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ZAMBIA CHAMBER OF MINES PRESIDENT’S SPEECH AT THE 9TH ZAMBIA INVESTMENT IN MINING AND ENERGY CONFERENCE 2019

THE HONOURABLE MINISTER OF MINES AND MINERALS DEVELOPMENT, MR. RICHARD MUSUKWA, MP, THE HONOURABLE MINISTER OF ENERGY MR. MATTHEW NKHUWA, MP, SENIOR GOVERNMENT OFFICIALS, DELEGATES, LADIES AND GENTLEMEN.
I MAY RESIDE AND WORK IN KITWE BUT HAVING GROWN UP IN LUSAKA, I BELIEVE I MAY HAVE THE RIGHT TO SAY WELCOME TO LUSAKA AND WELCOME TO THIS 9TH ZAMBIA INVESTMENT IN MINING AND ENERGY CONFERENCE 2019.
AME TRADE HAVE ONCE AGAIN PERFORMED A STERLING JOB TO PUT THIS CONFERENCE TOGETHER AS AN OPPORTUNITY TO SHOWCASE INVESTMENT OPPORTUNITIES IN MINING AND ENERGY IN ZAMBIA. CREDIT MUST GO TO AME TRADE FOR CONTINUING TO LEVERAGE THEIR OVER A DECADE EXPERIENCE IN ORGANISING EVENTS ACROSS AFRICA, THE MIDDLE EAST AND SOUTH AMERICA TO BRING TOGETHER KEY INDUSTRY PARTNERS TO SUCH A HIGH LEVEL EVENT. INDEED, WE ARE ALSO THANKFUL FOR THE EFFORTS OF THE KEY SPONSORS WHO MADE THIS EVENTS POSSIBLE – 12K ENERGY OF BOTSWANA, FIRST QUANTUM MINERALS LIMITED, VULCAN DRIVETECH AND PWC AS WELL AS THE NUMEROUS EXHIBITORS.
THE CHAMBER OF MINES OF ZAMBIA IS THRILLED TO BE PART OF THIS EVENT. THIS IS BECAUSE INVESTMENT PROMOTION IN MINING IS ONE OF THE KEY OBJECTIVES OF THE CHAMBER. INDEED, ACCORDING TO ARTICLE IV OF THE CONSTITUTION OF THE CHAMBER OF MINES, ONE OF ITS OBJECTIVES READS AS: ”…ENCOURAGING, PROTECTING AND FOSTERING THE MINING INDUSTRY OF ZAMBIA AND DOING EVERYTHING NECESSARY AND ADVISABLE FOR THE ADVANCEMENT/ACHIEVEMENT OF THOSE OBJECTIVES”.
ZAMBIA REMAINS AN IMPORTANT MINING DESTINATION. IT HOSTS 6% OF THE WORLD’S KNOWN COPPER RESERVES AMONGST OTHER MINERALS SUCH AS COBALT, ZINC, GOLD, COAL, NICKEL, LEAD AND OTHERS. THE COUNTRY IS AN INDUSTRY LEADER IN THE PRODUCTION OF EMERALDS, SINGLY RESPONSIBLE FOR 20% OF THE WORLD’S PRODUCTION. HOWEVER, MINING IS A CAPITAL INTENSIVE ENTERPRISE. THE INABILITY OF OUR ECONOMY TO GENERATE DEEP POOLS OF CAPITAL MEANS THAT WE ARE RELIANT ON FOREIGN DIRECT INVESTMENT TO ACTUALIZE THIS NATURAL RESOURCE WEALTH. A CONFERENCE SUCH AS THIS THEREFORE BECOMES ALL THE MORE IMPORTANT TO ATTRACT THE NECESSARY CAPITAL INFLOWS IN THE INDUSTRY.
IN 2018, THE INDUSTRY BEAT ITS PRODUCTION RECORDS PRODUCING OVER 860KT OF COPPER ON THE BACK OF STEADY POWER SUPPLY AND HIGHER COMMODITY PRICES. THIS INCREASE IN PRODUCTION ENABLES THE INDUSTRY TO INCREASE ITS CONTRIBUTION TO THE TREASURY. FOR INSTANCE, ACCORDING TO THE EXTRACTIVE INDUSTRY TRANSPARENCY INITIATIVE – A GLOBAL COALITION OF GOVERNMENTS, COMPANIES AND CIVIL SOCIETY GROUPS WORKING TOGETHER TO IMPROVE TRANSPARENCY AND ACCOUNTABILITY IN THE MANAGEMENT OF REVENUES FROM NATURAL RESOURCES – OF THE TOTAL SALES OF US$4BN THAT THE INDUSTRY GENERATED IN 2016, OVER US$1BN WAS CONTRIBUTED TO THE PUBLIC TREASURY THROUGH VARIOUS TAXES AND DIVIDEND PAYMENTS. NO DOUBT THIS FIGURE WILL BE HIGHER FOR 2017 AND 2018 ONCE THE EITI COMPILE THE FIGURES FOR THE TWO YEARS.
