of an import duty on copper concentrates.

Zambia, Africa’s second largest copper producer, introduced new mining duties, increased royalties and plans to replace Value Added Tax (VAT) with a sales tax by April. This is with a view to help bring down mounting debt.

According to media reports, KCM wrote to its employees suspending operations at the mine as of Jan. 4. The company low availability of acid as a result of rationalized operations at its Nchanga smelter. As such, operations at the smelter were downsized due to low availability of concentrates after the government introduced an import duty on concentrates.

In a statement released to press the company said that the introduction of 5% import duty on concentrates has made the smelting of imported concentrates commercially unworkable.  As such, KCM said it needed to import concentrates in order to meet smelter capacity and blending requirements.

In December last year, The Chamber of Mines advised mining companies to lay off over 21,000 workers as a result of reduced capital expenditure over the next three years due to the changes.

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