Zambia sees $400 mln revenue from new mining tax

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By Shapi Shacinda

LUSAKA, Jan 11 (Reuters) –

Zambia will introduce a windfall mining tax this year in a move it expects to generate $400 million in revenue, President Levy Mwanawasa said on Friday.

He told parliament the new tax regime would effectively increase mining taxes to 47 percent from 31.7 percent.

Mwanawasa’s government has been pressured by unions over the past few years to spread the benefits of its copper wealth, the mainstay of its economy, to its citizens and workers in the industry who complained of poor wages.

Mwanawasa said the hike in taxes sought to address those concerns. “The new regime introduces a windfall tax and a variable profit tax that has been designed to work in periods of both high and low prices and for both high and low cost mining projects,” Mwanawasa told parliament, adding that the new system will start in the first three months of this year.

He blamed tax five to 20 years incentives awarded in recent years to firms for creating an imbalance in mineral wealth between the state and private sector.

Mwanawasa said Zambia in 2007 only collected $142 million in mineral royalty and company tax from earnings of $4.7 billion in copper and cobalt exports by foreign owners of its vast copper and cobalt mines, despite a 400 percent increase in global metals prices in the past seven years.

He added that foreign mining firms were expected to earn up $4 billion this year if metals prices kept at current levels. “Clearly, Zambia’s fiscal mining regime is extremely generous and provides the lowest revenues to the government. This to a large extent has been a source of public outcry,” Mwanawasa said.

Mwanawasa said additional resources from the new tax measures would enable mineral-rich Zambia to spend more on education and health and help achieve its aim to be a prosperous middle-income country by 2030.

Mwanawasa also said Zambia would introduce uniform tax measures for all foreign miners. “In view of this, there will no longer be any need for special agreements with investors in the mining sector and eventually all the sectors,” he added.

Mwanawasa said a new regulatory regime would be introduced to safeguard foreign investments in mining. “It will have a modern licensing system based on transparent procedures (and it) will provide for transparency in the accounting and utilization of mineral revenues,” Mwanawasa said.

Zambia has been in negotiations with mining companies since October last year about proposed increases in mineral royalties, corporate taxes and customs duties on imported equipment, as a way of boosting revenue from the sector. The copper mines are a major employer in this southern African country of 12 million people.

Source: Guardian Unlimited

(Reporting By Shapi Shacinda, Editing by Peter Blackburn)

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Zambia Hails India For Economic Support …

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LUSAKA: Zambia has acknowledged that India’s assistance to Zambia has gone a long way in supplementing its development agenda.Finance and National Planning Deputy Minister Jonas Shakufuswa commended India for its continued technical and economic assistance.

The close historic interaction between the two countries has paved way for the establishment of diplomatic relations since Zambia’s independence in 1964, Shakufuswa said during the Indian Technical and Economic Cooperation day (ITEC) in Lusaka last evening.

He noted that Indian investment is further contributing to Government’s economic recovery programme. Shakafuswa expressed hope that Zambian and Indian companies will continue to exploit the abundant resources in the country to explore new areas of cooperation.

The minister observed that cooperation between the two countries is a testimony of the commitment of both the governments towards promotion of south to south cooperation.

Speaking on the occasion, Indian High Commissioner to Zambia, River Wallang said ITEC is a vehicle which India utilises to channel its aid to Africa and other developing countries.

Wallang explained that the ITEC programme is based on India’s own experience in development. He disclosed that his country will this year alone provide about 4000 scholarships under ITEC in the civilian sector from which Zambia will have 60 places.

Wallang added that Indian government is currently working with the ministry of science and technology to set up two public computer learning kiosks to enhance computer learning skills among Zambians.

Source: Economic Times

 

Zambia to defer customs duties for foreign miners

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HOPING TO BOOST FOREIGN INVESTMENT

 

Zambia is to defer payments on a 30% customs duty for mining equipment for one year to allow foreign mining companies time to get operations running smoothly.

LUSAKA (Reuters)  – 

Zambia will defer payments on customs duties in a bid to boost foreign investment in its mining industry, finance minister Ng’andu Magande told Reuters in a weekend interview.

Magande said Zambia’s Treasury will defer payments on a 30 percent customs duty on imported mining equipment for up to one year to give companies a chance to get operations going smoothly and gain profits from copper and cobalt projects.

“I can’t tax somebody who is not making profits,” he said.

The Treasury has said it would raise mineral royalties to 3.0 percent from 0.6 percent and corporate tax to 35 percent from the current 30 percent for mining companies following a rise in global metals prices.

