Glencore (owners of Mopani Copper Mines) last week halted operations at its Sable Zinc Kabwe mine because of withheld valued-added tax refunds owed to the company. Mopani has also suspended part of an $800 million plan to boost production of copper by 50 percent.
The Zambia Revenue Authority has held back on paying mostly mining companies more than $600 million VAT refunds, because it says exporters haven’t complied with a rule requiring import documents from the countries the products end up in. Mopani alone is owed more than $200 million in refunds.
We must not forget that GRZ through ZCCM-IH owns 10% shares in Mopani Copper Mines. Though we should also remember that MCM has never declared any dividends to ZCCM-IH. There was talk a year ago of GRZ completely exiting ownership of mining companies and instead raising the taxation levels. But that was rolled back.
Incidentally for all the talk of Chikwanda having shares in mining companies people forget that GRZ's mining taxation policies have always been complicated by the shares it owns in some of these mining companies. It partly struggles to set an optimal mining tax across the piece because it is always thinking about its shares.
There other reasons of course but it does point to the need for a Green Paper on mining policies which can allow people to input into the policy development. Then a White Paper can then be published. Only then are we going to have a Zambian policy that rather than a policy of the party of the day.
Economist | Researcher