THE challenge facing the mining sector in Zambia is intractable but certainly not insurmountable because with continued dialogue between Government and the mines, solutions beneficial to both the mines and Zambians will be found, says Minister of Finance, Alexander Chikwanda.
He said this yesterday when he visited Konkola Copper Mines in Chingola.
Vedanta, the owners of Konkola Copper Mine is planning a 50-year mining investment in Zambia despite the major mining challenges including the falling copper prices as a result of the downtrend of the global economy and Government has described the plan as stupendous.
Mr Chikwanda said Government is elated that KCM, Zambia’s mining giant, was not leaving the country in the next 50 years because the mining investment would not only sustain jobs but would significantly contribute to the economic development of the country.
He said there was a gloomy atmosphere in the country in the last few months created by the uncertainties following fears that the mines were facing closures because of unfavourable mining conditions such as the new controversial mining tax regime which Government had maintained was the best way of curtailing tax fraudulence.
Mr Chikwanda said Government was encouraged that KCM was planning 50 years ahead and it was important that the mining company received all the support it needed to continue operating in Zambia.
He said when the KCM came to Zambia, the copper prices were oscillating around US$2000 per tonne but the prices had since been growing although suffering shocks during certain times.
The Finance minister noted that although it was not economically rosy for the mining sector because of the falling copper prices, KCM had continued to invest in the country and had not faltered on any of its several corporate social responsibilities such as health and education.
“It is not so rosy for the mines and in the last months it has not been easy. But there are some people with jaundiced minds who fantasise that the mining business is glamorous. The atmosphere in the last few months has been gloomy but we are stimulated that you have planned for a 50-year lifespan for this mine and this is stupendous. I know the VAT Rule 18 has been a thorny issue but the Zambia Revenue Authority is expressly working on it and soon it will be over,” Mr Chikwanda said.
He said Government would continue working closely with the mines to chart the way forward in resolving the challenges in the mining sector. The minister was impressed with the state-of-the-art Konkola copper smelter which is about the best in Africa with a capacity of more than 300 000 tonnes of copper cathodes per annum.
“We have the best copper smelter in Africa and for Government,this bridges the gap between reality and perception. And the extension of the lifespan for the mine is the best news and I know it requires thinking, planning and attention,” Mr Chikwanda said.
And KCM chief executive officer Steven Din assured that the Vedanta owned mine was in Zambia for the next 50 years and that the mining company would continue working with Government to enhance the mining sector and help alleviate poverty.