Mining firms in Zambia hail parliament for passing law on tax changes

Mining firms in Zambia on Tuesday commended the country's parliament for passing a new law that brings changes to the mining tax regime.

Last Friday, the parliament passed changes to the 2015 Mines and Minerals Development Act which has, among other things included a sliding mineral royalty that varies depending on the prevailing copper prices.

The royalty would be four percent when the price of copper was below 4,500 U.S dollars a ton, five percent when it was between 4,500 dollars and 6,000 dollars a ton and six percent when above 6,000 dollars a ton.

The Zambia Chamber of Mines, which represents mining firms operating in the southern African nation, said the mining industry believes that the forward thinking policy shift by the government will bear fruits in the industry.

"The gesture by the government is a good lifeline that will provide much needed relief. The simplicity, stability, predictability, and ultimately the attractiveness of Zambia's minerals fiscal policy environment and taxation regime, is vital to providing the assurances these investments require, especially given that copper mining in Zambia is a high cost business," the organization said in an emailed statement.

But the mining firms believe that more needed to be done to ensure the country becomes competitive in the mining industry and to attract renewed investment.

According to the statement, if Zambia is to attract the much needed investment, its mining taxation levels must at the very least lie within global norms.

Finance Minister Alexander Chikwanda said last week that the move to make changes to the tax regime was necessitated mainly by the need to sustain operations of the mining sector in the face of falling metal prices. Endit