Magande said negotiations on royalties, which were scheduled to start in September because Zambia was hiring foreign consultants on the talks.

“We should be able to start this process by the end of September or October. Everybody thinks that perhaps within three months we should be through with the negotiations,” he said.

Copper mining earns the bulk of Zambia’s foreign exchange but analysts say the country does not reap enough benefits becaue the mines are owned by foreigners.

He noted there was no fresh investment from new foreign companies but that existing projects were expected to raise output.

“Most of the big companies that have already had (investment) plans are saying to us that the highest curve of investments is this year and then next year we will see production coming up,” said Magande.

Foreign firms operating in Zambia include London-based Vedanta Resources Plc , Canada’s First Quantum Minerals , Swiss firm Glencore International AG and Australia’s Equinox Minerals Ltd.

Most of Zambia’s big copper mines are majority-owned by foreign firms, with the government holding no more than a 14 percent stake in any one venture.

Zambia forecasts finished copper output to hit 670,000 tonnes in 2007 from 515,000 tonnes the previous year.  

http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=25358&sn=Detail

 

Due To Popular Demand – Hidden Secrets Of Lumwana

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Due to popular demand we are reposting The Hidden Secrets Of Lumwana post …

Lumwana comes with a lot of serious hidden secrets … despite having been discovered over 70 years ago, it was not fully developed. But why?? Because at the time of discovery, it was learnt that its ore’s copper content was lower than the best grade available in other regions such as those on the Copperbelt.

Initial metallurgical studies were mainly focused just on copper and no other mineral contents were premeditated. The Ministry of Mines carried other tests with the help of students from the School of Mines at UNZA in the late 80’s and new discoveries were found … it was this group that issued new metallurgical maps for Zambia showing new mineral reserves around the nation.

The study showed that Lumwana is a multi-element deposit with significant gold, cobalt and uranium grades distributed throughout the deposit but the government was too broke to pursue the project due to the ongoing Structural Adjustment Program (SAP) imposed by the World Bank and International Monetary Fund at the time.

So, what we have at Lumwana is a total hidden package with just as much copper, as much gold, as much cobalt, and as much uranium – this has been the serious hidden secret of the hidden treasures that lie under the soils of Lumwana making it the world’s largest undeveloped deposits with a 321Mt ore reserve grading at 0.73% Cu and 0.093% U308.

This means that once commissioning is completed in mid-2008, Lumwana will be well on its way to becoming the largest copper, gold, cobalt and uranium producing mine in Africa. As we unearth for copper, we would have the benefit of doing the same for gold, cobalt and uranium.

This excavation process provides for maximum utility as the economies of scales are exploited to the fullest extent because we would dig for the price of one but sell for the price of four. As we yank out one stone from the ground, we produce four products from it … it can’t get any better than that!!!

If my memory serves me right, Equinox holds mineral rights for copper and uranium but they should be allowed to extend those to gold and cobalt that way the ore’s extraction may yield the largest benefit. These secretly hidden treasures at Lumwana have the capacity to attrack over a billion dollars ($1 billion) in Foreign Direct Investment (FDI) for the Zambian Enterprise … thanks a trillion.

Brainwave R Mumba, Sr.

CEO & President – Zambian Chronicle

Copyrights © 2007 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom.

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2007 Microplus Holdings Int., Inc.

 

Lumwana In Sight – Slowly Taking Shape

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It already has 2,500 employees in its construction phase. The Lumwana Project already houses the largest crane in Africa – the diesel powered Hitachi EX5500 excavator with at least 27 EH4500 diesel AC drive trucks to haul the needful. 

A 72 Km power line is taking shape with a substation carrying 330/33Kv capacity is expected to be fully functional this fall. Main housing units approximately 178 (houses) are ready for occupancy and water and sewerage systems are fully functional. 

Peter Tomsett with 25 years experience in the mining industry including his last 20 at Placer as CEO and President has been appointed as the Non-executive Chairman.

Lumwana is backed by secured $584 million contingent letters of credit from 12 international banks on four continents has a dual listing in Canada & Australia respectively. Lumwana has already paid as much as $3 million in direct taxes to the Zambian government.

With just as much copper, just as much cobalt, just as much gold and just as much uranium in one shove, Lumwana is the best thing to ever happen to the Zambian Enterprise since sliced bread by Supaloaf; to those old enough to reckon … thanks a trillion

Brainwave R Mumba, Sr. 

