14th October 2015-The Zambia Chamber of Mines welcomes recent efforts by the government to work collaboratively with the mining industry in addressing the current challenges revolving around recent events in the industry, namely suspension of operations, job losses and the energy deficit. The Chamber acknowledges the importance of jointly owning all efforts with government to ensure that current challenges are overcome, if not eliminated in the not too distant future. It is very clear that without such joint ownership, the task of redressing these challenges will be made even more difficult.
The current state of the mining sector in Zambia is grave, if not perilous, and it calls for urgent attention in order to sustain existing operations and avert continuation of the current spate of suspensions and loss of jobs. In this context, the Chamber views the focus on mining in the recently announced 2016 national budget as generally inadequate and at odds with the need to apply urgent and decisive restorative measures to the industry.
In the current environment, the mining industry is faced with a global downturn that draws ominous parallels with the trend last seen in 2008, when prices of commodities on the international markets experienced a severe downturn. In the last few years, the industry has faced a general upward creep in the cost of operating in Zambia due to escalating costs of inputs, labour and various taxation measures, among other things. In the normal course of business, this has represented a challenge. In a period of declining commodity prices, this challenge represents a considerable obstacle to the viability of several operations in the country, as is currently being experienced.
The Chamber reiterates its support for constructive, effective and urgent dialogue with the government and other partners to resolve the current state of the industry in Zambia. We fully support the ongoing effort by the government of Zambia to engage with the mining operations in Zambia to achieve this, and we remain committed to the process started by government to discuss urgent solutions to avert the ongoing crisis, which if not managed resolutely and urgently will result in continued job losses and loss of business within the mining sector and related industries.
The Chamber looks forward to working with the government of Zambia and ministries that have been tasked to address the various challenges facing the industry in a decisive and inclusive manner.
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The Zambia Chamber of Mines has reviewed the 2015 National Budget and its position is that the new mining tax regime is entirely unsustainable. Our sincere appeal to the Government is that, this industry needs to be nurtured so that it continues to generate revenues required to diverse our economy and continue to progress on the path of increasing mining and manufacturing production to sustain and continue to create jobs. The Zambian Mining Industry will continue to be the Engine of the Zambian economy for a long time to come. We strongly advise Government to reverse its decision.
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