Cobalt & Uranium

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You know how it is most times when your predictions come true … others seem to wink an eye. We at the Zambian Chronicle warned about how the current financial crisis could affect the Zambian Enterprise when the times were great, the boom was on the rise and no one saw it (the crisis) coming.


In our weekly memo over a year ago we warned the Zambian government against this as we encouraged them to take stock of the commodities boom looking at it as a short-medium term opportunity while putting in place other measures for an upcoming burst.


It was on September 24, 2007 and we wrote Zambia’s Short To Medium Term Outlook – Extremely Encouraging, But … In that memo we went on to say the following …


“The challenge now is for countries like Zambia that are dependent on commodity exports to properly “manage” the commodity boom.

If we respect the truth, then we need to admit that commodity boom phases have not been managed well in the past, and we are at risk of making the same mistakes again. The main factors underpinning commodity prices were strong demand for platinum in devices that cut pollution in cars and rising demand in China and other emerging markets.

Still, commodity prices might drop, hurting growth in some African countries. To assume that current prices and the current boom phase reflects a permanent shift, rather than a temporary opportunity, would be a naive and risky approach to adopt.

If our analysis is correct, then the slump will come and it will bring with it a significant decline in commodity prices but prudent asset management now would help governments that are diversified enough to transition into manufacturing, construction and service sectors.”

While we can safely say that the Mwanawasa Administration really paid attention to most of the economic forecasts we put out there because our own info gathering and general feedback supports the notion, sometimes measures were not in place to fully implement them.


Our highly qualified team at the Zambian Chronicle takes time to look at all the data, crunch the numbers and analyze facts. By the sheer nature of the economic enterprise, booms and burst are a common place and it is not pessimistic but prudent to critically look at “what if scenarios”.


In another memo entitled National Development Corner: Barj Dubai – World’s Tallest Building Is Now In Dubai … we stated that the United Arab Emirates were in a hurry to develop and diversify because they understood the importance of turning current booms into diversification for future utility; we wrote the following below then …


“The United Arab Emirates (Dubai) is the fastest growing enterprise in the world per capita growth. Its own population is only one-eight compared to that of temporary immigrant workers from around the world working inside Dubai, for instance. It is no wonder some of the world’s Fortune 500 corporations are relocating their headquarters there.


The incentives are incomparable in many ways, from zero to marginal taxation to free trade zones, Dubai now houses the world’s tallest hotel, the world’s largest man-made port, the world’s largest shopping mall, the world’s largest man-made islands called “The World”, and the list is endless.


What is amazing though is that the Emirates are forward thinkers and planners such that their own Sheiks are at the center of the storm as they transform their nation into a premier world destination. Theirs will be an enterprise to reckon with nevertheless. One of the world’s most profitable airlines is called the Emirates.”


How does the above relate to individuals, corporations and governments alike? One might ask. Well for individuals, the scenarios are basic … you too will have good times in your life. There will be times when everything seems just right. That will be your personal financial and or micro-economic boom.


You income will right where you want it to be if not more. I have had those myself and even wondered whether I really deserved to be paid that kind of money for the same number of hours worked as Joe across me who earned far less. In most cases it was because I was more qualified than Joe while in others I was a better performer but the facts were I was having an individual economic boom.


Such are not times to squander your earnings but to build reserves for a rainy day, college fund for your kids and or retirement. You plan now, you rest tomorrow otherwise if you rest today you would be destitute tomorrow … if you fail to plan, you are planning to fail.


For corporations, those which don’t turn their reserves into marketable securities end up with cash crunches when the times are hard, end up winding operations and or filing for bankruptcy.  The process can have a devastating impact on the overall going concern.


Most times though, forward thinking enterprises pay dearly for forecasting tools and such things as cutting edge Management & Executive Information Systems they neither are nor usually caught unaware because Daily Statistical Reports (DSR) reveal and recommend mitigating resolutions.


For governments, those without foresight end up not finding ways to stimulate their economies and help citizens with unemployment benefits just as when  Luanshya Copper Mine halts operations … all 1,740 employees would be laid off and the Zambian government can do dimly squat.


