Zambia Mining Industry: Mines Minister reappointed to end tax row

Minister of Mines, Energy and Water Development Christopher Yaluma
Minister of Mines, Energy and Water Development Christopher Yaluma

Zambia’s new President Edgar Lungu on Thursday reappointed Christopher Yaluma as mines minister in Africa’s second-largest copper producer, to help end a row with mining companies over new royalties and tax refunds. The simmering disputes, coming at a time when copper is near 5-1/2 year lows and economic growth in the southern African nation is faltering, have threatened investment and could result in shaft closures and jobs losses.

Lungu, elected president in January after the death in office of ex-presidentMichael Sata last October, last week directed the government to speedily end the two-fold disputes and his appointment of Yaluma could help diffuse the rows.

“Agreement over the new royalties and VAT refunds are obviously a priority. We also need to ensure that mines remain in production even with lowercopper prices,” Yaluma told Reuters after his appointment.

One of the disputes involves $600-million in value-added tax (VAT) refunds which the industry says is being withheld by the government. The second centres on a hike in January on royalty rates to 20% from 6% for open pitoperations and those for underground mines to 8% from 6%.

Following complaints from the Chamber of Mines of Zambia that the higher royalties could force shaft closures and loss of about 12 000 jobs, Yaluma opened talks with mining firms last year but the talks were put on hold because of the election.(Source: Miningweekly)

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