2023 National Budget measures will help to revitalise the mining industry, says Chamber of Mines
The Zambia Chamber of Mines has reacted positively to the 2023 National Budget announcement, calling it an encouraging move towards the re-establishment of Zambia as a key mining investment destination.
“The budget announcement shows that the Government clearly understands what investors need to commit to Zambia. Taken together, the Budget measures are likely to be viewed as an encouraging move, although we will know more once the details have been fully analysed and the attendant legislation is finally passed”, said Sokwani Chilembo, CEO of the Chamber of Mines.
The Chamber of Mines has long advocated for the dismantling of excessive unfavourable mining tax policies that were previously introduced, leading to a slowdown in mining investment inflows.
This announcement builds on the momentum sparked by initial steps taken in the 2022 budget, which ushered in a first wave of investments being announced this year, including First Quantum’s S3 expansion at Kansanshi, and the development of Enterprise, which will become Africa’s largest nickel mine when it is operational next year. Other announcements include the reopening of Chibuluma Mine, the imminent start of Moxico Resources’ new copper leach facility at Mimbula, and Kagem Mine’s production ramp-up, which includes further development of the Kamakanga resource.
Amending the mineral royalty tax to be calculated on an incremental or sliding scale basis will start to bring Zambia’s tax regime back in line with other mining countries, says the Chamber.
“We have long identified the royalties’ regime as a stumbling block for investment into Zambia. Not only are our rates higher than any of our competitors, but the regime operated in a way that deterred miners from producing at higher prices which was ultimately harmful for everyone. We are pleased to see the Government follow through on its promise to reform some of these impediments to growth”, said Mr Chilembo.
Similarly, the Chamber applauded the measures promoting exploration and artisanal mining as well as the establishment of a mining regulatory institution arguing that investors wanted to see a fully capacitated regulator that could manage its administration in a timely and effective manner.
“The measures announced will start to bring Zambia back in line with the rest of the mining world – we now have a case to market to the world’s investors. We all need to study the numbers, to see how these measures shift the effective tax rate and how that compares with our competitor jurisdictions. As the relevant bills go through the parliamentary process, our members and the global mining investment community will study the implications in detail. But we can confidently say that this has been a good day for Zambia’s mining industry and, by extension, for the country’s economic trajectory,” concluded Mr Chilembo. “When the mining sector succeeds, so does Zambia, and we look forward to seeing this new chapter in the country’s history unfold.”
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