An adverse economic reversal in Zambia would take more time for a turn around. What the government needs do is to come up with a Neo-Keynesianism approach right away as we suggested in the memo, “No Election Honeymoon For RB; The World Economy Is In Shambles, So Will Zambia’s …


The smart people of the Zambian Enterprise deserve better and the incoming government needs to take a critical look at mitigating circumstances – because Zambia is greater than any single one of us.


What we are experiencing is just the tip of the iceberg, the world economic crisis has approximately another twelve months to run its course but now time is of the essence.


Compliments of the Season, Live Long & Prosper; that’s this week’s memo from us at the Zambian Chronicle … thanks a trillion.


Brainwave R Mumba, Sr.

CEO  & President – Zambian Chronicle 


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By Shapi Shacinda

LUSAKA (Reuters) – Zambia has enough currency reserves to protect the economy in case the illness of President Levy Mwanawasa prompts some reduction in foreign investment, central bank Governor Caleb Fundanga said on Tuesday.

Fundanga said the only slight worry of the Bank of Zambia (BoZ) was rising oil and food prices, which threatened its single digit inflation target. However, he remained optimistic of achieving 7.0 percent annual inflation in December this year.

Fundanga said it was evident the illness of Mwanawasa, who is in a French hospital after suffering a second stroke, had caused anxiety among some investors but that there was “no need for panic”.

“The investors in the mines will continue exporting copper. It is possible that … some investors may decide to pull out, but we have enough reserves, $1.4 billion held by the Bank of Zambia and another $1 billion by commercial banks,” Fundanga told a news conference, adding Zambia had 5.6 months of import cover.

Mwanawasa impressed the International Monetary Fund and other Western donors by cracking down on government spending and launching an anti-corruption drive.

Fundanga said Zambia had investment pledges totalling $1.8 billion so far this year compared with just $1 billion in the first six months of 2007. The government has previously said a number of these investments have been fulfilled.

“Naturally, as a result of the illness of the captain, as some refer to the president, there are some people who might be feeling uncomfortable. Given this situation, are we vulnerable? Will all forex (foreign exchange) dry up? The answer is ‘no’,” Fundanga added.

He said mining and non-traditional sectors had continued to perform satisfactorily with copper export earnings for the three months to June just 0.1 percent lower than the previous quarter’s earnings, at $967.6 million.

Fundanga said non-traditional exports at $187.6 million at end-June were 12.3 percent above the $167.1 million recorded in the previous quarter ending in March.

“Favourable export earnings have led to the strengthening of the external sector reflected in the appreciation of the kwacha against major currencies and a 10 percent increase in international reserves to $1,338.4 billion in June 2008 from $1,216.3 billion in March 2008,” he said.

There were inflationary pressures from a 15 percent wage increase for civil servants from January and from higher global oil prices, which would put pressure on transport and commodity prices.

“However, these pressures may be mitigated by pass-through effects of the appreciation of the exchange rate of the (Zambian) kwacha against major currencies on account of external sector performance,” Fundanga said.

Fundanga said the kwacha appreciated 11.3 percent against the dollar in the three months to June to trade at an average of 3,259/dollar.

“We cannot give up on 7.0 percent inflation at the end of the year because we have enough food to feed ourselves and we will not necessarily be affected by global food prices,” he added.

(Lusaka newsroom + 260-977843609/260-955779523)


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By Shapi Shacinda

LUSAKA, July 14 (Reuters) – Zambia’s Konkola Copper Mines (KCM) will raise copper cathode output to 250,000 tonnes in 2008/09 from 150,000 tonnes last year and started commissioning a major smelter, a senior company official said on Monday. 

Sam Equamo, KCM’s communications advisor, said the southern African country’s largest copper producer had also completed some shafts at the Konkola Deep Mining Project (KDMP), which is touted to become the country’s largest copper producer. 

Output would peak at 500,000 tonnes by 2010, he added. 

