Will companies resist mining taxes?

Yesterday's Post newspaper included a report with comments from eminent University of Zambia (UNZA) Development Studies lecturer Fred Mutesa suggesting that the government and Zambian people should expect some resistance from mining companies over the new tax regime.

Commenting on finance minister Magande's remarks that there would be no room for negotiation with the mining companies, Dr Mutesa noted, “The minister is very correct in taking the position that he has announced because the final authority in matters of legislation, including the tax policy, is parliament... And in this country, it is high time that parliament played a more significant role in scrutinising the development policies. However, some resistance could be expected from the mining companies, but the mines should examine their consciences, if they have any.”

And Reuters report today some murmurings of disquiet from the companies. First Quantum Minerals Ltd have apparently said the news taxes are "unattractive" and could deter new entrants or further investment. "The new tax proposal in Zambia is exercising our minds. It doesn't look very attractive right now," Clive Newall, president of First Quantum, told a mining conference in Cape Town. "Certainly it won't be attractive for new players, and may stop new developments, which is an unintended consequence." He said First Quantum would study the tax structure before commenting further on the tax regime.