Mine representatives, who seeem constantly to underestimate the seriousness of the political situation that confronts them in Zambia were faced yesterday with the threat from Patriotic Front General Secretary Guy Scott that if they take legal action against the mine tax reforms he will personally lead demonstrations against the companies, with the threat of closing down their operations. Scott and his party leader Michael Sata have excellent track records of organising the rising tide of popular protests and demonstrations Zambia has seen over the last few years, and both are very widely admired on the Copperbelt where their party dominates.
Scott made his threat in a Parliamentary Committe when Chamber of Mines council member Jeremy Allen claimed that the mining companies are doing a lot for Zambia and should therefore be given time to discuss the proposed tax regime with experts.
The Post reports that Scott also offered the mine owners a dose of reality - pointing out that the new taxes will inevitably pass through parliament without any amendments since all opposition parties support them. “The mines don’t have any representative in parliament and all the 150 MPs, the government and just ordinary citizens of Zambia are all for the idea that taxes should be increased,” Scott said.
Allen, who is also general manager for First Quantum Mineral Resources, appearing before a parliamentary extended committee on estimates yesterday that, “If government says it wants to take so much from the mining companies through high taxes, then we can also decide to stop developing the industry and this will not be a good thing to do because what we need is a win-win situation,” Allen said. “It’s not that we don’t want to pay taxes but what we are saying is that the tax should be well structured.”
That's a very amusing claim 'it's not that we don't want to pay taxes', and a ridiculously hollow threat. While the companies continue to make huge profits, as they will after the new taxes are imposed, they will continue developing the mines.
Earlier, Chamber of Mines general manager Frederick Bantubonse accepted that the Government was sovereign, and has the right to make its own laws. “We appreciate the need for the government to get more money from minerals. The Zambian government is entitled to formulating its own laws,” Bantubonse said. He continued to plead for negotiations.
Scott, however, rejected his request. “The government heard the voices of people who wanted a fair share of resources. It is now time for the mines to pay taxes like others have been doing,” Scott said. “This is the time for the government to make hay while the sun shines when there is still a boom in copper prices on the international market.”
After a heated debate, expanded committee chairperson Geoffrey Beene advised the mining companies to reorganize themselves and come up with actual proposals on what percentage increase they needed for the taxes. Beene said the mines should come up with proposals by tomorrow, giving parliamentarians only today to make consultations on the matter for presentation in parliament next week. A little further detail on the hearing is provided by the Times of Zambia, which points out that Beene's offer, for the committee to reconvene tomorrow is unusual and reflects the urgency of the discussion: the house does not usually sit at the weekend.
The Times editorial offers some mild-mannered thoughts on the situatio, while the editorial of The Post, entitled 'Give to Caesar what belongs to Caesar' launches an assault on the companies, taking an historical view of the mines as inheritors of Cecil Rhodes British South Africa Company and accusing them of acting with colonial arrogance. "They shouldn’t think it’s impossible to nationalise the mines again. It is being done all over Latin America today. The Russians are re-nationalising. It can be done here. If this government can’t do it, another willing government can be put in place to do it."
It endorses wage strikes by Zambian workers, and Scott's threat to demonstrate in support of the Government.
"We agree with Guy Scott that this is the time for the mines to pay taxes like others have been doing. And if they don’t, they are headed for a serious showdown with our people and they may risk getting their operations paralysed by protests. They may not be able to ship a single tonne of copper to the ports on roads and rail networks built with our taxes."... "Whatever we get from them will only come after a grueling fight, a relentless struggle. And it doesn’t matter whether it is the government seeking an increment in taxes or workers asking for increased wages – it has to be accompanied by a relentless struggle."
Jeremy Allen doesn't get off lightly. "Allen says “what we need is a win-win situation”. This is not true. They were reaping gigantic profits but not even one day did Allen and his friends see it fit to invoke this “win-win” idea and come up with a formula to share the windfall profits. If anything, they kept silent as if nothing good was going their way. And today Allen wants to tell us that he wants a win-win situation. This is an affront on our intelligence. This is not a country of 11 million fools."
"At least unlike these characters of today, Cecil Rhodes built a rail for the transportation of his minerals. These are just sucking the blood of the sufferer like vampires – from the poor Zambian businessman and worker taxes are collected to maintain roads and other infrastructure for the transportation of these exploiters’ minerals. Allen can’t see all this, he is blinded by profits." This point is well backed-up nby another story in the Post today, revealing that mine management at Kansanshi and Lumwana have refused to commit to using rail links proposed to ship copper from the 'new copperbelt', preferring to continue relying on road haulage, and thus the Governments' willingness to continually repair roads being damaged by constant movement of heavy copper cathodes and concentrates.
The editorial points out that mine taxes actually go to support the infrastructure and society on which the companies themselves are dependent. "Those who are not interested in that type of government should go to Congo – but even there it won’t be long because our brothers and sisters in that country are trying everything possible to bring sanity to the exploitation of their mineral resources and it won’t be long before they start doing what we are trying to do. It is clear that the day of reckoning for the mining companies in this country is at hand."
I have nothing to add except hear, hear. Well said Guy Scott. Well said The Post.
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