KCM, which is majority-owned by London-listed Vedanta Resources Plc (VED.L: Quote, Profile, Research), operates the Nchanga open pit mine, Konkola copper mine, Nkana Smelter, Nampundwe pyrite mine and a satellite unit known as Fitwaola mine, which reopened in June after it was shut down last year. 

Equamo said construction works as the Nchanga Smelter was at an advanced stage, with some parts such as the Oxygen Plant and Acid Plant, already commissioned. 

The Nchanga smelter will have an annual processing capacity of 300,000 tonnes copper cathode. 

“It is expected that commissioning of the entire plant will start in a month or two with full operations starting later, depending on the smoothness of the commissioning stage,” said. 

The total amount to be spent on the smelter project is $372 million, he added. 

Equamo said the KDMP, where the company has previously said it would spend at least $1 billion on development, had made tremendous progress. 

“The sinking of number 4 Shaft is at around 450 metres while the headgear is at 60 metres of the ultimate height of 81 metres,” Equamo said. 

He said operations at Fitwaola Open Pit resumed last month and with the expected arrival of new equipment production should pick up. 

Equamo said KCM’s future looked bright due to major upgrades and expansion projects currently underway. 

“With the projects that we are undertaking, KCM is poised to produce around 500, 000 tonnes of copper per annum by 2010,” Equamo said. 

Copper mining is Zambia’s economic mainstay and the vast copper and cobalt mines are a major employer in this southern African country of 12 million people. 

Zambia’s other major copper producers are Mopani Copper Mines, a unit of Swiss firm Glencore International AG and Canada’s First Quantum minerals, Kansanshi mine, which is owned by First Quantum and Lumwana mine, a unit of Australia’s Equinox Minerals Ltd. (Reporting by Shapi Shacinda, Editing by Peter Blackburn)

Meanwhile … Konkola Copper shuts plant after protest continue reading below.

LUSAKA, July 14 (Reuters) – Zambia’s Konkola Copper Mines (KCM) said on Monday it had shut down a plant in its Nkana business unit as a precaution after a protest by some of its workers. 

KCM, which is majority-owned by London-listed Vedanta Resources Plc (VED.L: Quote, Profile, Research), did not say what impact the shutdown would have on production or when the plant, located about 350 km (219 miles) north of Lusaka, would be back in operation. 

“A small section of workers at the Nkana Business Unit of Konkola Copper Mines Plc. today staged an illegal assembly in connection with the just concluded negotiations for a new collective agreement between the two unions that represent mine workers and KCM management,” a KCM spokesman said in a statement. 

“The plant was shut down as a precaution.” 

Zambian state media said the workers were upset by reports that their representatives had agreed to a deal that fell short of their basic wage demands. 

There was no immediate comment from the leaders of the Mineworkers Union of Zambia (MUZ) and the National Union of Miners and Allied Workers (NUMAW), which represent workers at KCM. (Reporting By Shapi Shacinda; editing by Paul Simao and Peter Blackburn) (Lusaka newsroom + 260-977843609/260-955779523) 

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Posted on: Thursday, 3 April 2008

Zambia to resume receiving new applications for mining rights

LUSAKA, April 2 (Xinhua) — Zambia is to resume receiving new applications for mining rights from next month after 10- months suspension, The Post reported Wednesday.

Mines Minister Kalombo Mwansa was quoted as saying in a statement that all the technical work required to open the new cadastre system had been completed.

To this effect, the government had re-organized, codified and digitalized cadastral data and all the required logistics had been put in place in readiness for opening to the pubic, he said.

He said the system had been tested and had satisfied the government objective to have a more transparent, efficient administration and management of mining rights licensing process.

“The processing of license applications, renewals and transfers will now be done in a timely manner, further the system is designed to avoid overlaps of mining rights areas,” he said.

He said for the members of the public to familiarize themselves with the new cadastre system before receipt and processing of new applications for mining rights resume on May 2, 2008, the ministry had introduced open days for the general public.

