Mining companies not opposed to the principle of windfall tax – Mutati

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Mine workers at NFC Africa Mining shaft at Chimbishi
Mine workers at NFC Africa Mining shaft at Chimbishi

CHAMBER of Mines of Zambia (CMZ) president Emmanuel Mutati says mining companies are not opposed to the principle of windfall tax but are uncomfortable with its application.

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And CMZ chief executive officer Maureen Dlamini says abundant natural resources should not be a curse to Zambia but an opportunity for economic development.
Speaking during a media and civil society workshop organised by CMZ in Kitwe yesterday, Mr Mutati said mines did not object when the then President Levy Mwanawasa’s administration introduced windfall tax.
The workshop was held to disseminate the findings of the International Council on Mining and Metals (ICCM) report on Zambia.
Mr Mutati said, however, that the mines are uncomfortable with windfall tax because Government was taxing mineral revenue without taking into account the cost of production.
“But when this tax was introduced, Government taxed the revenue without taking into account the cost. At that time the copper prices were good but ironically, the mining companies started making losses and that is what the mining companies are uncomfortable with,” Mr Mutati said.
He said windfall tax is applicable in many countries but what is taxed is net revenue.
Mr Mutati also said mines do not reject the principle of windfall tax but rather its application.
And Ms Dlamini said the mining sector is keen to establish rapport with various stakeholders in its quest to contribute to the country’s economic development.
She said the mining sector does not leave out beneficiaries or those that are part of the process.
She called for constructive dialogue and engagements among all stakeholders based on facts.
And Tranter Resources executive director Sixtus Mulenga said Zambians should embrace mining investors because they are great risk-takers.
Dr Mulenga, who made a presentation on stages in mining development from exploration to mine closure, said mining is an expensive undertaking.

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Zambia Daily Mail

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