Zambia welcomes mining firms rescinding plans to cut investment

Source: Xinhua| 2019-02-02 21:02:58|Editor: xuxin
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LUSAKA, Feb. 2 (Xinhua) -- The Zambian government on Friday commended mining firms for rescinding their plans to cut capital investment and fire workers following the government's decision to introduce a new mining tax regime.

Mining firms have warned recently that they would cut about 500 million U.S. dollars in capital spending over the next three years in Zambia if the government went ahead and implemented a new tax regime, a move that would have resulted in the unemployment of 21,000 miners.

The new tax measures include increasing mineral royalty rates by 1.5 percentage points at all levels of the sliding scale, and introducing a fourth tier rate at 10 percent on the sliding mineral royalty regime, which would apply when the copper price rises beyond 7,500 dollars per ton.

There has been a standoff between the government and the mining firms against the backdrop of the new tax regime.

Minister of Mines and Minerals Development Richard Musukwa said discussions held between the government and the mining firms have been fruitful, and the mining firms are rescinding their earlier plans.

Musukwa said the government was happy with the decision made by the mining firms, adding that the introduction of the new tax regime was not meant to stifle mining operations but to grow the economy.

He told reporters during a press briefing at the State House that mining is a pivotal sector in the country's economy and that the government is committed to attracting more investment in the sector.

He said the country produced 860,000 tons of copper last year and that the government has been committed to fulfilling its target of 1 million tons of copper.

The government, he said, intends to use the forthcoming Mining Conference in South Africa which runs from Feb. 4 to 7 to attract more investment in the mining industry.