Companies involved in exploration said Zambia’s proposed mining tax increases will hit mineral exploration and production in the country, which happens to be Africa’s second biggest copper producer.
While delivering the 2019 budget speech, Zambia’s finance minister, Margaret Mwanakatwe revealed the country plans to introduce new mining duties, replace Value Added Tax with sales tax and increase royalties to bring down mounting debt.
A statement released by The Association of Zambian Mineral Exploration Companies (AZMEC), said the strategies proposed in the budget will impede on the growth of the country’s mining sector. AZMEC President, Geoffrey Mulenga said mineral exploration is a high cost and high risk activity. He added that no viable copper discoveries have been made in Zambia over the past decade.
Mulenga acknowledged that “dramatically increased exploration activities are now required, more than ever, if Zambia is to remain a leading copper producing nation”. He noted that without mineral discoveries, Zambia’s mining industry would continue to stagnate and ultimately contract, hitting tax collection, employment and export revenue.
Represented by Zambia’s Chamber of Mines, mining firms have opposed the proposed tax. The chamber revealed that some mining firms had scrapped expansion plans because of the higher mining taxes.