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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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Posted: April 01, 2008 by David Pett

Equinox Minerals Inc. shares were down 10% on heavy volumes Tuesday as Zambia gets set for to raise mining taxes this month.

Zambia began enforcing its new tax code today that will see mining firms pay more in royalties and other taxes despite objections that the government has reneged on tax exemption deals with foreign investors.

All foreign firms in the copper-rich southern African nation are required this month to start paying the higher taxes, including Canadian-owned companies Equinox and First Quantum Minerals. 

Equinox’s copper production is exempt but its future uranium production would be subject to the tax.  

The mineral royalty has increased from 0.6% to 3%. and corporate taxes increased from 25% to 30%. The African country also introduced a 15% variable profit tax on taxable income above 8% and a minimum 25% windfall profit tax.

Equinox shares were down 50¢ to $4.38 at 10:30 a.m. ET, and First Quantum shares were down 3% or $2.57 to $80.67. 

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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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PARLIAMENT on Wednesday heard that the proposed new Mines and Minerals Development Act will promote transparency in the management of mining rights in the country.

Mines and Minerals Development Minister Kalombo Mwansa told the House that the Bill had also provided for the establishment of the mining rights registry which would contain third party interests to facilitate obtaining consent for an investor to enter such areas for mineral exploration.

Dr Mwansa said when the Bill came up for second reading that the proposed law had several provisions to benefit Zambian citizens and citizen owned companies in line with the Citizens Economic Empowerment Act 2006.

He said Zambians would remain free to enter into mine development partnerships with foreign investors but said only up to 49 per cent equity participation by non-Zambians would be allowed and that it would also reserve the mining rights for industrial minerals for Zambians.

He said Zambian citizens seeking consent to undertake prospecting and mining activities within an area already under a large scale mining right would now have the opportunity to seek intervention of the minister.

He said the provisions were designed to increase Zambian participation in the ownership of mines in the country and increase benefits to the Zambian society generally.

He said once the Bill was enacted, it would provide the legal basis for the statutory instrument and also development of a mineral royalty sharing mechanism.

He said the provision was designed to meet the expectation of local communities to benefit from the mineral royalty accruing to Government from their areas.

Other new elements in the Bill include the removal of provision for the minister to enter into development agreements and other elements included the requirement for a mine developer to come up with programmes for local business development, employment and training of Zambians.

The Bill also stated that the existing development agreements would cease to be binding on the republic upon coming into effect of the new Mines and Minerals Development Act.

Dr Mwansa further disclosed that the relinquishment, the renewal of a prospecting licence would now not be negotiable, as this would encourage prospecting companies to speed up identification of a highly promising area, which could be retained for mine development.

And chairperson of the committee on economic Affairs and Labour Mines Given Lubinda said the submission by the mining companies against the tax regime were invalid as they did not take into account the legitimate demand for the citizens to benefit from the resources that God endowed upon them.

Mr Lubinda who is Kabwata PF Member of Parliament (MP) said to avoid the country being brought under similar circumstances in the future, the committee implored the House to fully support the withdrawal of the discretionary power of any minister to enter into such development agreements.

The committee further supported the proposal to reserve certain mining activities for Zambians and also empowering the local companies.

Contributing to the debate Namwala MP, Robbie Chizyuka (UPND) said Zambia was a rich country with minerals given by God but called for fair share of the resources for the benefit of the people.

Luena MP Charles Milupi (independent) said that 750,000 tonnes of copper representing 99.9 per cent go out of the country as raw materials thereby creating jobs for other countries at the expense of the Zambian people.

Newly elected Kanyama MP Jerry Chanda (PF) said he had been tasked with responsibility of contributing to the welfare of the community who were currently facing various challenges such as floods, road infrastructure and several other pressing matters.

Colonel Chanda told the House that the planned increment of user fees by the Road Transport and Safety Agency (RSTA) should not be accepted because of the failure to manage the funds.

And Speaker of National Assembly Amusaa Mwanamwambwa advised Colonel Chanda to avoid debating controversial matters and the use of un-parliamentary language to avoid being interrupted.

This was after Col Chanda said that for too long the people of Kanyama and the nation as a whole had tightened their belts but had not been assisted.

He had wondered what wrong the people had done not to be assisted by what he termed “uncaring New deal Government” which received interjections especially from the Government side.

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images.jpgBy Shapi Shacinda

LUSAKA (Reuters) – Thirty foreign and local companies have tendered for shares in Zambia’s major coal supplier to its copper mines, a senior industry official said on Wednesday.

Joseph Chikolwa, chief executive officer of ZCCM Investments Holdings, which wholly owns the Maamba Collieries Ltd mine, said tenders would close on March 28.

“We do not have a fixed percentage to give to the successful bidder but we have decided to leave it open for negotiation with the successful bidder depending on the value they are going to add to Maamba Collieries,” Chikolwa told Reuters.

“In terms of the response, we have had over thirty interested parties expressing interest to submit proposals so we can say the response has been very good.”

He declined to name the companies.

ZCCM Investment Holdings (ZCCM-IH) plans to inject $12 million into operations of the Maamba Collieries Ltd. as it seeks permanent equity partners.

Maamba produced about 600,000 tonnes of coal per year in the 1980s, but years of undercapitalisation have led to a fall in production.

Maamba mine has seen production slump in recent years due to undercapitalization and operational losses.

The companies also hope to invest in construction of a 300-350 megawatt station to power the facility, said Chikolwa.

Power demand in the southern African country has been boosted by several new mines and industrial plants.

Maamba Collieries has 78 million known coal reserves to last over 70 years while the coal mine has capacity to produce up to one million tones of coal per year, officials say.

“The coal at Maamba can be used to help solve the power deficit the country and the (southern Africa) region is currently facing,” said Chikolwa.

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Tue 18 Mar 2008, 13:11 GMT
lpm.jpgLUSAKA (Reuters) – Zambia will construct a new coal-fired power station and scrap import duty for power-saving electric appliances in a bid to alleviate power shortages at copper mines, President Levy Mwanawasa said.
Mwanawasa said in remarks on state television late on Monday that he had instructed his finance minister to scrap and suspend some taxes on imported electrical appliances that use less power.

Zambia charges a maximum of 25 percent import duty and 16 percent value added tax (VAT) on various imported items.

“The government is looking at encouraging coal based electricity generation using the Maamba Coal Mine…but it will take many years for these efforts to produce increased capacity,” Mwanawasa said.

Officials say Maamba Collieries has coal reserves of around 78 million tonnes which can last for over 70 years.

Mwanawasa said Zambia will introduce cost-saving measures to encourage domestic users to trim consumption to enable state power utility Zesco provide adequate electricity to the copper mines, the country’s economic lifeblood.

Mwanawasa said power demand has been boosted by several new mines and industrial plants, among them the Lumwana copper mine, which is due to start producing 165,000 tonnes of copper per year in 2009 and a new nickel mine in southern Zambia.

Zesco data shows that it generates up to 1,000 MW of power compared to total national demand of 1,600 MW during peak hours from 6 a.m. to 6 p.m. Demand is expected to rise to 2,500 MW in the next five years.

Mwanawasa said Zesco had switched off ageing power generators for renovation in a bid to have increased capacity by March 2009.

“While this will help, I am afraid to say the overall supply-demand balance will remain tight because new sources of demand for energy have emerged and will continue to emerge,” he said.

Zesco has said it requires $2 billion in new power investments to meet national demand.

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