A new Zambian law compelling mining companies and other bulk cargo firms to transport at least 30 percent of their freight by rail is “economically inappropriate and unworkable” and should be reviewed, the Chamber of Mines said on Wednesday.
Transport Minister Brian Mushimba said on Friday the law was meant to revive the rail sector and also to reduce the cost of doing business because railway transport was cheaper than road haulage.
But the Chamber of Mines in Africa’s second-largest copper producer said the rail infrastructure in the country’s copper belt was in poor repair, lacked capacity and adequate security provision.
“Insufficient infrastructure exists to make this piece of legislation workable without imposing punitive costs onto Zambia’s principal means of generating revenue. It is economically inappropriate and unworkable,” the chamber said in a statement.
“The Chamber calls for a review of this (legislation) and allow for more considered analysis of the effect on business and the national economy.”
The government had said it agreed the new policy with the chamber and individual mining firms, but the chamber said the industry’s position had been “ignored or rather unsatisfactory”.
Zambia’s railways currently have a market share of about five percent, with the remainder handled by road transport, Mushimba said.
(REUTERS: Reporting by Chris Mfula; Writing by Olivia Kumwenda-Mtambo, editing by David Evans)