VENTURES AFRICA – In an effort to bring to a close a fight between mining companies and government over new royalties and tax refunds, Zambia’s new president, Edgar Lungu, has re-appointed Christopher Yaluma as mines minister, it emerged on Thursday.
The bubbling fights in Africa’s second biggest producer of copper – which came at a time when economic growth in the country is faltering – have the ability of jeopardising prospective investments into the country. Lungu, who was elected president in January this year, replaced ex-president Michael Sata.
The former died in office last October after a short illness. Last week, Lungu called on his government to promptly put to an end to the fights. His choice of Yaluma has been seen as an attempt to ensure peace reigns. “Agreement over the new royalties and VAT refunds are obviously a priority.
We also need to ensure that mines remain in production even with lower copper prices,” Yaluma told Reuters on Thursday. According to Reuters, one of the fights includes $600 million in Value Added Tax (VAT) refunds which the industry believes is being withheld by the government.
The second is around the surge in January this year, on royalty rates to 20 percent from 6 percent for open pit operations. After Zambia’s Chamber of Mines had warned that the higher royalties could lead to shaft closures and loss of about 12.000 jobs, Yaluma started discussions with mining companies last year. However, these discussions were halted because of the presidential elections.
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