He said open days would run from Aril 1 to 30, 2008.

The minister said efforts would be made for the mining cadastre regulations to be aligned with the new mines and minerals development act.

Zambia announced in June last year a halt effective from July 1, 2007 of new applications for mining rights in order to computerize its licensing system.

announcing the suspension, Mwansa said the suspension is part of Zambia’s efforts to weed out irregularities and simplify licensing procedures regarding the industry with massive inflows of foreign capitals.

(c) 2008 Xinhua News Agency – CEIS. Provided by ProQuest Information and Learning. All rights Reserved.

Source: Xinhua News Agency – CEIS

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Copper and uranium hopeful Kiwara – the second Aim-listed miner to take up a primary listing in Johannesburg this week – plans to complete a prefeasibility study and a feasibility study of targets in Zambia during the next two years, and could be producing in 2010, CE Peter Vivian-Neal said after the listing event.The company, chaired by Jubilee Platinum CEO Colin Bird, did not raise any capital through its Johannesburg debut, but would likely issue new equity within a year.

On Monday, Aim-listed gem producer DiamondCorp also made its debut on the JSE.

Kiwara was currently drilling at its 500-km2 prospect at the Kabompo Dome in North Western Zambia, where it planned to firm up a resource at the Kalumbila copper/nickel/cobalt deposit and the Kawanga uranium deposit.

Vivian-Neal said that Kiwara would complete a prefeasibility study on the prospect in 2009, and a feasibility study the following year.

He stated that the company might then decide to develop the mine itself, go into a joint venture (JV), or even sell it.

“There is the possibility we may follow the route of a favourable exit through JV agreements with major mining companies, or we may even dispose of the licence area through an outright sale,” said Vivian-Neal.

Kiwara currently had enough funding for its drilling programme, which it raised through its London listing in August last year, but would probably soon raise more.

It was “highly possible” that the company would come back to the market within a year, said Vivian-Neal.

There was also an issue about a lack of liquidity, with directors holding a significant portion of its shares.

“We would like to see increased liquidity,” he noted. “We are looking hard at the timing of the future fundraising.”

Vivian-Neal said that the timing of this was “completely results driven”.


Vivian-Neal said that the company was comfortable with its Zambian focus, after the country announced a new tax regime last month, in conjunction with a new mining code.

“It brings the country more in line with other mineral producing countries,” he said. “It doesn’t fundamentally change our determination to continue in the country.”

However, Vivian-Neal conceded that this had caused some concern for miners in the country.

“While we are focused on Zambia, we are looking at other targets in the country,” stated he. “We’ve looked at opportunities in Uganda and we will look at opportunities throughout Southern Africa.”

Source: Mining Weekly

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By Geoffrey Kapembwa

March 26 (Bloomberg) — Zambia‘s parliament approved an amendment to the Mines and Minerals Act that will increase taxes and abolish existing agreements between the government and mining companies, the Zambian Chamber of Mines said.

The bill, which will be signed into law by President Mwanawasa on April 1, will lift royalties on sales fivefold to 3 percent and increase corporate income tax to 30 percent from 25 percent. That will raise the effective tax rate on miners to 47 percent from 31 percent.

The government’s “unilateral decision to dishonor existing development agreements” is disappointing, Fred Bantubonse, general manager of the chamber, said in a telephone interview from the capital, Lusaka, late yesterday. “This is arm twisting.”

Zambia, Africa’s largest copper producer, expects to earn $450 million in additional revenue this year from higher mining taxes as it seeks to benefit from the metal’s seven-year rally, Kolombo Mwansa, the southern African country’s mines and mineral development minister said on March 4.

The law will result in miners reconsidering any expansion projects because of poor returns, Bantubonse said.

“Any bad law always affects future investment,” he said.

Copper accounts for about 70 percent of Zambia’s export income and production has been rising since the nation sold off state-owned mines 1999, almost three decades after they were nationalized. The proposed increase in taxes comes amid record profits earned by companies including Vedanta Resources Plc., India’s largest copper producer, and First Quantum Minerals Ltd., a Vancouver-based miner of copper in Africa.

