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Saturday, 28 February 2015

Lungu on Mining, Taxation and Politics

A very good interview by President Edgar Lungu that showcases as a thoughtful, strategic and calm leader. He clearly recognises the difficult balancing act that is required if he is to stand any chance of re-election. 

1 comment:

  1. First, 'Bye-bye' is not what we will say to the investors. We will do it to one or two and then the rest will up stakes and head to Mongolia or Peru where people will say 'Come, Come'. The other problem is that we will be stuck with less reputable and essentially less trustworthy mining companies because the serious ones will not touch Zambia anymore and if they did the markets would pummel them the way ENRC was after they bought FQM's mines in Congo. Zambia would make itself a pariah. So 'Bye-bye' is rather ill conceived and too cavalier when we are talking about the fate of the nation for the next decade.

    Second, manganese as a byproduct of copper mining. That is a new one. Its also physically impossible. Gold only comes out of one mine alongside copper (Kansanshi). And second of all, those metals are all taxed too, they are not exempt from the new royalties. The new royalty rates cover everything EXCEPT industrial minerals which includes aggregate, sand etc, not metals. One needs to get facts straight because it is by using accurate facts that one makes cogent and convincing arguments. By saying that manganese comes of out the same mines as copper does our President is either pandering to the public's ill informed opinions (dangerous and a testament to failed education) or is in the grip of the same fallacies (even more dangerous). By saying that the mines are not taxed on the byproducts is a falsehood.

    Those are just two things that leaped out at me. There were other little things too but the first I brought up is the worrying one. The pugnacious attitude towards business and cavalier borrowing practices will ruin the economy for a decade or more. 1980s re-run anyone?


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