Zambia threatens non-transparent mining firms
from RUDOLF KAPAMBWE in Ndola, Zambia
NDOLA – THE Zambian Government insisted it would punish mining companies whose operations were shrouded in controversy.
Subsequently, the government announced plans to extend forensic audits to all mining companies in the country to ensure their operations were transparent.
Addressing Parliament recently in Lusaka, the Mines, Energy and Water Development Minister, Christopher Yaluma, said the process had become necessary in the wake of wake of a forensic audit at one of the country’s biggest copper mines following indications of alleged mismanagement by foreign-based shareholders.
He said government had to intervene to avoid a recurrence of such conduct.
“Government shall penalise any fraudulent mining company to prevent loss of the much-needed revenue and save jobs.
“Government will be undertaking regular audits at all the mines to ensure compliance and avoid the recurrence of the situation,” Yaluma told legislators.
Yaluma told the legislators improper conduct by mining companies could deter investors.
This could also have a negative impact on the investment environment in Zambia,” the Minister said.
He nonetheless allayed fears Zambia would nationalise some mines in an effort to ensure they complied.
Such action, he said would equally deter investors.
Yaluma added nationalisation would be contrary to government policy to endure the private sector drove the economy.
Meanwhile, Yaluma said the government would only refund copper mining companies if they complied with directives government had set.
The mining firms have been ordered to they produce such documents as import certificates from destination markets.
The government is holding back more than $600 million in value added tax (VAT) refunds owed to a number of the copper mining companies.
Among the companies that have reportedly been affected by the move include Vedanta Resources, Barrick Gold and Glencore Xstrata.
“That money is owed and we will have to pay as long as they fulfil the requirement.
“It was slightly more than $600m as at the end of May,” Yaluma recently told media on the sidelines of a just-ended mining conference in the capital city.
In 2008, Zambia started requesting the mining companies to provide with foreign country import certificates in a move it said was aimed at curbing tax evasion.
The move has largely not been received well in the industry with the companies arguing such was difficult as most of them were selling their copper through middlemen.
Yaluma remained upbeat the companies would be able to fulfil the requirements by government.
Copper mining is the backbone of the Zambian economy.
The country is widely rated as the biggest producer of the mineral and the eight in the world.
The future of the copper industry in Zambia has previously been thrown into doubt.
In the beginning of 2012 some investors in Zambia’s largest copper mine, Konkola Copper Mine (KCM) announced their intention to withdraw their investment.
However, attractive copper prices from 2004 to the present day rapidly rekindled international interest in the Southern African country’s copper sector.
China has become a major investor in the industry.
Currently, copper mining is central to the economic prospects for Zambia and covers 85 percent of all the country’s exports, but concerns remain that the economy is not diversified enough to cope with a collapse in international copper prices.
– CAJ News
Short URL: http://cajnewsafrica.com/?p=274