— Editor: Athol Bolleurs, Dylan Griffiths.

To contact the reporter on this story: Geoffrey Kapembwa in Lusaka via the Johannesburg bureau at +27-

Last Updated: March 26, 2008 06:44 EDT

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ABOUT 500 workers at Chambishi Copper Smelter (CCS) have been issued with summary dismissal letters following their two-day riotous behaviour in protest against alleged poor conditions of service. And Police have apprehended seven CCS workers in relation to the riot that took place on Tuesday at the copper smelter company.Both CCS company secretary, Sun Chuanqi, and Copperbelt permanent secretary, Jennifer Musonda, confirmed the figure of the dismissed workers in separate interviews yesterday. Mr Chuanqi revealed that company property worth about US$200,000 was allegedly destroyed by the irate workers during the riot.He said management was saddened that the workers rioted before the conclusion of negotiations with union representatives.

Mr Chuanqi said the workers had been given a grace period of three days within which to exculpate themselves and show cause why disciplinary action should not be taken against them.

He complained that work had been adversely affected by the workers’ riotous behaviour.

Mr Chuanqi warned that all workers identified as ring leaders would be dismissed from employment to discourage others from behaving in a similar manner.

By press time yesterday more than 19 alleged ring leaders had been identified while more than 66 workers collected their summary dismissal letters.

Mr Chuanqi appealed to workers to exculpate themselves within the stipulated time so that the innocent ones could be reinstated.

“We’re appealing to the workers to respond quickly to the summary dismissal letters so that those that did not take part in the riotous behaviour could be reinstated because work has been grossly affected and we need local manpower,” he said.

Mr Chuanqi said CCS belonged to Zambians and wondered why the workers destroyed what belonged to them simply because of a dispute that could have been resolved amicably.

“What we are building here also belongs to Zambians, so people must desist from destroying this investment. For those who will not come to collect their letters, we will follow them until they get them so that they can exculpate themselves,” he said.

However, Mr Chuanqi paid tribute to government for its continued support to Chinese investment in Zambia.

He also said the Chinese worker only identified as a Mr Li who was injured during the riot on Tuesday was discharged from the hospital.

And Mrs Musonda also confirmed that workers were served with summary dismissal letters when they reported for work yesterday.

A check by the Zambia Daily Mail crew yesterday at the CCS premises found several riot police officers manning the company.

Some Zambian workers were found waiting to collect their summary dismissal letters while others were reluctant to collect them, claiming that they did not take part in the riot.

Those spoken to said they were ignorant about the whole thing and that they were just forced by some of their colleagues to riot.

Copperbelt Police commanding officer, Antonneil Mutentwa, revealed that six officials of the National Union of Miners and Allied Workers (NUMAW) and their member were apprehended by police in connection with the riot.

Mr Mutentwa said the union officials and their member were apprehended around 17: 45 hours on Tuesday.
NUMAW national secretary Albert Mando condemned the action by the workers to riot and damage company property.

“We are not in support of what the workers did. We are also disappointed with what happened on Tuesday because the negotiations have not yet collapsed, so why strike or riot?” Mr Mando said.

Zambia Daily Mail


Times of Zambia reports…

Chambishi fires 500

 ALL the 500 striking workers at Chambishi Copper Smelter (CCS) were yesterday fired while seven National Union of Miners and Allied Workers (NUMAW) branch officials were arrested and detained on Tuesday evening.

The workers were served with letters of summary dismissal by management in the morning.

The move by management was as a result of the riotous behaviour by the workers at the company premises on Tuesday morning.

Police said those arrested were detained at Kitwe Central Police Station to help with investigations.

The workers at the Chinese-owned company had been on strike since Monday, demanding improved conditions of service.

The situation worsened on Tuesday when the workers decided to become violent and damaged property worth millions of Kwacha.

Both CCS company secretary, Sun Chuanqi and NUMAW national secretary, Albert Mando, confirmed that all the 500 workers who took part in the work stoppage had been served with letters of summary dismissal and had been given three days in which to exculpate themselves.

