A business media hungry for scandal where I suspect there is none are reporting that Metorex, owners of the privatised Chibuluma South mine, are again threatening legal action over new mine taxes.
The article that appeared in South Africa's Business Day quotes Metorex operations director Edward Legg who told analysts on a visit to the mine last week that the company did not want to take legal action, but he said it reserved its right to do so, although it was continuing talks on the issue with the government through the Zambian Chamber of Mines.
What I suspect this means is that the companies have shareholders to appease and want to fight on in the propaganda war over mine taxes. The degree of desperation in the story is evident in the need to quote First Quantum's opposition to the taxes in front of a Parliamentary committee, in February, before the legislation passed, as if it shows the companies are forming a broad front.
This issue is over, it's a non-issue. Still, the Government perhaps don't help themselves by appearing to continue to need the companies' support to impose the law of the land. The Post quote Bank of Zambia (BoZ) governor Dr Caleb Fundanga as saying, "we are happy that KCM has accepted the regime, we urge all the other mines to accept the tax regime for us to develop our schools, hospitals and roads." I am unclear what all this stuff about 'accepting' the tax regime is. I don't have to 'accept' the VAT rate I pay on a chocolate bar but the man behind the till still collects it on behalf of the state, because it is the law.
PS - The unlikely suggestion, in the same Post story, from Bank of Zambia (BoZ) governor Dr Caleb Fundanga that $4bn was raised from mine taxes in 2007 is ridiculed by, Mr K and Cho in their excellent blogs.
1 comment:
the mining company have reason to be against the regime of taxes that is private for most of the benefits of mine ...
on the basis of an annual production of 700 000 tonnes of copper in 2008 and an average copper prices of $ 8,600 (analysts give 10 000 for 2009) the total windfall taxes on 2008 will be an annual rate of 1, 04 billion dollar! more that GRZ's annuncement (450 M$)!
you have add the taxes !!
corporate taxes and the royalties 3% ( for 700 000 tonnes = 180 M $ !!)
the total will be 1,3/1,4 billion dollars !
has noted that over $ 7700 ton
on each $ 100 GRZ receive in first $ 75 and take 47% tax on the remaining sum
in fact from $ 100 received by the mine will remain only $ 12.5 for the society !!!
for hihgt price the taxes is 88 % !! yes 88% not 47 %
if the $ plunges face the kwacha earnings will be reduced
the mining companies will hope that the price of copper down the windfall taxe
the zambia has again make the mistakes of the past
zambia goes to great difficulties
vedanta has agreed taxes because it has huge interests to defend,
vedanta is afraid, thats all...
GRZ has to behave traitor with investors, because no negociation, no discussion, unilateral only
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