Mining firms in Zambia, particularly copper producers, are prepared to commence expansion projects next year that are valued at $2 billion after they manage to reach an agreement on royalties with a new administrative under newly elected president Hakainde Hichilema.
As stated by the Zambia Chamber of Mines, major companies such as First Quantum Minerals and EMR Capital are ready to raise funding for the projects while other producers have to spend millions of dollars of capital they had held back since 2019 due to the tax changes that dissuaded investment.
Despite the nation’s copper production reaching higher to a record last year, over the past decade output has been greatly stagnant due to the hostile relationship between the industry and the outgoing president Edgar Lungus’s government whose policies acted as disincentives to mining firms.
The Chamber of Mines president Godwin Beene, said that the president elect has reset the tone to one of rebuilding confidence and spurring growth, and that the industry is heading towards a bright future as there will be more of a partnership with the government than ever before.
According to Mr Beene, the mining firms’ main request to the government is that they be granted a go ahead card allowing them to deduct mineral royalties from the tax they pay on profits.
He further highlighted that the mining firms are also requesting for the introduction of sliding-scale taxes that are levied on a pay as you earn basis.
Mr Hichilema, who is due to deliver his inauguration speech on the 24th of August, has pledged to implement stable and predictable policies, and is also expected to make more detailed economic announcements.
In 2010, the country produced nearly twice as much copper as the Democratic Republic of Congo did, and by last year Zambia’s output was about half of that of the DRC’s.
These new reforms and changes will definitely excel Zambia’s mining industry to a greater level as the disincentives that were present during the former president Lungu’s rule will no longer hinder the sectors ability to expand, produce more and attract or keep investors.