But Mr Mando said it was unfortunate that management had decided to serve the workers with letters of summary dismissal, saying there was no reason to continue with negotiations when its members had been served with letters of dismissal.

He, however, said his union would work hard to ensure that the seven branch union officials, who had been arrested, were released so that negotiations could continue.

“Yes, I have been told that the management at the company has also served the workers with letters of summary dismissal, but it is unfortunate management has resolved to take this stance.

“This decision by management will affect our negotiations because how do we negotiate when our members have been given letters of summary dismissal,” Mr Mando said.

And speaking in an interview at CCS, Mr Chuanqi said the management at the company had decided to serve its workers with letters of summary dismissal as a way of disciplining them for their riotous behaviour, but that they were free to exculpate themselves.

He said management was eager to listen to the concerns of the workers, but was saddened that the workers quickly resolved to become riotous and damaged property at the company.

He said the Chinese investment in Zambia was there to benefit both Zambians and Chinese and there was no reason for Zambian workers to become violent and damage property.

“As management, we do not take pleasure in dismissing our employees, but we want them to know that violence does not pay and that they have to do things according to the law. Problems arise where there are people, but things must be done correctly,” Mr Chuanqi said.

And Mr Mando confirmed the detention of the seven union branch officials and that he was trying to secure their release.

Mr Mando, who was still at the Kitwe Central Police Station by Press time, said those arrested were branch chairman, Oswell Chibale Malume, vice-branch chairman, Christopher Yumba, branch secretary, Steven Kabwe, branch vice-secretary, Christopher Nkandu, treasurer, Kafwaya Ndombwani, vice-treasurer, Chanda Mhango and a shop steward, Kachinga Silungwe.

Mr Mando said the seven were picked up on Tuesday evening and had not been formally charged although they were still being interrogated.

“Yes I can confirm that seven of NUMAW branch officials at Chambishi Copper Smelter have been arrested and detained at Kitwe central police station. They were picked up around 18:00 hours on Tuesday.

“I am actually at the police station, but I have not talked to them because they are still being interrogated and have not been formally charged. As a union, we are trying to secure their release,” Mr Mando said.

The Times team which went to CCS found the place deserted with only armed police dotted all over to keep vigil.

End of report.

Wed 5 Mar 2008, 15:50 GMT

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By Shapi Shacinda

LUSAKA (Reuters) – Chinese management of Zambia’s Chambishi smelter was in the process on Wednesday of firing more than 500 employees following riots at the plant, a union official said on Wednesday.

The riots on Tuesday highlighted tensions between Zambian workers and Chinese managers in the mining industry — the country’s economic lifeblood — while Beijing pushes ahead with a relentless investment drive in Africa.

Albert Mando, general secretary of the National Union of Mining and Allied Workers (Numaw), said workers were sent home and dismissal letters were being prepared. He said seven union officials were arrested, which was confirmed by police.

“We have been taken by surprise because the union has been told all the workers, over 500 of them, are in the process of receiving dismissal letters. The workers have been given three days in which to appeal against the dismissals,” Mando told Reuters by telephone.

There was no immediate comment from Chambishi’s management.

The riots over pay at the smelter on Tuesday injured a Chinese manager and damaged property, officials said.


Zambia’s vast copper mines are a major employer in the southern African country and its leaders are under pressure to show Chinese investment will benefit its 12 million people.

Zambian President Levy Mwanawasa has vowed to fight political opponents who try to limit or frustrate Chinese investments in the mineral-rich southern African nation.

The growing presence of Chinese firms in Zambia has prompted an anti-Chinese backlash in some parts of the country, with the main opposition party accusing Mwanawasa of allowing the Asian newcomers to exploit workers.

China has focused its African ventures on mining companies as well as oil to feed its exploding economy. But is is diversifying into areas such as banking.

The country’s investment drive in Africa has drawn fire from Western nations and aid groups, who accuse Beijing of turning a blind eye to misrule, corruption and human rights abuses.

