RST Quantum Minerals has called for further fiscal reform in Zambia following the southern Africa country’s national budget on Friday – the first of newly elected president Hakainde Hichilema.
“This budget puts Zambia back on the global stage as a respected and competitive player in the mining sector,” said Godwin Beene, head of First Quantum’s Zambia government relations in a statement.
Beene called for further reform of the sliding scale of mineral royalties, VAT refund discipline and assurances of stability. This would lead to increased investment “… more jobs and more taxes through increased production,” he said.
Hichilema was voted into power in August defeating Edgar Lungu whose two terms as president oversaw fiscal changes such as the removal of the deductibility from corporate tax of the royalties. First Quantum said this amounted to a double taxation that had “stymied” the company’s expansion plans.
Beene added that in order to benefit from the forecast increase in copper demand Zambia should oversee the expansion of existing mines and the development of new ones rather than depend solely on “higher prices”.
Zambia has targeted an increase in copper production of about three million tons a year in ten years from current production of about 800,000 tons.
“The mining sector remains critical to the Zambian economy as it is the main contributor to foreign exchange earnings,” said Beene. “This role is destined to grow in importance due to the rising demand for copper boosted by its vital role in a number of rapidly growing industrial sectors such as manufacturing of electric vehicles. The buzzword is that copper will be as lucrative as oil was in the mid-1970s,” he said.
First Quantum, listed on the Toronto Stock Exchange, operates the Kansanshi and Sentinel mines in Zambia which comprise more than half of its 780,000 ton a year copper output.