Zambia says won’t re-introduce mine windfall tax

377

Zambia, Africa’s top copper producer, will not re-introduce a mine windfall tax it abolished in 2009 as such a measure could harm mining operations and negatively impact the economy, said finance minister Alexander Chikwanda.

“It would be unwise for the government to introduce a windfall tax when metal prices are unstable and are usually trending downwards,” Chikwanda said in a statement.

Zambia doubled royalties on copper miners in the 2012 budget and the World Bank said that would not cripple the industry at the current strong prices but could cause problems if the commodity cycle reverses, Reuters reports.

Zambia in 2008 raised company income tax from 25 percent to 30 percent, raised the mineral royalty to 3 percent from 0.6 percent, introduced a 25 percent windfall tax and separated hedging income from mining income for tax purposes.

But following protests from mining companies, the government in 2009 abolished the windfall tax.



Foreign mining firms in Zambia include Brazil’s Vale , Canada’s First Quantum Minerals, Barrick Gold, London-listed Vedanta Resources and commodity giant Glencore.