CEO & President – Zambian Chronicle 

Copyrights © 2007 Zambian Chronicle.  All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom.

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc. 

Copyrights © 2007 Microplus Holdings Int., Inc. 

 

Zambian Uranium – Higher Grade Than Initially Thought

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An independent feasibility study conducted by Equinox this year reveals that Zambian uranium at Lumwana is actually of a higher grade that was initially conceived. This is according to a new press report issued in Canada on Tuesday.  

Mr. Craig Williams, CEO & President of Equinox, disclosed that the drilling program currently underway appears to be defining discrete and coherent mineralized zones with significant uranium grades at Malundwe.  

Lumwana’s uranium resources have previously been estimated at 9,5-million tons grading 0,093% U3O8 indicated, and 2,6-million tons of 0,042% U3O8 inferred, using a 0,01% uranium cut-off grade but now have to be revised upwards once the study which started in April is completed …  

The press release is just another confirmation of what the Zambian Chronicle published last week in our article Hidden Secrets of Lumwana – World’s Largest Undeveloped Deposits (Copper, Gold, Cobalt & Uranium) The Lumwana Project is a mammoth $715 million undertaking. 

In another related report, shares of Equinox for the Lumwana Project were the most traded at the Toronto Stock Exchange for business day dated July 24, 2007. Momentum is building as investors all around the world are currently looking at having a piece of the pie.  

Meanwhile, Mr. Williams further disclosed that five of the world largest mining corporations have been making attempts for hostile take over of Equinox. Knowing how powerful these corporations are, Equinox may not resist their attempts forever but as of right now, his team is focused on making Lumwana a reality … thanks a trillion.

Brainwave R Mumba, Sr.

CEO & President – Zambian Chronicle

Copyrights © 2007 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom.

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2007 Microplus Holdings Int., Inc. 

 

Hidden Secrets Of Lumwana – World’s Largest Undeveloped Deposits (Copper, Gold, Cobalt & Uranium)

Lumwana comes with a lot of serious hidden secrets … despite having been discovered over 70 years ago, it was not fully developed. But why?? Because at the time of discovery, it was learnt that its ore’s copper content was lower than the best grade available in other regions such as those on the Copperbelt. 

Initial metallurgical studies were mainly focused just on copper and no other mineral contents were premeditated. The Ministry of Mines carried other tests with the help of students from the School of Mines at UNZA in the late 80’s and new discoveries were found … it was this group that issued new metallurgical maps for Zambia showing new mineral reserves around the nation.                                                                                                  

The study showed that Lumwana is a multi-element deposit with significant gold, cobalt and uranium grades distributed throughout the deposit but the government was too broke to pursue the project due to the ongoing Structural Adjustment Program (SAP) imposed by the World Bank and International Monetary Fund at the time. 

So, what we have at Lumwana is a total hidden package with just as much copper, as much gold, as much cobalt, and as much uranium – this has been the serious hidden secret of the hidden treasures that lie under the soils of Lumwana making it the world’s largest undeveloped deposits with a 321Mt ore reserve grading at 0.73% Cu and 0.093% U308.  

This means that once commissioning is completed in mid-2008, Lumwana will be well on its way to becoming the largest copper, gold, cobalt and uranium producing mine in Africa. As we unearth for copper, we would have the benefit of doing the same for gold, cobalt and uranium. 

This excavation process provides for maximum utility as the economies of scales are exploited to the fullest extent because we would dig for the price of one but sell for the price of four. As we yank out one stone from the ground, we produce four products from it … it can’t get any better than that!!!

If my memory serves me right, Equinox holds mineral rights for copper and uranium but they should be allowed to extend those to gold and cobalt that way the ore’s extraction may yield the largest benefit. These secretly hidden treasures at Lumwana have the capacity to attrack over a billion dollars ($1 billion) in Foreign Direct Investment (FDI) for the Zambian Enterprise … thanks a trillion.

Brainwave R Mumba, Sr.

CEO & President – Zambian Chronicle

Copyrights © 2007 Zambian Chronicle. All rights reserved. Zambian Chronicle content may not be stored except for personal, non-commercial use. Republication and redissemination of Zambian Chronicle content is expressly prohibited without the prior written consent of Zambian Chronicle. Zambian Chronicle shall not be liable for any errors, omissions, interruptions or delays in connection with the Zambian Chronicle content or from any damages arising therefrom.

Zambian Chronicle is a wholly owned subsidiary of Microplus Holdings International, Inc.

Copyrights © 2007 Microplus Holdings Int., Inc.