Stability in Mining Policy
26th September 2018
Issued by the Chamber of Mines
The Zambia Chamber of Mines has reiterated its call for stability in mining policy.
Chamber of mines President, Nathan Chishimba says from current indications, Zambia can grow the sector to produce 1million tons of Copper per annum and then further upward to 1.5million tons per annum which is double the 1972 pre-nationalization production levels, within the next six years. Growth is the most sustainable and inclusive means to meet the expectations of all stakeholders over time via measurable progress and increasing tax contribution to the government.
With continued stability and a focus on growth, Zambia will easily attract exploration capital to extend the copper mining industry’s life beyond the twenty years of present proven bankable reserves of 20 million tons. By attracting exploration capital, we can increase our proven reserves by over a million tons per year as we did from 1996 to 2005 and once again add decades to the industry lifespan. The other thing industry seeks is the removal of capping of carry forward loss tenure to ten years and the limiting to below 100 per cent of capital allowance claims for equipment and mine building expenditure in a year. This will shorten the break-even period for mining expansion and new projects thereby making the Copperbelt and Northwestern provinces more attractive to mining company managers, institutional shareholders and financiers than it is presently.
“We are confident that stability in the fiscal and regulatory regime for mining complimented with a few more non-cash actions such as restoring working capital tied up in Value Added Tax refunds by offsetting against dues going forward will go a long way in positioning the Zambian mining industry for double digit growth,” Mr Chishimba said.
As a further means of enhancing Zambian ownership in the mining sector, we have also proposed that the State takes measures to encourage Zambians and Zambian institutions to invest in exploration by offering them tax rebates when they buy shares in such projects. We believe this will offer a bright future along the lines that our neighbour Botswana has enjoyed over their last 40 years of policy stability in their mining sector.
As a key sector that represents Zambia’s comparative advantage in the global economy, Zambian mining must be seen to be a world beater in creating economic advantage and prosperity for Zambia. This prosperity manifests itself in various forms, including the attractiveness of investment for the national economy and creation of opportunities in manufacturing, trading, communications and other commercial activity. Zambia has seen a lot of evidence of this growth, which has in recent years spread to various parts of the country.
The Chamber President added that, it is an undeniable fact that when mining does well, other economic fundamentals do well, and thus the opportunities in the Zambian economy expand.
The Zambia Chamber of Mines has committed itself to a principle of constructive engagement with the Government of Zambia to ensure that mining is carried on in a responsible and sustainable manner at all levels, whether by foreign or local investors. We believe this is the basis on which a very healthy level of mutual trust and confidence has been cultivated, that has seen some relative stability in the regulatory environment for mining in Zambia in recent years. It is the Chamber’s conviction that this recent stability positions Zambia as one of the primary destinations for much needed investment in operations and development of new projects, which will not only expand the sector in Zambia, but create more opportunities to expand revenue for the treasury and economic opportunity in other industries.
Going forward, it is our conviction that Zambia should move with the times and take a bold grasp of the unique opportunity we have to create a sustainable and inclusive future for our mining industry. We can ill-afford to resort to “Father Christmas type”, fanciful, unresearched, archaic commentary that have had ruinous effects on our economy and the people of Zambia in the past.