THE INDUSTRY HAS ALSO MADE FURTHER NOTE-WORTHY STRIDES IN THE PAST YEAR. LUBAMBE COPPER MINES’ DISCOVERY OF A HIGH GRADE ASSET ON WHAT IS NOW REGARDED AS THE OLD COPPERBELT SIGNALS AN UPSIDE FOR THE INDUSTRY. SIMILARLY, MOPANI IS ON THE CUSP OF COMPLETING ITS PROJECTS OF SINKING THREE NEW SHAFTS AND A NEW CONCENTRATOR, EXTENDING THE LIFE OF ITS MINES BY SEVERAL MORE DECADES. AN EXCEPTIONAL FEAT BY ANY STANDARDS. AWAY FROM THE COPPERBELT, THE NEWS OF CONSOLIDATED NICKEL MINE PLC’S REOPENING OF THE MUNALI NICKEL MINE IS A BOON FOR THE ECONOMY. THE REOPENING OF THIS MINE PARTICULARLY, SHOWS THE INDUSTRY’S POTENTIAL TO DIVERSIFY INTO MID-TIER OPERATIONS AWAY FROM TRADITIONAL COPPER.
HOWEVER, INSPITE OF THIS ENCOURAGING PERFORMANCE TREND IN 2018, THE INDUSTRY HAS SINCE BEEN FACED WITH A MINING TAX REGIME THAT LEAVES OUR MINING DESTINATION AS AN OUTLIER WITH HIGHER TAX RATES COMPARED TO PEER MINING JURISDICTIONS. HONOURABLE MINISTER OF MINES, WE CONTINUE TO RESPECTFULLY REQUEST THAT THE GOVERNMENT REVISITS THE PERNICIOUS MINING TAX REGIME, WHICH ONLY SERVES TO DETER INVESTMENT IN THE SECTOR. WE FURTHER REQUEST THAT SERIOUS CONSIDERATION BE GIVEN TO THE COUNTER-PROPOSALS ON MINING TAXATION, AS SUBMITTED BY THE CHAMBER OF MINES. AS A CHAMBER, WE REMAIN RESOLUTELY COMMITTED TO MEANINGFUL ENGAGEMENT WITH THE GOVERNMENT. AS PRESIDENT, I REMAIN QUIETLY OPTIMISTIC THAT THROUGH DIALOGUE WE SHALL BE ABLE TO FIND A BALANCE BETWEEN A TAX REGIME THAT ENCOURAGES INVESTMENT IN THE SECTOR ON THE ONE HAND BUT ONE THAT ALSO ENSURES THAT THE GOVERNMENT IS ABLE TO GENERATE SUFFICIENT RESOURCES FROM THE SECTOR TO FINANCE ITS DEVELOPMENTAL GOALS AND AGENDA.
IN TERMS OF ENERGY, ZAMBIA POSSESSES OVER 6,000 MW WORTH OF POTENTIAL FROM HYDROPOWER GENERATION YET OUT OF THIS ONLY APPROXIMATELY 2,800MW OF POTENTIAL HAS BEEN DEVELOPED AS INSTALLED CAPACITY. INCREASED ECONOMIC ACTIVITY IN THE COUNTRY AND THE REGION WILL RESULT IN INCREASED DEMAND FOR POWER, INCREASING FURTHER OPPORTUNITIES IN POWER GENERATION WITHIN THE COUNTRY. HONOURABLE MINISTER OF ENERGY, IT WILL BE IMPORTANT THAT THE COST OF SERVICE STUDY THAT HAS BEEN RE-LAUNCHED IS SUCCESSFULLY CONCLUDED, TO ENSURE THAT COST-REFLECTIVE TARIFFS ARE IN PLACE, TO ATTRACT FURTHER INVESTMENT IN THE SECTOR. WE ACKNOWLEDGE THE EFFORTS GOVERNMENT IS MAKING IN TRYING TO MAKE THE COUNTRY A NET EXPORTER OF POWER. A NUMBER OF PROJECTS ARE BEING UNDERTAKEN TO THIS END AND THESE INCLUDE THE 750 MW KAFUE GORGE LOWER HYDRO POWER STATION, UPGRADING OF THE LUSIWASI LOWER HYDRO POWER PROJECT,
AS WELL AS THE 2,400MW BATOKA HYDRO POWER PLANT. FURTHER REGULATORY REFORMS WILL BE NECESSARY TO ENCOURAGE MORE PRIVATE SECTOR PARTICATION IN ENERGY SECTOR.
A LOT OF THE THEMES I HAVE TOUCHED UPON IN OUTLINE WILL BE DISCUSSED AND DELIBERATED IN GREATER DETAIL IN THE PANEL DISCUSSION OVER THE COURSE OF THIS CONFERENCE. I CAN ONLY URGE YOU ALL TO HAVE ENGAGING, CANDID AND PROGRESSIVE DELIBERATIONS. IT WILL BE IMPORTANT THAT THIS CONFERENCE RESULTS IN MEANINGFUL OUTCOMES TO GIVE US TANGIBLE PLANS ON HOW TO CONVERT OUR RESOURCE WEALTH INTO FINANCIAL RESOURCES TO TACKLE THE MYRIAD AND URGENT DEVELOPMENT CHALLENGES THAT THE NATION FACES.
I THEREFORE WISH YOU ALL A SUCCESSFUL CONFERENCE! THANK YOU.

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