The Mining Industry is ready to invest US$2.5Billion in mine expansion and a further $439Million in capital expenditure if adjustments are made to the current mining regime.
Government recently held a mining indaba to address issues bordering on mining taxation.
Zambia Chamber of Mines President Dr Godwin Beene, says the unfavorable mineral royalty tax has continued in holding up In excess of US$2.5Billion of fresh capital from international financial institutions for expansion out of reach for most mines because of high mineral royalty regime at 10%.
Dr Beene suggests adjusting the calculation of mineral royalty tax to a pay as you earn (PAYE) sliding scale, instead of the current stepped up scale, as it is the solution to unblocking investments in the industry.
He also recommends allowing deductibility of mineral royalty as an expense to improve returns and make third party capital affordable.
Dr Beene said this should be coupled with investment in exploration to find new deposits and increase the lifespan of the industry which is at the most, less than 30years.
He sees a simultaneous building of new mines once adjustments are made to the mining tax regime to promote stable growth and build diversity in the economy.
Dr Beene observed that diversification in mining and other sectors has been suboptimal in the past because it has been viewed as a parallel growth process to that of existing mining.
He said that has shown that most real growth in the economy is corollary to growth in the existing mining.
On copper production, in the first quarter of this year, the Chamber says the local output was as of April at 253,216tonnes, according to the Ministry of Mines and Minerals Development.
This was down by 2.53% in April 2020 which was at 259,586 tonnes.
The industry continues to be caught flat footed by the good copper prices as it is unable to take advantage by significantly ramping up production, Dr Beene said.