Zambia Halts Export Tax On Unprocessed Minerals For One Year
22 October 2013
Posted by: Author: Matthew Hill
Author: Matthew Hill (Bloomberg)
Zambia, Africa’s biggest copper
producer, has suspended a 10 percent export tax on ores and
concentrates for almost a year, according to a copy of the
Government halted the levy until September with effect from
Oct. 4, when the statutory instrument signed by Finance Minister
Alexander Chikwanda is dated. The suspension, which applies to
minerals including copper, nickel, zinc, lead, silver and
uranium, comes after mining companies asked government to waive
the tax because of a lack of local smelting capacity.
Zambia imposed the charge in November 2011 as the country
sought to boost local industry. The tax made exporting copper
concentrates less profitable, encouraging mines to use local
smelters. Companies including First Quantum Minerals Ltd. (FM),
Barrick Gold Corp. (ABX) and African Rainbow Minerals Ltd. (ARI) have
operations in the country.
"African Rainbow Minerals approached the Zambian
government asking for the 10 percent export tax to be waived and
we are appreciative of the government granting it to us,”
Jongisa Klaas, a spokeswoman for the Johannesburg-based company
said in reply to e-mailed questions yesterday.
First Quantum Minerals also asked the government to end the
levy, saying earlier this year it had a copper concentrate
stockpile worth over $100 million it couldn’t process locally as
smelters were full. The company also said the export charge
threatened the Enterprise nickel mine it plans to build in the
northwest of the country.
Neighboring Democratic Republic of Congo in July raised
taxes on copper and cobalt concentrate exports by two-thirds as
it plans to ban the practice next year. Much of the concentrates
are processed by Zambian smelters.
This article first appeared in bloomberg.com.