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Friday, 21 August 2009

Achieving stable mining policies..

Nathan Chishimba, president of the Chamber of Mines of Zambia (CMZ), which represents interests of the mining firms, said companies wanted stable and long-term policies that would reduce risk to their investments. "(Mining companies) are not saying the policies should not be changed, but that there should be consistency so that any changes to the policies should not result in fundamental shift in the direction of the industry,"
Nathan Chishimba's comments are long overdue and fully in line with what we have been saying all along. What he does not say is "how" you get these stable mining policies. You get that by ensuring that you have a mining settlement that has the full buy-in of all Zambians. Otherwise, every government that comes along will constantly alter its mining policies. We need a Zambian solution, not an MMD or PF or UPND solution. [Thats how Botswana have managed to harness the diamond resources]. The mining companies need to realize its in their long term interests to push for transparency - deals made under the table are not sustainable. The approach should be consultative and transparent. The model for stability should follow the approach we have previously proposed in A human Approach to the "Mining Debate".

3 comments:

  1. Cho,

    The mining companies need to realize its in their long term interests to push for transparency - deals made under the table leading are not sustainable.

    Not sustainable, but very profitable. Look at the now well over $10 billion in profits they have paid no taxes over.

    We need a constitution which spells out the share of the Zambian government in all extractive industries. But we're not going to get that, until the Zambian people have better representation in parliament and the cabinet than the mining companies do.

    Get ready for all the threats that 'we can't raise taxes on the mines, or they'll leave'. Then consider the amount of windfall tax that was paid without blinking an eye, which the mine in question now threatens the government to sue and get back.

    (See:

    Zambia won’t reimburse mining firms

    ZAMBIA will not refund foreign mining companies millions of dollars they paid in taxes when windfall tax law was in force, but could revise existing taxes, the attorney-general said on Wednesday.

    Mr Mumba Malila said the development agreements, which gave the mine owners the right to compensation if the government failed to comply with agreed tax stability guarantees, were no longer binding, after Zambia amended its mining law in 2007. Canada’s First Quantum Minerals said this week it had paid about $140 million in higher taxes by the end of June this year, and wanted to seek a refund.Read more...)

    The problem isn't as much that there is a difference between the policies of the PF, UPND, MMD, etc. The problem is that the mining companies are able to bribe different individual ministers, to their treatment depends on who they bought off.

    ReplyDelete
  2. Mrk,

    On the same :

    A new piece :
    http://www.zambian-economist.com/2009/08/mined-out-in-zambia.html

    ReplyDelete
  3. MrK,

    "We need a constitution which spells out the share of the Zambian government in all extractive industries. But we're not going to get that, until the Zambian people have better representation in parliament and the cabinet than the mining companies do."

    Well said!

    ReplyDelete

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