RTR2KSOS.jpg (Photo : Reuters)
Chinese Ambassador to Zambia Yang Youming announced Friday that Chinese firms in Zambia will continue their operations despite the country changing its mining tax plan, China.org.cn reported.
The Zambian parliament recently inked its national budget for 2015, which detailed the new mining tax plan, among other things. Acting President Guy Scott enacted the plan into law.
Some mining firms threatened to quit operations due to the increase in mineral royalty taxes. For underground mines, the rate went from 6 percent to 8 percent; for open pit mines, it went to 20 percent.
In an interview with the Zambia National Broadcasting Corporation, Yang said that halting operations was not the best solution to solve the problem; a discussion between the Zambian government and the mining firms might be necessary instead.
Yang also said that Chinese firms have started talks with the Zambian government regarding the new tax plan. He said that he hopes for finding a solution agreeable to all parties concerned.
He added that the Chinese mining firms will closely work with Zambian communities and help in the country's development due to strong ties.
Meanwhile, Scott said last week that the government has initiated dialogues with the mining firms and stated that the government will not be intimidated by the mining companies that are threatening to close their operations following the introduction of the new mining tax plan.
Canadian-based mining giant, Barrick Gold Corporation, announced that they plan to suspend their operations in Zambia following the government's decision to approve the budget which contains the controversial new tax plan.
To prevent financial losses, Lumwana Copper Mine, a Toronto-headquartered mining giant that operates in northwestern Zambia, said that the new tax plan forced them to begin halting their mining operations.
According to the Zambian government, the new Mines and Minerals Act of 2014 is a win-win situation for both parties. The government insisted that they are not pressured despite a debate with Africa's second largest copper producer and mining firms threatening to suspend their operations.
The Zambia Chambers of Mines, an organization representing major foreign mining firms, said that the implementation of the new tax plan will reduce productivity which might lead to mine closures.
This industry body forecast that copper production in the southern African nation will lose in excess of 158,000 tons next year and is expected to lay off over 12,000 workers.