China argues it is spreading prosperity in the world’s poorest continent where the West has failed.

The police chief for the restive mineral-rich Copperbelt province, Antonnell Mutentwa, said the seven union officials had been apprehended to help police with investigations.

“We will decide the next course of action after interviewing them and conducting investigations,” Mutentwa told Reuters by telephone.

Chambishi Smelter, which will cost more than $200 million to construct, is part of China’s planned $900 million investment in the mining town of Chambishi, which the government has turned into a tax-free economic zone to attract Chinese investment.

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By Shapi Shacinda

LUSAKA, March 3 (Reuters) – Foreign owners of Zambian copper mines have proposed a 12.5 percent windfall profit tax, rejecting the government’s proposed 25 percent rate, a senior industry official said on Monday.

“I am not able to say whether we will make headway or not,” Frederick Bantubonse, head of the Chamber of Mines of Zambia (CMZ), told Reuters after the group offered counter-proposals on the mining taxes.

Evans Chibiliti, Secretary to the Treasury, was quoted by state media on Monday as saying the government would press ahead with new taxes despite the new suggestions from mining firms.

In January, the government proposed a windfall profit tax at a minimum of 25 percent and an increase in mineral royalty to 3.0 percent from 0.6 percent.

It also plans, from April 1, to introduce a variable profit tax at 15 percent on taxable income above 8 percent and to raise corporate tax to 30 percent from 25 percent.

Foreign firms could be prohibited from mining copper if they did not the taxes

The CMZ has also proposed a variable profit tax be raised to taxable income above 16 percent from the government-suggested minimum of eight percent.

“If (the government) desires to impose variable profit tax in preference to windfall tax … it should be considered as 16 percent in place of the proposed 8 percent in the (law),” the CMZ said in a proposal submitted to parliament.

CMZ said that instead of introducing a flat rate of 3 percent mineral royalty, the government should introduce the tax at 1 percent, graduating to 3 percent with price increases. The corporate tax rate should remain at current 25 percent.

The group said the money raised through higher taxes should be used to help generate more power, following the costly energy outages suffered in January, and waning capacity.

Mining companies say the government plans would result in excessive taxes and also argue that they were not consulted on the proposals.

(Reporting by Shapi Shacinda; editing by Chris Johnson)

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LUSAKA, Jan 22 (Reuters) – Zambian authorities said on Tuesday they had lifted a ban on a new project to construct a key leach plant for copper processing which was suspended a fortnight ago after it failed to meet environmental standards.

The Environmental Council of Zambia (ECZ) blocked a leach plant project at Mopani Copper Mines (MCM) a fortnight ago, after a spillage of pregnant liquor solution (PLS), which officials say contaminated drinking water pumped to residents.

The ECZ said in a statement that Mopani had elevated underground walls in the settler tanks and had also taken several other measures to avoid spillage.

The spillage contaminated drinking water and caused diarrhoea and dizziness among some residents of Mufulira town, 450 km (281 miles) north of Lusaka.

“The ECZ is now satisfied that the measures that have been put in place are adequate to prevent the recurrence of the events that led to the suspension of the Stage II Insitu Leach Operations,” the statement said.

Mopani chief services officer Passmore Hamukoma told Reuters that the project was near completion.

“The ECZ has therefore lifted the suspension on the operations of Stage II Insitu Leach with immediate effect,” the statement added.

Government officials in the mineral-rich Copper Belt province said Mopani had been negligent and had caused the water contamination.

Mopani, a joint venture of Swiss firm Glencore International AG [GLEN.UL] and Canada’s First Quantum Minerals (FM.TO: Quote, Profile, Research), is one of several copper and cobalt mines carrying out infrastructure expansions and upgrades to boost copper production, which is Zambia’s economic lifeblood.

Copper mining is Zambia’s economic mainstay and the vast copper mines are a major employer in this southern African country of 12 million people. (Reporting by Shapi Shacinda, Editing by Peter Blackburn)

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