Chamber of Mines slams sensationalist misrepresentation in commentary on FQM & ZCCM-IH agreement
Point scoring behaviour by pundits is wilfully misrepresenting the benefits and history of a deal that will be good for the mining industry and good for the country, according to Sokwani Chilembo, CEO of the Zambia Chamber of Mines.
The negotiations between ZCCM-IH and First Quantum to provide ZCCM-IH with royalty income from Kansanshi mine have been ongoing for the past three years and were initiated by the previous administration. ZCCM-IH’s 2020-2026 Strategic Plan, which sets out the investment company’s intention to secure royalty revenue streams from its investment portfolio, was likewise devised during the tenure of the previous administration, received shareholder support, and has been in the public domain for years.
“Given this, one could have expected to see a broad apolitical support for this announcement, rather than the barrage of attacks we have seen in the media. So, this shocked outrage is misplaced, and being mostly fuelled from quarters that were privy to the historical background of the negotiations”, said Mr. Chilembo.
The agreement that FQM and ZCCM-IH have entered into calls a halt to the tit-for-tat legal disputes between government and its main mining investor, that have caused great reputational damage, and come at a great cost for both parties in time, money and effort.
“Now the partners in Kansanshi can get back to the business of mining, and delivering upon the very positive and long-awaited development of the s3 expansion at the mine. This cessation of hostilities is extremely important for our optics in the global landscape and will be a comfort to other potential investors – because make no mistake, we need many, many more investors if we are to realise the objective of delivering anything like 3 million tonnes of copper a year”, continued Mr. Chilembo.
According to the Chamber of Mines, the 3.1% revenue-based royalty secured by ZCCM-IH in its negotiations is at the top end of the range normally seen for this type of arrangement.
“This is a good deal for ZCCM-IH, when you look at the international comparisons. They have secured a regular, consistent source of income from Kansanshi which will allow them to deliver on their strategy of becoming a real player in Zambia’s mining industry, throughout the mining value chain – and that is what ordinary Zambians need to see. It’s time we stop misrepresenting the facts, otherwise our opinions – and the quality of our public debate – will be detached from reality. We must start getting behind the industry as an engine for national development, rather than just scoring points for points sake”, concluded Mr Chilembo.