Zambia’s reserves


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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

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

classy-daddy-3.gifLumwana 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.

br-01-2.jpgZambia’s reserves were seriously depleted amounting to less than 1% of its foreign debt in 1998 but have since grown with an accumulation equivalent to about 28% of the same in 2006.

Overall, Sub-Saharan Africa as a whole increased it’s shock absorbers (international reserves) from $21 billion in 1996 to $108 billion last year representing a fivefold growth (see chart) but Zambia’s portion beat this fivefold variable by almost 28 times. This year international reserves for Sub-Saharan Africa are expected to near $131 billion.

Globally, reserves have tripled on average during the same period and, according to the IMF, even the developing world has failed to match Africa’s stockpiling. What we are seeing here is that the African continent is learning the secret of saving for a rainy day.

This is a powerful tool and the Japanese were the first to use it such that by increasing their own reserves they were able to boost their own economy.  By 2001, the Japanese held six of the world’s largest banks and the rest is history.

Increased reserves not only increase a countries purchasing power but they also allow the holding nation to increase its credit rating in the world.

Most factors that have helped the Zambian Enterprise are debt-cancellation related. But the biggest winner is the work the Zambia Revenue Authority (ZRA) has been doing in the last six years.

Zambia’s tax regime is highly competitive and some of the expiring tax holidays have also helped increase the tax base. Furthermore, the Bank of Zambia has been doing a fabulous job monitoring inflation, and reducing the money supply.

Such a combination of factors is attractive to the creation of dynamic economy and it is for the same reason that the world’s largest clearing house is looking at including the Zambian currency as an international medium of exchange once certain of their conditions are met … 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.           

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